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The Association of U S West Retirees
 

 

 

Pioneer Press proposes freeze in pension fund
The St. Paul newspaper would freeze the plan for 450 Newspaper Guild members. By Gregory A. Petterson
Minneapolis Star Tribune
Wednesday, November 8, 2006

The St. Paul Pioneer Press is proposing to freeze pension benefits for its workers in the Minnesota Newspaper Guild Typographical Union to help make up a projected $22 million pension-fund shortfall. The fund, which was sufficient to meet federal requirements last year, is expected to begin running a deficit this year and be $22 million in the red by 2009, according to court documents and the union.

Union lawyer David Krause said he was surprised that the imbalance in the fund "went from zero to millions" in one year.  He said the company has not explained how that happened.

Dominic Cecere, the attorney representing the newspaper, said the imbalance resulted from a "variety of issues," including the age of the workforce and the fund's investment return.

The Newspaper Guild, which represents the 450 workers who would be affected by an indefinite pension freeze, opposes the change.  The company is asking a federal judge in Minneapolis to allow an independent arbitrator to decide the pension-freeze issue.  It wants the matter to be settled through bargaining as part of its labor agreement with the newspaper.  The contract expires in July.

Concerns about pension benefits have become a nagging issue for companies and the workers who depend on them for retirement income.  Experts say spiraling health care costs, a competitive business environment and uncertainty over the future investment climate all contribute to the trend of companies cutting pension benefits and moving to programs in which the employees are responsible for managing and contributing to their retirement accounts.

Companies such as Circuit City, IBM, Sears and Verizon have tried to eliminate traditional pensions, said Andrew Eschtruth, spokesman for the Center for Retirement Research at Boston College.  In most of the cases, said Eschtruth, employers replace a defined-benefit plan, such as the pension for Guild members at the Pioneer Press, with a defined contribution plan, often a 401(k)-type investment that includes company and individual contributions.

The Pioneer Press dispute has been brewing out of public sight for two years.  An annual report by an actuary at the end of 2004 concluded that the Pioneer Press fund would need an infusion of $22 million spread between 2006 and 2009 to maintain federally required funding levels.

The fund has six trustees -- three appointed by the company and three designated by the union, as required by federal law.  In March 2005, the company trustees told the three union representatives that they wanted to address the funding problem by freezing benefits for employees in the Guild.  Retirees and people who have left the company -- whose benefit levels already are set -- would not be affected by the freeze.  A benefit freeze would mean that employees wouldn't accrue further pension benefits for years of service regardless of their continuing employment.  The freeze would not completely resolve the fund shortfall.

The Guild represents newsroom employees and people who work in the advertising, circulation, accounting and information technology departments.  The union also represents the Star Tribune's newsroom reporters, editors and photographers and some people in promotion and circulation.

Krause said the sale of the Pioneer Press to McClatchy Co. and then to Denver-based MediaNews Group Inc. this year had no bearing on the fund balance.  McClatchy Co., based in Sacramento, Calif., owns the Star Tribune.

Attorney Cecere said he expects U.S. District Judge James Rosenbaum, the presiding judge in the case, to rule in the next few weeks.

Gregory A. Patterson 612-673-7287 gpatterson@startribune.com
http://www.startribune.com/535/story/795057.html