Employee Retention of Dow Chemical Company - The Dow Chemical Company (NYSE: DOW) is a multinational corporation headquartered in Midland, Michigan, United States. As of 2007, it is the second largest chemical manufacturer in the world by revenue (after BASF)[2] and as of February 2009, the third-largest chemical company in the world by market capitalization (after BASF and DuPont).
Dow Chemical is a provider of plastics, chemicals, and agricultural products with presence in more than 175 countries and employing 46,000 people worldwide. Its stated mission under the current CEO, Andrew N. Liveris, is: "To passionately innovate what is essential to human progress by providing sustainable solutions to our customers" with the vision: "To be the most profitable and respected science-driven chemical company in the world".[3] Annual R&D spending exceeds $1 billion.
The company was founded in 1897 by Canadian-born chemist Herbert Henry Dow, who had invented a new method of extracting the bromine that was trapped underground in brine at Midland, Michigan.[4] While at first the company sold only bleach and potassium bromide, Dow today has seven major operating segments, with a wide variety of products offered by each.[5] The company's 2005 sales totaled $46.3 billion, with a net income of $4.5 billion. Dow has been called the "Chemical companies' Chemical company"[6] in that most sales are to other manufacturers rather than to end users. Dow has sold directly to customers, primarily in the Human and Animal Health and Consumer Products markets.
This is the Summary Plan Description (SPD”) for the COLI Incentive Benefit Plan for Salaried Employees and the COLI
Incentive Benefit Plan for Midland Hourly Employees (hereafter collectively referred to as the “Plans” or the “Program”, and
each singly referred to as “Plan”). Both COLI Incentive Benefit Plans are part of the COLI Incentive Benefit Program. The
Plans provide a death benefit at no cost to Employees who signed and submitted a COLI Consent Form in 1991 or 1992 on
whom The Dow Chemical Company (Company) purchased a corporate-owned life insurance1 (“COLI”) policy on their lives.
In addition, the Plan provides a death benefit for Employees for whom the Company purchased a COLI policy on their lives
in 1983, 1985 or 1988. The amount of the benefit upon the death of an active Salaried Employee, Salaried Retiree, or a
person who was being paid a benefit under Dow’s Long Term Disability Income Protection Plan (LTD) at time of death is
$5000. The amount of the benefit upon the death of a Salaried Employee who left Dow and/or a Participating Subsidiary prior
to Retirement is $2,500. The amount of the benefit upon the death of an active Midland Hourly Employee, Midland Hourly
Retiree, or a Midland Hourly Employee who was being paid a benefit from Dow’s Michigan Division Contract Disability
Program at time of death is $4,000. The amount of the benefit upon the death of a Midland Hourly Employee who left Dow
and/or its Participating Subsidiaries prior to Retirement is $2000. For purposes of the COLI Incentive Benefit Plans, an
employee does not “leave Dow and/or its Participating Subsidiaries” when the employee leaves Dow or a Participating
Subsidiary to immediately work for an entity that is partially owned, directly or indirectly, by The Dow Chemical Company.
FRAUD AGAINST THE PLAN
Any Plan Participant who intentionally misrepresents information to the Plan or knowingly misinforms, deceives or
misleads the Plan, or knowingly withholds relevant information, may have his/her coverage cancelled retroactively to the date
deemed appropriate by the Plan Administrator. Further, such Plan Participant may be required to reimburse the Plan for
Claims paid by the Plan. The employer may determine that termination of employment is appropriate and The Plan may
choose to pursue civil and/or criminal action. The Plan Administrator may determine that the Participant is no longer eligible
for coverage under the Plan because of his or her actions.
GRIEVANCE PROCEDURE
If you want to appeal the denial of a claim for benefits, see the section of this SPD entitled “Appealing a Denial of Claim”.
