Guild reaches conceptual agreement on pension merger
Guild pension trustees reached a conceptual agreement Wednesday with the Company to merge the union pension plan with a company one.
The decision was not an easy one to make. With the fund likely to face shortfalls of $1 million or more a year starting in 2011, the trustees had a choice between facing making cuts to the benefits or hoping that the move to the more solidly financed company plan would help retain benefits into the future.
The decision won’t be final into an agreement is reached on the exact language. The Guild has scheduled an informational meeting at 12:30 p.m. Friday, Dec. 11, at the Colonie Town Library to discuss the decision with members.
The Company was willing to guarantee pension benefits only for the next two years, through Dec. 31, 2011.
“This was a difficult decision for the trustees to reach. We did it after much debate and consultation with Guild Local President Tim O’Brien and International officers and staff,” trustee Ken Crowe said. “Our goal has always been to preserve our pension benefits going forward.”
Under federal law, pension benefits earned to date, and under the agreement over the next two years, are protected and cannot be reduced.
“I want to thank the trustees for all their efforts,” Guild President Tim O’Brien said. “It is not easy to have to decide what to do to best secure your colleagues’ pensions for as long as you can.”
Besides Crowe, the other trustees are Mark Corelli, Christine Wright and John Runfola. They were joined Wednesday by O’Brien, Chief Steward Ray Pitlyk and Melissa Nelson, collective bargaining director for the Guild International and a past Albany president and pension trustee.
15 Comments
puzzled
So, as I understand it, we are going to put our pension fund, to which I have been paid DEFERRED WAGES (the pension fund is NOT a company “gift) for all these years, into company control? The same company that has lied to us throughout contract negotiations, the same company that we have multiple legal actions against for illegal activity during the talks? Great. Bring back the Holiday Fund for Retirees in Need. Hearst will take this fund and spend it on champagne for the celebration of having screwed us AGAIN.
wageslave
I don’t understand the rush to give the company a big Christmas bonus, i.e. our future. Our pension is fine through next year — unlike a lot of funds in this economic climate — and if the stock market continues its recovery, will be fine past even 2010. Perhaps the pension trustees can explain the big rush, the secret backroom dealings, and especially why there’s been no interaction with the membership at large, who have and continue to contribute to that fund.
JiNX-01
Puzzled and wageslave raises really good questions. Act in haste, mourn in leisure.
puzzled
So is there no membership vote on this? If not, why not? And does this mean that at the end of the two-year span, the company controls the rules of collecting…like making the retirement age 70, or limiting benefits to 10 years?
John Runfola Guild Trustee
I urge all Guild members to attend the meeting set for 12:30 p.m. on Tuesday at the Colonie Town Library.
Yours in solidarity,
John Runfola, Guild Trustee
Kenneth Crowe
Hi everyone.
I have read these comments with interest. I have spoken to many people. Some raise questions such as mentioned in these postings. Most others agree that we should merge.
We need to place the conceptual agreement within the world of the newspaper industry as well as here at the Times Union.
The pension plan has a value currently of rougly $27.2 million. While that seems like a lot of money IT IS NOT ENOUGH to fully fund our pension plan.
All the trustees know this. The trustees were advised that about $1.2 million would have go to into the fund annually beginning in 2011. This is in addition to the roughly $330,000 that goes in now.
While the company legally is required to fund the pension they can freeze it effectively ending the plan.
We would be another victim of the newspaper industry collapse. The Philadelphia Inquirer, the Boston Globe, Journal Register newspapers, Tribune newspapers and Gannett newspapers are some of the plans that have ended. The Newspaper Guild pension plan has cut benefits so that each dollar you put in you get 50 cents back.
For us to fund the pension out of our own pockets would require an estimated $135 per person per week. Think of your paycheck being cut by that much. That’s what it will take.
We need $8.4 million to fully fund the pension plan. We don’t have it.
The Hearst Corporation came to the Board of Trustees of our pension plan and offered the funds if we merged our plan into the overfunded Hearst Corporate Broadcast plan. The Guild trustees were shocked by the proposal as we did not want to lose control, but then we agreed to open up talks with Hearst about this. I was the only trustee not contacted by George Hearst before hand to be told what was happening. This was due to being out of town.
We held a conference call with Bernie Lunzer, our international president, Barbara Camens, the union attorney, Melissa Nelson, Tim Schick, Jim Schaufenbill, Tim O’Brien, Ray Pitlyk and the four pension trustees, myself, Christine Wright, John Runfola and Mark Corelli.
Bernie Lunzer said no one gives money to pension plans. He supports merger. Melissa, our former president and a former pension trustee, also does.
