About 1,300 salaried employees will not be affected by the plan since they had enough years of service with Ford prior to Visteon’s spinoff to retire under Ford’s plan, according to the Detroit Free Press. The Free Press report also points out that, of the 6,700 other salaried employees, those age 45 or older as of Friday will be provided with some money in special accounts.
The company calls those accounts Retiree Medical Cash Balance Accounts and plans to fund them with $250 each month plus interest. Upon retirement, the company will provide a one time credit of $70 times the employee’s age and years of service combined.
Visteon’s new policy represents a trend in the reduction of retiree health benefits offered by employers of auto workers, as the Free Press report also mentioned similar plans previously by Ford and the Chrysler Group. The report also noted that this is a general trend of health care cost shifting, stating that health benefits consultants expect from 50% to 80% of employers nationwide to offer such plans by the end of 2006.
The effective date of Visteon’s new plan is June 1, 2007.
Visteon has more than 200 facilities in 25 countries and employs approximately 70,000 workers. See www.visteon.com .