Guild pension vote will be Tuesday [updated]
The merger agreement language was finalized Friday, clearing a way for a vote on Tuesday.
The vote will be from noon to 2 p.m. and 4:30-6 p.m. Tuesday at the Colonie Public Library.
Like you, we are frustrated that the company’s delay in producing a written document is pushing a vote into Christmas week. We understand some employees have previously scheduled holiday parties then.
There is little excuse when the conceptual agreement was reached Dec. 2 not to have had a written agreement before Dec. 18.
The language change in the contract is simpler and an agreement has been reached. It would simply remove the reference in Section 14.C that refers to the fund having joint trustees. Publisher George Hearst and President Tim O’Brien have agreed on that language change.
At the meetings, our aim is to have the trustees discuss the proposal with you and answer your questions before you decide.
Guild President Tim O’Brien issued a statement explaining his position, which is that members need to vote with a complete understanding of all the pros and cons and the potential impact of their vote. Many of you have heard from Chief Steward Ray Pitlyk as well, who strongly supports the merger proposal. Other Executive Board members also will speak at the meeting, but we hope most of the time will be taken up by questions and answers before you vote.
As soon as we get word that the final merger document is in hand, we will rush out a flier. The challenge, of course, is that we continue to work at our jobs while we wait for the lawyers to finish.
To vote, you must be a member in good standing, which means no more than 30 days in arrears. It does mean some people will have to pay several months of dues before they can vote, but we have repeatedly encouraged members not to fall behind to prevent just such events.
5 Comments
puzzled again
One thing that never seems to be explained in all these explainers: for those of us who do not have inside baseball knowledge of pension lingo, what does it mean when your pension is “frozen?” That you accumulate no new benefits (which I thought happened in the last contract)? So this means that long-term workers have locked in their benefits, but short-term workers will never earn a nickel more? What does “frozen” mean to those not yet vested in the plan?
Also, are those over 55 grandfathered into the early retirement deal, or is this at risk if we had the fund to them? Can the company immediately, upon receipt, declare a 50 percent penalty for early retirement, or is full benefit at 55 locked in for those over 55 whenever they decide to take it? Thank you for clarifying.
albanyguild
If a pension is frozen, you accrue no more benefits. Any of you have earned to date are guaranteed by law and cannot be taken away. That would mean someone not yet vested would never be.
You’re right in that our last contract did cap out pension benefits for long-term workers. A freeze would stop all accruals for everyone.
As for the early retirement, the same rule would apply: The benefit would be guaranteed for two years.
Hmmmm
An unrelated matter – but news today – when the company laid off Guild workers, aren’t they under any obligation to contact them first when there is an opening on the staff?
http://blog.timesunion.com/capitol/archives/20986/coming-soon-to-capcon-departures-arrivals/
The TU is re-hiring a guy who bailed on them, rather than bringing back someone who was laid off this year? I know he’s kicking the bureau’s behind on breaking news, but something doesn’t seem kosher here. Oh and Merry Christmas to you, too.
John Runfola Guild Trustee
Here are some answers from the neutral pension board attorney concerning questions from the first posting.
Please come to a meeting today to vote. Thank you. John Runfola Guild Trustee
John,
The answers to the questions posed by Guild members set out in you message below follow.
1. Q: What does it mean when your pension is “frozen?”
A. A plan is frozen when it is amended to provide that there will be no further accruals of benefits after a specific date. A “frozen” plan is not terminated and the funding obligations of the sponsoring employer continues; but, employees who are, or were, covered under the plan do not “earn” any more benefits even though they continue to work for the employer.
2. Q: There is some confusion about the 2006 “soft freeze” and the so-called A and B options with full retirement at age 55 or keeping accumulating benefits until age 65.
A: The confusion referred to in your question appears to involve a misunderstanding of the amount of retirement benefit payable to a person who retires before attaining the Plan’s normal retirement age of 65. Most pension plans provide that persons who retire before normal retirment age have their benefits reduced actuarially to take into account that they will be receiving them for a longer period of time. Early retirment reductions are calculated by first determining the amount of benefit to which the participant would be entitled had he retired at age 65 taking into account the number of years of service with which he/she was credited as of his/her retirement date. Then the benefit is reduced, generally by about 0.5%, for each month between the participants actual retirement and the month when the participant would have attained age 65.
