Vanguard decided not to abruptly pull the plug on its popular medical benefit for retirees and employees. It will instead modify and phase it out gradually, writes Erin Arvedlund for The Philadelphia Inquirer.

Current retirees — and those whose golden parachutes will unfurl by 4Q2022 — will retain their retiree medical accounts. They will still receive annual funding of $1,000 in retirement, as well as an additional $500 for a spouse.

Employees who started working at Vanguard before 2020 and will be at least 40 years old in 2022 will retain whatever benefit they have earned when the company freezes the plan.

Those who were hired after the start of 2020 are ineligible for the benefit.

The retiree medical benefit provided active employees with a credit of $5,500 for each year of employment.

“This is a huge improvement on taking away the RMAs (retiree medical accounts),” said Ann Kavanaugh, a financial planner with iValue Financial Planning and retired Vanguard financial adviser. “At least the people who were already accumulating money in this unfunded account will have some benefit.”

Read more about Vanguard in The Philadelphia Inquirer.