According to a press release the changes are effective January 1, 2010. Active management employees who participate in the company’s defined benefit pension plan will retain their accrued pension benefit, as earned through Dec. 31, 2009, and are eligible to receive their vested accrued benefit when they leave Qwest, according to the firm.
Additionally, the company announced it will not award a merit increase to management employees in 2010.
“It is important for us to reduce costs, in part through the steps we are taking with the pension and management salaries, yet maintain competitive benefits and compensation for our employees,” said Edward A. Mueller, chairman and CEO of Qwest. “By continuing to match employees’ contributions to our 401(k) plan, provide solid health benefits and not reduce salaries, we believe we are better positioned for future success.”
The company expects the change to the Qwest Pension Plan to result in annual savings of approximately $60 million, and the 2010 salary freeze is expected to save the company about $35 million in 2010. Along with other changes to employee health-plan and life insurance benefits, total savings would amount to approximately $100 million in 2010.
Retirees, former employees and employees covered by collective bargaining agreements with the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) are not affected by the change.