If you feel that anyone is discriminating against you for exercising your rights under this benefit program, or if you feel that
someone has interfered with the attainment of any right to which you feel you are entitled under this benefit program, or if you
feel that the Plan Administrator has denied you any right you feel that you have under this benefit program, you must notify
the Plan Administrator (listed in the “ERISA Information” section of this SPD) in writing within 60 days of the date of the
alleged wrongdoing. The Plan Administrator will investigate the allegation and respond to you in writing within 90 days. If
the Plan Administrator determines that your allegation has merit, the Plan Administrator will either correct the wrong (if it
was the Program which did the wrong), or will make a recommendation to the Plan Sponsor or Participating Employer if any
of them have been alleged to be responsible for the wrongdoing. If the Plan Administrator determines that your allegation is
without merit, you may appeal the Plan Administrator’s decision. You must submit written notice of your appeal to the Plan
Administrator within 60 days of receipt of the Plan Administrator’s decision. Your appeal will be reviewed and you will
receive a written response within 60 days, unless special circumstances require an extension of time. (The Plan Administrator
will give you written notice and reason for the extension.) In no event should the decision take longer than 120 days after
receipt of your appeal. If you are not satisfied with the Plan Administrator’s response to your appeal, you may file suit in
court. If you file a lawsuit, you must do so within 120 days from the date of the Plan Administrator’s written response
to your appeal. Failure to file a lawsuit within the 120 day period will result in your waiver of your right to file a
lawsuit.
ERISA RIGHTS
When you are a Participant in the COLI Incentive Benefit Program, you are entitled to certain rights and protections under
the Employee Retirement Income Security Act of 1974 (ERISA). This law requires that all Program Participants must be able
to:
• Examine, without charge, at the Plan Administrator's office and at other specified locations, the Plan Document and annual
report filed with the U.S. Department of Labor.
• Obtain copies of the Plan Document upon written request to the Plan Administrator. The Administrator may charge a
reasonable fee for the copies.
• Receive a summary of the Program's annual financial report. The Plan Administrator is required by law to furnish each
Program Participant with a copy of this summary report.
In addition to creating rights for you and all other Program Participants, ERISA imposes duties on the people who are
responsible for operating an employee benefit plan. The people who operate the COLI Incentive Benefit Program, called
"fiduciaries" of the Program, have a duty to act prudently and in the interest of you and other Program Participants and
beneficiaries.
No one, including your employer or any other person, may discharge you or otherwise discriminate against you in any way
to prevent you from obtaining a Program benefit, or from exercising your rights under ERISA. If your claim for a Program
benefit is denied, in whole or in part, you must receive a written explanation of the reason for the denial. If you feel that
anyone is discriminating against you for exercising your rights under this benefit program, or if you feel that someone has
interfered with the attainment of any right to which you feel you are entitled under this benefit program, you must notify the
Plan Administrator (listed in the “ERISA Information” section of this SPD) in writing within 120 days of the date of thealleged wrongdoing. The Plan Administrator will investigate the allegation and respond to you in writing within 120 days. If
the Plan Administrator determines that your allegation has merit, the Plan Administrator will either correct the wrong (if it
was the Program which did the wrong), or will make a recommendation to the Plan Sponsor or Participating Employer if any
of them have been alleged to be responsible for the wrongdoing. If the Plan Administrator determines that your allegation is
without merit, you may appeal the Plan Administrator’s decision. You must submit written notice of your appeal to the Plan
Administrator within 60 days of receipt of the Plan Administrator’s decision. Your appeal will be reviewed and you will
receive a written response within 60 days. If you are not satisfied with the Plan Administrator’s response to your appeal, you
may file suit in court. If you file a lawsuit, you must do so within 120 days from the date of the Plan Administrator’s
written response to your appeal. Failure to file a lawsuit within the 120-day period will result in your waiver of your
right to file a lawsuit.
If you have any questions about the Program, you should contact the Plan Administrator. If you have any questions about
this statement or about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and
Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W.,
While Dow’s products and services focus on improving daily living, that mantra doesn’t just apply to customers
but also to Dow employees. The Company has always focused on providing its employees with a workplace where every person
can reach his or her full potential. In this vein, Dow has always looked for ways to provide its employees with the best health benefits
and services. Dow was quick to understand the value of HMOs in the early 1990’s, pricing HMO plans advantageously against
other medical plans and giving its employees valuable and cost-effective benefits options.
