After eight months of negotiations, the Washington Post’s union employees have agreed to a contract extension, which will freeze the company’s defined benefit plan, effective August 31.
“We regret to say that (the) Post never budged from its demand to slash retirement benefits,” according to language in a statement from the Washington-Baltimore Newspaper Guild, which represents 860 Post employees.
The terms of the contract also close the company’s cash balance retirement plan to new employees. The Post also agreed to not de-risk pension liabilities by selling the plan’s assets to an insurance company.
Last September, union and non-union employees of the Post were informed that the company was freezing its defined benefit plan and transferring participants to a cash balance plan.
A lump-sum buyout was also offered to retirees and current employees. Information on how many employees accepted the buyout is not available since the Washington Post went private in 2013 when it was bought by Jeff Bezos, Amazon’s founder, and other private equity investors.
In 2012, the Post reported that its defined benefit pension plan was 141 percent funded, with $2.07 billion in assets and $1.47 billion in liabilities.
In lieu of defined benefits, employees are offered a 401(k) plan. According to research on futureadvisor.com, an RIA firm, Vanguard is the service provider to the plan, which offers 25 investment options with an average expense ration of 19 basis points.
The defined contribution plan holds more than $99 million in assets for 2,656 participants. Last year the company match was reduced to 1 percent from 5 percent.
The Newspaper Guild of New York, which represents union employees at The New York Times and Consumer Reports, approved a hybrid defined benefit plan last year, designed by Cheiron Inc., an actuarial firm.
Those plans offer a lifetime defined benefit at retirement that is based off of employees’ contributions. The hybrid plan is designed to limit sponsors’ funding liabilities they experience with defined benefit plans, a primary reason behind the shift from defined benefit to defined contribution plans.
Source: Benefits Pro