TOLEDO, OH (Toledo News Now) - As part of its strategic plan to strengthen its core business, increase efficiency and generate growth, Libbey Inc. announced Friday modifications to the company's retirement benefits for its U.S. salaried associates.
The company also announced an additional reduction-in-force of its U.S. salaried staff, bringing the total planned reduction, including those announced in July 2012, to approximately 9 percent of its global managerial, professional and administrative workforce. The benefits and staffing changes announced this quarter are estimated to reduce annual expenses by more than $10 million annually (based on certain actuarial assumptions).
To address rising pension costs, Libbey will freeze company contributions to its cash balance pension plan for U.S. salaried associates as of Jan. 1, 2013. All pension plan participants will retain their accrued pension benefits. Libbey will offer salaried associates an improved 401(k) benefit that includes an increased company match.
Effective Dec. 31, 2012, Libbey also will end its existing healthcare benefit for salaried retirees age 65 and older, and instead provide a Retiree Health Reimbursement Arrangement (RHRA) that supports retirees in purchasing a Medicare plan that meets their needs.
"These changes represent an important step in reducing U.S. costs, and will further strengthen our balance sheet and financial position," said Stephanie Streeter, CEO of Libbey Inc. "We are committed to making our operations as efficient as possible, while still offering associates and retirees competitive benefits. We have achieved both with these benefits changes."
In July, Libbey announced a new strategic plan designed to further strengthen its core business and enable the company to improve profitability and realize growth opportunities. The new strategy is specifically aimed at better leveraging Libbey's key lines of business, improving service to customers, maximizing market opportunities, and increasing Libbey's efficiency. As part of the July strategy announcement, Libbey outlined a new regionally-focused leadership structure and reorganization that resulted in a 5 percent reduction of its global managerial, professional and administrative workforce.
"Decisions to eliminate jobs are very difficult to make, but they are necessary in order to reduce our costs, adjust staffing resources to support the new strategy, and better position Libbey for the future," explained Streeter.
Libbey is providing impacted associates with severance benefits and outplacement assistance.
Savings from the benefits changes are expected to begin in January 2013. Staffing reduction savings should begin in mid-2013.
According to Libbey officials, the announced changes will not impact Libbey's customer service or offerings.
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