We agreed to open talks. Those were conducted on Dec. 2. Melissa Nelson came up from Washington. I served as spokesman at the request of the other trustees.
The result was the conceptual agreement on the merger with 2 years of maintaining the current language without any changes by the Hearst pension oversight committee.
Melissa had advised that she anticipated we would get nothing. We didn’t. We had a wish list, of which all would have to be done by amending the pension agreement. The company trustees will not do so because it will further deepen the underfunding crisis.
With the last contract, the trustees altered the pension that in eliminated any substantial accrual of benefits for current employees. John Runfola calls this a soft freeze.
This was done to reduce the money needed to fund the pension. IT BOUGHT TIME.
Now, we stand at a point where the merger will solve our funding problems.
THIS IS WHAT WE LOOK AT WITHOUT A MERGER:
BY March of 2010 we have to eliminate the death benefit. That’s the life insurance coverage.
In 2011, the additional money has to start flowing into the plan. There will probably be a motion to freeze the plan or to cut benefits again. The advice received from Washington is that there’s no way to stop this.
The only suggested action we’ve received is wait a year. We can’t. Hearst officials said they won’t wait, it’s a one-time offer.
The pension trust exists as a separate entity. We’ve always coordinated our actions with the local. In this case we worked with the local and the international because of the importance of preserving our pension plan.
You all have seen the bulletin issued by Tim O’Brien on the conceptual agreement. What you haven’t heard about is O’Brien’s action today.
It seems Tim doesn’t like the conceptual agreement.
In a telephone to me, Tim told me that I have been removed as a trustee by the local executive board and has replaced me with himself.
He didn’t say that he also had done the same thing to Christine Wright and replaced her with Mark Hempstead.
I told Tim that this was an illegal act and he would have to go to court to remove me.
I also have learned that Tim did not hold a meeting of the executive board and did not speak to all of the members. He apparently intenionally excluded board members that would oppose him.
As a past president, I know the stresses involved in the position. I also know to the best of my ability the circumstances of the newspaper industry as a whole.
In the 1990s, I led the fight to get the pension plan out of another difficulty. The result was an increase in our pension benefit and an across the board improvement in benefits.
That’s why I have agonized and looked for other solutions to preserve our pension plan as it is. I CANNOT FIND ANY. THE INTERNATIONAL HAS NO OTHER SOLUTIONS.
We can’t stick our heads in the sand like an ostrich. We have to act. In this instance acting involves merging.
If you have any questions, please contact me.
albanyguild
Tim O’Brien replies: There are a few inaccuracies in here. We’ll discuss all this and more at our meeting today. Most importantly, the decision to remove Ken and Christine from the board was a gut-wrenching but necessary one. It was not illegal, as Ken alleges. It was done with the full guidance of our counsel, Barbara Camens. It was done, as noted in the post above, because there was grave concern that some of the trustees were poised to enact a merger of the pension fund without a vote of the membership. We received legal advice that that was illegal and beyond the authority of the trustees. I told Ken repeatedly that there should be a vote of the membership. He kept responding that it was the trustees’ decision, and he made clear he intended to shepherd it to passage. In fact, despite being informed that a majority of the Executive Board approved his removal, Ken is still trying to claim he is a pension trustee and implement the merger without consent of the membership.
This isn’t about whether the proposed merger is a good idea or a bad one. It is about following the proper legal process and respecting members’ rights to decide on the future of their pension fund.
As for Ken’s comments alleging that Bernie Lunzer and Melissa Nelson support merger, I was on a conference call with both of them yesterday. (Barbara Camens was also on the call.) No merger document has yet been provided by the Company. Neither would make an endorsement of a document that does not yet exist. They’ve endorsed the concept, but nothing is final until we receive it, review it, discuss it with counsel and the members approve it. Bernie and Melissa are in agreement, after hearing Barbara’s advice, that a membership vote is required.
Ray Pitlyk
I understand you had some questions about the Guild pension and the proposed merger.
To understand why this is being considered, you should review the attached actuary report from the October pension trustees meeting. I can send one to any member who sends me an e-mail at rpitlyk@gmail.com Read it and you will see there is no way to avoid hitting one of the federal legal triggers that declares the pension underfunded and in need of additional money. The added money needed would be about $1.3 million a year for seven years.
The Times Union currently is legal responsible for coming up with that money, but company representatives have made clear that if it has to be paid, it will come out of our hides. One proposed way to “pay” for it is layoffs, but that is not the only way. There could be pay cuts (covering the full amount that way would lead to a $135 a week pay reduction for every Guild member) and pension benefit cuts. I suppose there could some combination of all three. This problem can’t be avoided.
