NYT pension fund awash in red ink, per NY Post

http://www.nypost.com/seven/02022009/business/pension_tension_153124.htm

Good lord.

 

Good thing I'm not counting on that pension.

 

Surprise, surprise, surprise!

 

Unfortunately, I am.

 

I didn't work for the NYT but for a small, regional paper that is part of the Times chain. I left the paper a number of years ago, but put in 13 years with the company. I was wondering if anyone has gone through a similar situation in another chain. Can I expect a pension? Will I get nothing? Will there be some sort of buyout?

 

This is a weak story lacking context and explanation. Its main goal is clearly to sensationalize rather than inform.

The government requires that companies have X amount of cash in their pension fund to pay for future long-term commitments. When the value falls below that X amount, companies have to inject funds into the pension to meet the government-mandated reserves.

A shortfall does not mean a company is in danger of defaulting now, but could potentially default years from now.

With the stock market crushed, many companies are in this position (as the story does explain, although not very well, and not very prominently). They are facing a never-before-seen shortfall and could be forced to find a lot of cash in the next year or so to make up the shortfalls.

Or the government could relax its guidelines, which - right or wrong - is what I'd expect to happen rather than seeing a lot of big names go bankrupt because of a government regulation intended to protect people from losing their pensions years from now.

Because you know who pays the pensions if they go bankrupt? A quasi-government entity, albeit at a reduced scale. See Pension Benefit Guarantee Corp.

http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation

 

Oh, you law-school guys....