Boston City Councilor and mayoral candidate Rob Consalvo on Wednesday sent a letter to Liberty Mutual chief executive David Long, decrying the insurer’s plans to cut retirement benefits for employees after having received tax breaks from the city.
Consalvo said he was writing Long with “a profound sense of disappointment,’’ following a Globe story Tuesday detailing Liberty Mutual’s plans to reduce pension and 401(k) retirement contributions, and to cut back health benefits for future retirees.
The reductions were announced just a year after the insurance company was publicly criticized for paying its former chief executive, Edmund F. “Ted’’ Kelly, $200 million over four years, and then funding a $4.5 million corner office renovation for Long.
“When Liberty Mutual came to the City Council in 2010 asking for tax assistance to build a new $300 million office in the Back Bay, I supported your request because I believed your company had every intention of being a good neighbor,’’ Consalvo wrote in the letter, a copy of which was obtained by the Globe. “But this isn’t how we should treat people in Boston.’’
Consalvo urged Long to reverse the cutbacks planned for 2014 or risk being turned down for future requests for assistance from the city.
“I hope you will reconsider this action and reinstate the benefits your employees deserve,’’ said Consalvo, who represents Hyde Park, Readville, Roslindale and Mattapan. “If not, I cannot in good conscience support any requests from Liberty Mutual for assistance from the City of Boston in the future.’’
Liberty Mutual spokesman John Cusolito said Long had not yet received the letter but would respond to Consalvo when he gets it.
The Globe reported that Liberty Mutual plans to reduce its 401(k) contribution for more than 38,000 workers to a maximum of 6 percent from 7 percent. In keeping with the current plan structure, only half of the sum, or 3 percent, is guaranteed to match employees’ own contributions; the other half is granted based on company performance.
In addition, the insurer is changing its traditional pension plan to a so-called “cash balance’’ plan, which will require smaller contributions by the company and reduce Liberty’s long-term liability. Finally, the company said it would stop offering life insurance for retirees over age 70 and reduce the amount it contributes toward retiree health and dental benefits.
The company said it was making the changes because it determined that its offerings were richer than those of its competitors. Many companies have frozen or eliminated traditional pension plans in recent years, and have done away with retiree health coverage too. The 401(k) reduction, however, comes amid rising profits at the company.
Liberty Mutual received $46.5 million in state and local tax incentives in 2010 to build its new $300 million Back Bay office tower, which opened in July.
Consalvo’s letter signaled that, if elected mayor, he would take a hard line on holding companies accountable after they seek public tax breaks.
“The business community is a part of our city and will have a seat at the table when decisions are made in my administration,’’ he wrote. “Being a part of our communities, though, carries with it the responsibility of being good neighbors and the obligation to sometimes look past personal gain to do what is in the common good.’’