Reuters reported that Nissan Motor Co. Ltd. is dropping company-sponsored health-care coverage for its retired manufacturing employees in the United States and will instead pay them an annual stipend.

Also, people hired at Nissan North America after January 1 will not receive a company pension when they retire, but will be offered a plan similar to the 401(k) investment strategy.

The changes are part of an effort to remain competitive in the automotive industry, Nissan said on Monday.

Starting next year, Nissan will pay retirees an annual stipend of $2,500 to supplement Medicare coverage and for any out-of-pocket medical expenses, Nissan spokeswoman Julie Lawless said.

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