The company proposal, while not ideal, does have the merit of actually putting the roughly $9 million needed into the fund. From the management perspective, this removes the immediate liability the company faces and shifts it to the corporate level. No other Guild pension plan that has run into trouble – that would be virtually all of them – is getting offers of millions of dollars to solve the financing problem.
We wanted a longer guarantee than two years, but couldn’t get it. Since the looming $9 million liability is required by law to be paid over seven years and the merger would fill that shortfall, I can see no financial reason for the company to start slashing benefits. There is also no financial incentive for the Hearst Corp. to slash or shut down the pension plan because it cannot legally pocket any pension funds — they can be used only for pension benefits. And by law all benefits currently accrued cannot be eliminated unless the Hearst Corp goes bankrupt or goes out of business, neither of which seems to be remotely possible.
Waiting to make a decision is pointless. The basic deal, trading our limited say in the current pension plan for a fully funded corporate plan, will be the same in six months or a year. What won’t be the same is availability of the offer. There is only so much money in the corporate plan and if it ends up being offered to other plans at other Hearst units, as corporate representatives says it will be, we will be shut out. For any practical purpose, delaying a decision is the same as rejecting a pension merger.
The mailers and the pressmen at the Times Union have already signed up for this. We should, too. Critics who want to delay action will just make sure we get a worse deal than the mailers and pressmen.
Ray Pitlyk
Chief steward
On Edge
If I’m reading all this correctly, the plan might be our only hope and there is a time limit attached. But deciding to adopt this plan still legally requires the entire membership to vote on it. So why aren’t we doing that?
albanyguild
On Edge (We can all sympathize with your moniker these days):
We are waiting for the company to provide a written proposal. Sadly, the Company instead began trying to poll the pension trustees Monday to get them to vote to approve the merger without providing either a written document or allowing the membership to vote, which would be a contract violation.
As soon as we get a written proposal, it will be sent to our counsel for review. Once final, the proposal will be presented to the membership for a vote. We want to do that quickly but need the company to provide us a written document first.
Gary LaBelle
If a vote is required doesn’t a time and place to meet and vote need to be posted with a specific advanced notice to the membership? I recall it was either 10 days or 14 days prior to the vote. If a written proposal from the company is needed plus the specific time frame to have the vote and a December 31 deadline to accept or reject the offer is all true, then we only have 22 days to get this all done. Will you please clarify and or address the game plan?
albanyguild
Thanks, Gary: Yes, a meeting notice would have to be posted. The Guild’s bylaws generally require 15 days’ notice but specify “In an emergency, the Executive Committee may call a special meting on two (2) days notice.” So we could meet with two days’ notice.
What we’re waiting for is the Company to provide us with a written proposal. The agreement was conceptual. We’re pushing for them to get the written document to us quickly so it can be swiftly reviewed by counsel and then taken to the membership. I called the Company’s attorney earlier in this week, and she hasn’t returned the call yet. I will be contacting the Company again today (Thursday).
A New Voice
A piece of advice my dad gave me long ago seems relevant here: If a deal sounds too good to be true, it probably is.
I don’t want to have $135/week taken out of my paycheck any more than the next person…but even a measure that radical still seems far better to me than putting trust in the Company. Anyone who thinks the Company is looking out for our best interests, or will respond with gratitude and generous compensation for our sacrifices…simply hasn’t been paying attention.
albanyguild
The $135 a week figure makes several assumptions. It assumes the market won’t provide sufficient returns to reduce the projected gap. It assumes Congress will not pass a bill now in the works to change the rules for what pensions need to have to be sound. (It is wise, by the way, not to count on Congress acting.) And it assumes the pension trustees on both sides would take no action to reduce the gap and would just take the whole thing out of members’ pockets, which safe to say would not happen. (And the Company would have to negotiate such a pay cut with the Guild.) We also should clarify: Roughly speaking, the pension fund has about $27 million and pays out to retirees less than half a million. It is not that the fund is any danger of not being able to pay benefits. Federal rules specify how much a pension fund must have to meet its obligations, so if a company was to suddenly go bankrupt, the benefits could still be paid. In other words, the danger is that come 2011, the pension would not have enough money to meet those federal rules. Nevertheless, the shortfall is still a very serious matter and needs to be dealt with. Keep the questions coming.
A New Voice
I have a Quote of the Day feature on my Google home page, and this morning it gave me what seemed like one more very timely piece of advice. This is from former President Gerald Ford; while he’s talking about Big Government, it’s easy to see how it can be applied to Big Business…here it is:
If the government is big enough to give you everything you want, it is big enough to take away everything you have.