The Next Pension Crisis

Talks between the Newspaper Guild of New York and the New York Times have been heated. In late March, the union forced the paper to drop its proposal to extend the workweek at the Times to 40 hours​—​any work over 35 hours and the paper has to pay overtime. The Times’s management bitterly noted that the shorter workweek costs real money and that “eight-hour days are the norm .  .  . in much of the world outside The Times.”

Following on the heels of this victory, the guild set its sights on another management proposal: transitioning workers out of a traditional pension plan and into a defined contribution plan, such as a 401(k). Again, this is now the norm in much of the world outside the Times, but the union is having none of it. On April 18, New York Times guild members began circulating a YouTube video featuring some of the paper’s most senior staff excoriating Times publisher Arthur O. Sulzberger Jr. and “corporate management.” The pension move is an affront because “we’ve already been investing in helping save the paper,” said Times columnist Jim Dwyer.
If the guild has been helping the paper out of its dire financial straits, their pension plan doesn’t reflect that. According to the paper’s last annual report, the company pension plans are $522 million underfunded and have enough money to cover only 77 percent of the plans’ liabilities. The federal government considers pension funds endangered if they are less than 80 percent funded, and 65 percent funding is the threshold below which the government declares a pension plan to be in “critical status.” That’s the point at which a fund is likely to go into an accounting tailspin and never be able to cover its obligations.

Read more: http://www.weeklystandard.com/articles/next-pension-crisis_642190.html