The Goodyear tires & Rubber firm on February 28 announced a series of changes to the U.S.-based retail and also salaried employee pension and retiree advantage plans aimed at boosting its worldwide competitiveness while considerably reducing its cost structure."These changes enable us to proceed to administer the sort of compensation packages that space competitive and will attract and also retain talented associates," said Kathleen T. Geier, an elderly vice chairman of human resources. "They are also consistent through our goal of reducing expenses in overabundance of $1 exchange rate by the finish of 2008."The changes will it is in phased in end a two-year period, with many benefit arrangement changes effective in 2008 and the most far-reaching pension plan changes in 2009. As a result, Goodyear expects after-tax save of $80 million to $90 million in 2007, $100 million come $110 million in 2008, and $80 million to $90 million in 2009 and also beyond.The actions space expected to minimize the company"s pension duty by approximately $100 million and its obligation for other post-retirement benefits by about $525 million assuming attention rates offered to value the responsibilities remain comparable to those used at December 31, 2006.Goodyear plans to record a one-time after-tax fee of approximately $65 million regarded these actions in the very first quarter of 2007.Benefit setup changes reliable January 1, 2008, include:increasing the amounts that current and future salaried retirees contribute toward the cost of their medical benefits;redesigning retiree medical advantage plans to minimization cost affect on premiums;closing the company"s Medicare supplement arrangement to new entrants; and,discontinuing company-paid life insurance because that salaried retirees.The pension alters include:freezing the current salaried defined benefit pension plans as of December 31, 2008;replacing the defined advantage pension to plan with amplified 401(k) savings accounts with varying level of company contributions for current associates start Jan. 1, 2009; and,introducing company-matching contributions because that the salaried 401(k) savings setup at 50 percent the the an initial 4 percent of annual pay start January 1, 2009."The changes that we"ve make were only made after cautious consideration the alternatives, recognizing that there will certainly be differing levels of an individual impact depending upon the scenarios of every associate and also retiree," Geier said.According come Geier, there is a strong movement on the component of major corporations away from defined advantage pension plans and toward defined contribution plans. Additionally, the newly enacted Pension defense Act is meant to advice the migration away from timeless defined benefit pensions.Details of the plan changes will certainly be directly interacted to the impacted salaried associates and also retirees over the following several weeks. Moving forward, Goodyear associates will be may be to access online retirement modeling tools and investment education and learning sessions to assist with pension and also benefit decisions, and also to arrangement for the impact of this changes.Goodyear is just one of the world"s largest tire companies. The company manufactures tires, engineered rubber products and also chemicals in more than 90 facilities in 28 countries approximately the world.
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Goodyear employs an ext than 75,000 world worldwide.