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Gannett freezes employee pensions

Discussion in 'Journalism topics only' started by StaggerLee, Jun 11, 2008.

  1. StaggerLee

    StaggerLee Active Member

    Memo just went out company-wide.

    Sadly, I'm not financially responsible enough to know how this will actually affect employees, other than the memo stating that it should be noted that nearly all employees will see a diminished benefit.

    http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003815509

     
  2. Ben_Hecht

    Ben_Hecht Active Member

    And away we go.
     
  3. wickedwritah

    wickedwritah Guest

    I'm sure this will not fly at Guild shops.
     
  4. Glad I got out of Gannett when I did, though I wish it had been even earlier.

    This is just tasteless and wrong. Good thing we have the new Gannett mausoleum newseum to remind us what newspapers once were.
     
  5. alleyallen

    alleyallen Guest

    You're not going to lose the money (if any) you already have in your pension plan, but you also won't get any future funds added, or see any growth if it's a cash balance plan.

    Getting the company match in stock as opposed to an outright contribution blows, though. All those Enron employees who had their entire 401 (k) invested in company stock and company stock matches really took it hard when the company crated.
     
  6. DanOregon

    DanOregon Well-Known Member

    Gannett stock absolutely killed my 401k, if you didn't get your money out of Gannett each quarter, it would eat all of your gains in other categories. Now with employees getting more big G stock its only going to be worse. And even if they give a COLA on the pension, that means G will be able to tap into any pension fund growth over the 3 percent.
    How long do you think an employee would last if he went to a boss and said, uh, I'm going to give YOU less when I work here. How'd you like that?
     
  7. WS

    WS Member

    got to make those quadruple profits
     
  8. Baltimoreguy

    Baltimoreguy Member

    I've been out of Gannett for a while, but if my understanding of the pension is correct, this will be a significant hit for many people, particularly those who have been there the longest.

    The old plan was that your pension would be some formula involving a percentage of your final pay (which was usually your highest pay) multiplied by the number of years you worked there. Now they're slicing that off.

    Company match has always been in stock only, so that' s no loss -- no loss, that is, except the crushing losses in the value of Gannett stock in recent years. So the old highest match formula was if you maxed out at 6% contribution, they'd kick in 3% for a total of 9%. Now, it looks like if you max out at 5% contribution, they'll kick in 5% for a total of 10%. So, GCI has suddenly severed its pension plan and increased its 401(k) contribution from 3 to 5%. So generous. For someone making $40,000, that's a whopping extra $800 a year in your retirement account.
     
  9. hankschu

    hankschu Member

    This actually happened at my shop, a guild shop, with our approval, of course.

    It does mean a smaller monthly pension, but it also had one effect that actually benefits employees who are thinking of leaving the paper or business and getting another job. There's less need to stick around to boost your pension.

    When they capped our pension, my wife, already at the top level, quit and got another job. Now, as soon as she turns 55 in five years she can start taking the pension for the rest of her life, in addition to what she earns at her current job.

    I'm in the same boat, and it might allow persuade me to retire early.

    Because the monthly payment is capped, it doesn't matter if you start taking it when you're first eligible (I think that's 55 in our unit) or later down the road.

    My wife left the paper
     
  10. Baltimoreguy

    Baltimoreguy Member

    Good point. I was thinking the same thing -- I knew some old-timers who were hanging around to keep ringing up that "years of service" multiplier. Now that that's capped, I bet some of them hang it up. Almost like a backdoor buyout for Gannett.
     
  11. playthrough

    playthrough Moderator Staff Member

    My wife's media company did something similar, offering stock matches for the 401k. I don't think a share of that stock can buy a pack of gum right now.
     
  12. My company offers a fairly generous pension plan. But I'm not yet 30 and I have absolutely no illusions that it will be around for my retirement. If it is, it will be a nice benefit, but it's nothing something I'm counting on in this climate.
     
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