Dow originally administered all of its benefits in-house, i.e. determining which plans to offer in which geographic regions,
managing all enrollment activities, responding to employee questions and mediating issues with the carriers, etc. However, the
retirement of key benefits personnel in 1994 made the company seriously reflect on the entire benefits area, to evaluate what the
core competency of the benefits team should be moving forward. Dow quickly determined that its internal focus should be more
on strategic benefits issues rather than on daily insurance claims and carrier management for its HMOs. So Dow went looking
for a partner who could handle these and other benefits administration tasks.
Dow evaluated several benefits administration
outsourcing firms for its HMO benefits, and ended
up selecting Secova as its partner, primarily for the
company’s significant HMO experience.
“While Secova’s array of services was just what
we were looking for, it was mostly the depth of experience
and expertise of their people that drew us to them,” said
Steven Morgenstern, Health Plans Manager for Dow.
“We felt very comfortable that they could successfully
perform the duties we were asking them to perform – to
help us get our hands around our HMO world – and that
was essential in making our first foray into working with an
outsourcing partner successful.”
Working with Secova has significantly simplified the eligibility process for Dow, providing them with incomparable flexibility to
make changes quickly and efficiently. With a large, geographically dispersed workforce, Dow’s employee benefits changes
are extremely time-intensive. While previously managed in-house, Secova began handling Dow’s HMO
eligibilities, managing all electronic interfaces with vendors, eligibility verification and comprehensive life event processing.
The Dow benefits team was so pleased with the simplification of this administrative task that when a large problem arose, they
looked to Secova for resolution. In 1999, Dow went through a completely new HR system conversion to PeopleSoft, which
occurred within the open enrollment period. Ultimately, while the data residing inside their system was accurate, the data
output was grossly incorrect, causing tremendous eligibility issues for their employees across all their benefit lines.
To cure this hiccup, Secova was able to easily identify the bad data and
correct it before it went out to the carriers. Additionally, because of the
quality of Secova’s performance and service, Dow determined that it
no longer wanted to manage any vendors personally. For them, it was an easy
decision to outsource all the company’s health benefits administration –
including the self funded PPO plans, the dental plans , FSA and the like –
to Secova.
“Secova now manages the entire eligibility process for us, maintaining
dedicated data interfaces with all of our benefits providers and systems.
It’s a virtually seamless process, with Secova collecting and providing the
carriers with the information they need, in the format they need.”
Morgenstern continued, “It’s truly simplified the entire eligibility process for
us, any new vendors we bring on know they need to work with Secova for
the eligibility information they require. The consolidation of all eligibility
has also allowed us to be much more flexible with our carriers, we can make
quick changes if need be, it’s not an unbearable process. We are able to
keep one interface going strong with Secova and any new vendors that
come on get their eligibility data from them. So we don’t have to do anything
when a new vendor comes on, it’s seamless. Obviously, our IT folks LOVE
that aspect.”
Board research shows that more than 85 percent of MNC employees in China are
either ambivalent or dissatisfied with their career and development opportunities. Satisfying
employee career expectations increases their retention likelihood by up to 20 percent. MNC
executives who can differentiate their employment brand around compelling careers and
robust development are much more effective at attracting qualified job candidates.
Make sure compensation is competitive, but focus on career development. Winning employment
brands in China emphasize visibility into future career opportunity.
Use career development plans. While commonly used in the West, career development plans in
China are less well developed and managed.
Begin career planning early in an employee’s tenure. Progressive companies like Dow Chemical
are introducing career paths as part of employee on-boarding in China—several years earlier
than most competitors.
Be f lexible, allow for early “non-obvious” moves. Dow also enables employees to move freely
between functions and businesses, specifically allowing—and encouraging—non-traditional
and “non-obvious” moves.
