After paying big bonuses, Lee delays funding pensions
Not that there was any question before, but there should be no question whatsoever about their values now…
Over the weekend, Guild members – active and retirees alike – received a letter from Lee Enterprises about their Pulitzer Pension Plan, which states, “The employer sponsoring your pension plan has made an election permitted under Federal law to delay funding for the plan. The election applies to the plan year beginning on January 1, 2011 and ending on December 31, 2011.
“Without the election, Federal law generally requires that any increase in the amount by which the plan is underfunded for a plan year be paid off over seven years. However, the election allows the increase in the amount by which the plan is underfunded for each of these plan years to be paid off in smaller annual payments over 15 years.”
Such language understandably has caused many to wonder just how secure their pensions are. For the record, pensions of $40,000-plus are protected 100% by the PBGC and I believe that covers all our members. In fact, the Pension Protection Act of 2006 strengthened pension protections and caused financial reporting about their funding levels to change dramatically in 2009 and could explain why we’re learning this. But what also appears to be occurring is that Lee seems to be taking advantage of some delayed -funding mechanism under the law in order to hang onto cash a little longer (gotta find SOME way to pay for those bonuses, right?). Obviously the Guild is disappointed that the employer would delay fully funding pensions – something our members spent a lifetime earning and something that needs to be there for them at the end of their careers – and wishes they wouldn’t engage in such financial sleight-of-hand but they are within their rights, it appears. Nevertheless, the Guild has sent notice to our pension attorneys and we will keep you apprised and advised on events as they occur. If you have any other questions, please do not hesitate to call the Guild Office at 314-241-7046 or contact the shop steward in your department.