The Massachusetts attorney generals office has launched a formal inquiry into a $16.4 million pension payout that Blue Cross and Blue Shield of Massachusetts made to former Chief Executive Officer and Chairman William Van Faasen.
Van Faasen, who had been with the company for 17 years and was 58 when he retired as CEO, received the payout when he stepped down in January 2006. He stayed on as chairman of the not-for-profit healthcare insurer until December 2007, however, and received nearly $3 million in salary and bonus for his work during that year. The Massachusetts attorney generals office declined to comment on the inquiry, but according to news reports, some state lawmakers have characterized the payout as excessive and inappropriate for a not-for-profit company.
Chris Murphy, a spokesman for the healthcare insurer, said he couldnt give specifics on how the board calculated Van Faasens retirement payout, but said in general company retirees receive an annual pension of between 60% and 80% of their averaged highest salaries. Murphy said executives are required to take a lump-sum payout based on the estimated number of years they are expected to live. Since (Van Faasen) retired at 58, which is fairly young, he got a larger benefit than if he retired at 65, Murphy said. He also said Blue Cross is cooperating with the attorney generals office, and would provide any information requested. -- by Shawn Rhea
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