Libbey Modifies Retirement Benefits, Announces Additional Staff Reductions
TOLEDO-Libbey has modified its retirement benefits for its U.S. salaried associates and announced further U.S. salaried staff reductions, part of its previously stated strategic plan to increase efficiency and generate growth.
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 said, and the company 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 that supports retirees in purchasing a Medicare plan.
"These changes represent an important step in reducing U.S. costs and will further strengthen our balance sheet and financial position," said Libbey CEO Stephanie Streeter. "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."
The newly announced staff reductions, in addition to those announced in July, will result in an approximately 9 percent reduction in Libbey's 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," Streeter said. Libbey said it is providing impacted associates with severance benefits and outplacement assistance.
The benefits and staffing changes announced this quarter are estimated to reduce annual expenses by more than $10 million annually, Libbey said.