The Guild and the Company continue to discuss the proposed buyout. The union is examining data on how it could affect employees’ retirement.
Late Friday, Publisher George Hearst responded to the Guild’s proposal with a few changes. He said he would accept including a calculation of differentials in what an employee normally receives as part of the buyout. He agreed to extend the offer beyond editorial, though he cautions people in other departments, especially advertising, were not likely to get it.
Hearst also said he’d agree to keep the employee share of health-care costs at 21 percent for those taking the buyout. But he also balked at paying those who decline insurance half the premium, a standard in previous buyouts.
A central issue in the Guild’s discussion is the large number of editorial employees who are at the age where they could consider taking early retirement. For some workers, taking a buyout would cut sharply into their pensions, making them reluctant to do so.
The union originally proposed eliminating both the one-year cap on the buyout and the early retirement penalty. Understanding that changing the early retirement penalty requires amending the pension plan, the union is now looking at other options for sweetening the deal in a way to make it more palatable for senior employees.
Anyone who might want to consider the buyout should ask Carole Hess in the Human Resources office to have their pension payout calculated. The formula is your five highest consecutive salaries times your credited years of service times .015. We caution you against making the calculation yourself for retirement planning purposes. You should make sure you get accurate, official numbers.
For a 55-year-old with 29 years’ experience, the full pension at 65 would be $21,750 a year. The two available options to retire at that age in 2012 would mean a choice between backdating the years of service to 2006, which would set the payment at $17,250 or cutting the pension in half for a payment of $10,875.
Obviously the first option is better, but it still means that retiring early would cut the annual pension by $4,500. Over 10 years, that’s a $45,000 loss in income, and that loss would continue each year of the employee’s life.
These numbers are our rough estimates and not official calculations, but we show them to you for illustrative purposes.