Enable managers to steward their employees’ careers. Leading employers in China, like Novartis,
have learned that providing managers with consistent tools and guidelines to communicate
about and manage employee career expectations, increases an employee’s career satisfaction.
Dow Chemical is a provider of plastics, chemicals, and agricultural products with presence in more than 175 countries and employing 46,000 people worldwide. Its stated mission under the current CEO, Andrew N. Liveris, is: "To passionately innovate what is essential to human progress by providing sustainable solutions to our customers" with the vision: "To be the most profitable and respected science-driven chemical company in the world".[3] Annual R&D spending exceeds $1 billion.
The company was founded in 1897 by Canadian-born chemist Herbert Henry Dow, who had invented a new method of extracting the bromine that was trapped underground in brine at Midland, Michigan.[4] While at first the company sold only bleach and potassium bromide, Dow today has seven major operating segments, with a wide variety of products offered by each.[5] The company's 2005 sales totaled $46.3 billion, with a net income of $4.5 billion. Dow has been called the "Chemical companies' Chemical company"[6] in that most sales are to other manufacturers rather than to end users. Dow has sold directly to customers, primarily in the Human and Animal Health and Consumer Products markets.
This is the Summary Plan Description (SPD”) for the COLI Incentive Benefit Plan for Salaried Employees and the COLI
Incentive Benefit Plan for Midland Hourly Employees (hereafter collectively referred to as the “Plans” or the “Program”, and
each singly referred to as “Plan”). Both COLI Incentive Benefit Plans are part of the COLI Incentive Benefit Program. The
Plans provide a death benefit at no cost to Employees who signed and submitted a COLI Consent Form in 1991 or 1992 on
whom The Dow Chemical Company (Company) purchased a corporate-owned life insurance1 (“COLI”) policy on their lives.
In addition, the Plan provides a death benefit for Employees for whom the Company purchased a COLI policy on their lives
in 1983, 1985 or 1988. The amount of the benefit upon the death of an active Salaried Employee, Salaried Retiree, or a
person who was being paid a benefit under Dow’s Long Term Disability Income Protection Plan (LTD) at time of death is
$5000. The amount of the benefit upon the death of a Salaried Employee who left Dow and/or a Participating Subsidiary prior
to Retirement is $2,500. The amount of the benefit upon the death of an active Midland Hourly Employee, Midland Hourly
Retiree, or a Midland Hourly Employee who was being paid a benefit from Dow’s Michigan Division Contract Disability
Program at time of death is $4,000. The amount of the benefit upon the death of a Midland Hourly Employee who left Dow
and/or its Participating Subsidiaries prior to Retirement is $2000. For purposes of the COLI Incentive Benefit Plans, an
employee does not “leave Dow and/or its Participating Subsidiaries” when the employee leaves Dow or a Participating
Subsidiary to immediately work for an entity that is partially owned, directly or indirectly, by The Dow Chemical Company.
FRAUD AGAINST THE PLAN
Any Plan Participant who intentionally misrepresents information to the Plan or knowingly misinforms, deceives or
misleads the Plan, or knowingly withholds relevant information, may have his/her coverage cancelled retroactively to the date
deemed appropriate by the Plan Administrator. Further, such Plan Participant may be required to reimburse the Plan for
Claims paid by the Plan. The employer may determine that termination of employment is appropriate and The Plan may
choose to pursue civil and/or criminal action. The Plan Administrator may determine that the Participant is no longer eligible
for coverage under the Plan because of his or her actions.
GRIEVANCE PROCEDURE
If you want to appeal the denial of a claim for benefits, see the section of this SPD entitled “Appealing a Denial of Claim”.
