Mayo Clinic announces changes to employee retirement benefits - KTTC Rochester, Austin, Mason City News, Weather and Sports

Mayo Clinic announces changes to employee retirement benefits

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ROCHESTER, Minn. (KTTC-DT) -- Friday morning, Mayo Clinic employees received an email explaining some important news affecting the future of their financial benefits.

Mayo says that in recognition of employee contributions, the clinic will be increasing salaries next year.

However, looking ahead the company is facing some long-term challenges and needs to make changes that are designed to help sustain and protect future retirement benefits.

The following is a list of changes from Mayo:

Effective Jan. 1, 2015

  • The formula used to calculate pension benefits will change, moving from a final-average pay to a career-pay formula.
  • Pension benefits accrued before Jan. 1, 2015, under the current formula, will be protected. The new pension calculation will apply to benefits accrued after this date.
  • Enhance the 403(b)/401(k) plan by adding a much-requested Mayo match to employees' contributions, which will increase at intervals to recognize long service to Mayo
    • 0-19 years of benefit service: 50 percent Mayo match on every dollar an employee contributes, up to a maximum of 4 percent of pay
    • 20-29 years of benefit service: 75 percent Mayo match on every dollar an employee contributes, up to a maximum of 4 percent of pay
    • 30 years or more of benefit service: 100 percent Mayo match on every dollar an employee contributes, up to a maximum of 4 percent of pay
  • Implement the changes in 2015 to minimize the impact on those who currently are nearing retirement and to provide everyone time to learn about the new Mayo 403(b)/401(k) match 


Effective Jan. 1, 2011

  • Continue offering retiree medical benefits, but implement changes to share more of the increasing cost of the benefit with retirees. (Note: Employees hired after Jan. 1, 2002, pay the full premium.) The changes include:
    • Discontinue medical expense reimbursement-type plans  for medical and allied health staff retiring after Dec. 31, 2010
    • Phase in, over a few years, higher premium rates for all retirees
    • Discontinue the "age 62 and 30 years service" premium rate (currently pay the same rate as active employees; will move to the retiree premium rate schedule)
    • Provide a one-time opportunity to elect retiree medical coverage at retirement. Retirees who decline coverage at retirement will not be able to enroll at a future date.

Mayo Clinic says employees can learn more about the above changes on Mayo employee intranet.

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