Prior to July 1, 2006, the Guild Plan provided an unreduced retirement benefit to an employee who had: (1) earned one or more Hours of Service on or after Jan. 1, 1999, (2) attained age 55, (3) had 5 years of vesting service, and (4) commenced receiving benefis imediately upon reitring from covered employement would receive, upon retirement an unreduced pension (i.e., a pension in the same amount as the participant would have been entitled had he/she retired at age 65). The unreduced early retiremnt benefit was significantly subsidized by the Plan. Recognizing the high cost of the subsidy, this provision was amended in 2006. The unreduced early retirement benefit was frozen for benefit accruals as of June 30, 2006 with what is known as a “wear-away.” Hence, Participants who retire on or after July 1, 2006 but have not attained age 65 are entitled to the a benefit that is the GREATER of:
(A) the retirement benefit to which a participant would have been entitled had he/she retired at normal retirment age reduced actuarially pursuant to the following table based on the Participant’s age on his Early Retirement Date:
Age
Percentage of Normal
Allowance Payable
64
93 1/3
63
86 2/3
62
80
61
73 1/3
60
66 2/3
59
63 1/3
58
60
57
56 2/3
56
53 1/3
55
50
OR
(B) An Early Retirement Allowance computed in the same manner as a Normal Retirement Allowance (that is, without reduction for commencement of benefits before Normal Retirement Age), and based on Average Annualized Earnings determined on a Participant’s Early Retirement Date, but determined taking into account only the Participant’s Credited Service Years accrued as of June 30, 2006.
It is important to be aware that if a TU employee covered by the Plan continues to work until he/she attains age 65, there will be no reduction. A benefit reducition will only occur if the employee retires before attaining age 65. It is entirely possible that Part B of the above stated rule (which provides a reduced benefit based on the participants service on June 30, 2006 and greatest average annual salary during any three year period) will provide to an early retiree a greater benefit than will Part A (which provides for an actuarially reduced benefit based on all of a participant’s service).
A vested Participant who terminates employment with the Times-Union but does not immediately commence his pension from the Plan (or does not retire from covered employment in the Guild bargaining unit) is not, and never was, eligible for the Early Retirement Allowance. Such Participant is instead eligible for the Termination of Employment Allowance, which benefit is actuarially reduced to take into account the fact that it commences before Normal Retirement Age.
3. Q: What does “frozen” mean to those not yet vested in the plan?
A: If future accruals under a plan are frozen, a participant who is not yet vested may still vest if he/she continues to work for the sponsoring employer for the sufficient number of years required for vesting (even if a plan is frozen). For example, suppose a new employee has 4 years of service at the TU as of Jan. 1, 2012 and the plan is frozen on of that date. If the employee works one additional year at the TU (i.e., until Jan. 1, 2013), he/she would then be vested. However, the participant would be entitled only to a benefit based on his/her 4 years of benefit accrual credit (i.e., years of service prior to the freeze).
4. Q: Are those over age 55 grandfathered into the early at full pension language, or is it as risk if Hearst assumes control of the fund?
A: Once benefits accrue, they may never be reduced or eliminated. Hearst could, after the second anniversary of the merger, reduce the rate of future benefit accruals (or stop future accruals altogether). But, it could not reduce or eliminate any benefits accrued as of that date. Those persons who satisfy the age and service requirement of the unreduce early pension (which was frozen in 2006), would remain entitled to the benefit.
5. Q: Can the company, immediately, upon receipt of the fund, declare a 50 percent penalty for early retirement?
A: No. As noted before, no reductions in benefits already accrued are permitted (and the applicable reduction factors for early retirement are regarded as part of the accrual formula).
6. Q: Is the full benefit at 55 locked in for those over age 55 whenever they decide to take it?
A: Yes. But see the response to question 3 above. The unreduced early retirement benefit is only available to persons who retire directly from the TU. A person who severs employement with the TU and does not apply for a benefit until later is not entitled to the unreduced benefit.
7. Q: Does a yes vote to turn over the fund guarantee no changes for two years?
A: Yes. That is what the Merger Agreement provides. It is legally enforceable by the Guild Trustees. As of this moment, Hearst has not stated whether it would make any material changes to the Plan at the expiration of the two year period.
I hope the foregoing is helpful. Please feel free to call with any questions.
Best wishes,
Tom
Thomas J. Hart
Principal
Slevin & Hart, P.C.
1625 Massachusetts Ave., N.W., Suite 450
Washington, D.C. 20036
202-797-8700 Tel
202-234-8231 Fax
thart@slevinhart.com
A New Voice
Possibility of pension benefits temporarily being frozen? OK.
More money temporarily taken out of paychecks to compensate for underfunded pension? OK.
Giving permanent control of pension to a company that, like most corporations in these troubled times, wants to get out of the pension business…and that asks for loyalty with no guarantee of reciprocating same? Not a chance.
If you haven’t already been working here for 20-something years, those “benefits you’ve already accrued” don’t amount to much. Please…consider the bigger picture…consider the future.
Vote no. It’s a no-brainer.