If you feel that anyone is discriminating against you for exercising your rights under this benefit program, or if you feel that
someone has interfered with the attainment of any right to which you feel you are entitled under this benefit program, or if you
feel that the Plan Administrator has denied you any right you feel that you have under this benefit program, you must notify
the Plan Administrator (listed in the “ERISA Information” section of this SPD) in writing within 60 days of the date of the
alleged wrongdoing. The Plan Administrator will investigate the allegation and respond to you in writing within 90 days. If
the Plan Administrator determines that your allegation has merit, the Plan Administrator will either correct the wrong (if it
was the Program which did the wrong), or will make a recommendation to the Plan Sponsor or Participating Employer if any
of them have been alleged to be responsible for the wrongdoing. If the Plan Administrator determines that your allegation is
without merit, you may appeal the Plan Administrator’s decision. You must submit written notice of your appeal to the Plan
Administrator within 60 days of receipt of the Plan Administrator’s decision. Your appeal will be reviewed and you will
receive a written response within 60 days, unless special circumstances require an extension of time. (The Plan Administrator
will give you written notice and reason for the extension.) In no event should the decision take longer than 120 days after
receipt of your appeal. If you are not satisfied with the Plan Administrator’s response to your appeal, you may file suit in
court. If you file a lawsuit, you must do so within 120 days from the date of the Plan Administrator’s written response
to your appeal. Failure to file a lawsuit within the 120 day period will result in your waiver of your right to file a
lawsuit.
ERISA RIGHTS
When you are a Participant in the COLI Incentive Benefit Program, you are entitled to certain rights and protections under
the Employee Retirement Income Security Act of 1974 (ERISA). This law requires that all Program Participants must be able
to:
• Examine, without charge, at the Plan Administrator's office and at other specified locations, the Plan Document and annual
report filed with the U.S. Department of Labor.
• Obtain copies of the Plan Document upon written request to the Plan Administrator. The Administrator may charge a
reasonable fee for the copies.
• Receive a summary of the Program's annual financial report. The Plan Administrator is required by law to furnish each
Program Participant with a copy of this summary report.
In addition to creating rights for you and all other Program Participants, ERISA imposes duties on the people who are
responsible for operating an employee benefit plan. The people who operate the COLI Incentive Benefit Program, called
"fiduciaries" of the Program, have a duty to act prudently and in the interest of you and other Program Participants and
beneficiaries.
No one, including your employer or any other person, may discharge you or otherwise discriminate against you in any way
to prevent you from obtaining a Program benefit, or from exercising your rights under ERISA. If your claim for a Program
benefit is denied, in whole or in part, you must receive a written explanation of the reason for the denial. If you feel that
anyone is discriminating against you for exercising your rights under this benefit program, or if you feel that someone has
interfered with the attainment of any right to which you feel you are entitled under this benefit program, you must notify the
Plan Administrator (listed in the “ERISA Information” section of this SPD) in writing within 120 days of the date of thealleged wrongdoing. The Plan Administrator will investigate the allegation and respond to you in writing within 120 days. If
the Plan Administrator determines that your allegation has merit, the Plan Administrator will either correct the wrong (if it
was the Program which did the wrong), or will make a recommendation to the Plan Sponsor or Participating Employer if any
of them have been alleged to be responsible for the wrongdoing. If the Plan Administrator determines that your allegation is
without merit, you may appeal the Plan Administrator’s decision. You must submit written notice of your appeal to the Plan
Administrator within 60 days of receipt of the Plan Administrator’s decision. Your appeal will be reviewed and you will
receive a written response within 60 days. If you are not satisfied with the Plan Administrator’s response to your appeal, you
may file suit in court. If you file a lawsuit, you must do so within 120 days from the date of the Plan Administrator’s
written response to your appeal. Failure to file a lawsuit within the 120-day period will result in your waiver of your
right to file a lawsuit.
If you have any questions about the Program, you should contact the Plan Administrator. If you have any questions about
this statement or about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and
Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W.,
While Dow’s products and services focus on improving daily living, that mantra doesn’t just apply to customers
but also to Dow employees. The Company has always focused on providing its employees with a workplace where every person
can reach his or her full potential. In this vein, Dow has always looked for ways to provide its employees with the best health benefits
and services. Dow was quick to understand the value of HMOs in the early 1990’s, pricing HMO plans advantageously against
other medical plans and giving its employees valuable and cost-effective benefits options.
