TOLEDO, Ohio, Sept. 13, 2012 /PRNewswire/ -- Libbey Inc. (NYSE MKT: LBY), as part of its strategic plan to strengthen its core business, increase efficiency and generate growth, today announced 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 nine 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 January 1, 2013. All pension plan participants will retain their accrued pension benefits. The Company will offer salaried associates an improved 401(k) benefit that includes an increased Company match. Effective December 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, chief executive officer 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 five percent reduction of its global managerial, professional and administrative workforce.