Dow originally administered all of its benefits in-house, i.e. determining which plans to offer in which geographic regions,
managing all enrollment activities, responding to employee questions and mediating issues with the carriers, etc. However, the
retirement of key benefits personnel in 1994 made the company seriously reflect on the entire benefits area, to evaluate what the
core competency of the benefits team should be moving forward. Dow quickly determined that its internal focus should be more
on strategic benefits issues rather than on daily insurance claims and carrier management for its HMOs. So Dow went looking
for a partner who could handle these and other benefits administration tasks.
Dow evaluated several benefits administration
outsourcing firms for its HMO benefits, and ended
up selecting Secova as its partner, primarily for the
company’s significant HMO experience.
“While Secova’s array of services was just what
we were looking for, it was mostly the depth of experience
and expertise of their people that drew us to them,” said
Steven Morgenstern, Health Plans Manager for Dow.
“We felt very comfortable that they could successfully
perform the duties we were asking them to perform – to
help us get our hands around our HMO world – and that
was essential in making our first foray into working with an
outsourcing partner successful.”
Working with Secova has significantly simplified the eligibility process for Dow, providing them with incomparable flexibility to
make changes quickly and efficiently. With a large, geographically dispersed workforce, Dow’s employee benefits changes
are extremely time-intensive. While previously managed in-house, Secova began handling Dow’s HMO
eligibilities, managing all electronic interfaces with vendors, eligibility verification and comprehensive life event processing.
The Dow benefits team was so pleased with the simplification of this administrative task that when a large problem arose, they
looked to Secova for resolution. In 1999, Dow went through a completely new HR system conversion to PeopleSoft, which
occurred within the open enrollment period. Ultimately, while the data residing inside their system was accurate, the data
output was grossly incorrect, causing tremendous eligibility issues for their employees across all their benefit lines.
To cure this hiccup, Secova was able to easily identify the bad data and
correct it before it went out to the carriers. Additionally, because of the
quality of Secova’s performance and service, Dow determined that it
no longer wanted to manage any vendors personally. For them, it was an easy
decision to outsource all the company’s health benefits administration –
including the self funded PPO plans, the dental plans , FSA and the like –
to Secova.
“Secova now manages the entire eligibility process for us, maintaining
dedicated data interfaces with all of our benefits providers and systems.
It’s a virtually seamless process, with Secova collecting and providing the
carriers with the information they need, in the format they need.”
Morgenstern continued, “It’s truly simplified the entire eligibility process for
us, any new vendors we bring on know they need to work with Secova for
the eligibility information they require. The consolidation of all eligibility
has also allowed us to be much more flexible with our carriers, we can make
quick changes if need be, it’s not an unbearable process. We are able to
keep one interface going strong with Secova and any new vendors that
come on get their eligibility data from them. So we don’t have to do anything
when a new vendor comes on, it’s seamless. Obviously, our IT folks LOVE
that aspect.”
Board research shows that more than 85 percent of MNC employees in China are
either ambivalent or dissatisfied with their career and development opportunities. Satisfying
employee career expectations increases their retention likelihood by up to 20 percent. MNC
executives who can differentiate their employment brand around compelling careers and
robust development are much more effective at attracting qualified job candidates.
Make sure compensation is competitive, but focus on career development. Winning employment
brands in China emphasize visibility into future career opportunity.
Use career development plans. While commonly used in the West, career development plans in
China are less well developed and managed.
Begin career planning early in an employee’s tenure. Progressive companies like Dow Chemical
are introducing career paths as part of employee on-boarding in China—several years earlier
than most competitors.
Be f lexible, allow for early “non-obvious” moves. Dow also enables employees to move freely
between functions and businesses, specifically allowing—and encouraging—non-traditional
and “non-obvious” moves.
Enable managers to steward their employees’ careers. Leading employers in China, like Novartis,
have learned that providing managers with consistent tools and guidelines to communicate
about and manage employee career expectations, increases an employee’s career satisfaction.
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