UPDATE, 10:06 AM: This may teach The Times to let lawyers make its big announcements. The company’s calling news organizations to clarify that the plan laid out in this morning’s SEC filing is voluntary: Former employees who are fully vested in the pension plan can elect to keep their current payments. That leaves the question: Why would anyone want to accept a lower amount — the assumption behind the company’s claim that this will reduce its obligations? The Times says that some people might prefer a lump sum now so they don’t have to keep track of payments.
PREVIOUS, 6:41 AM: This is “another step the Company is taking to reduce the size of its pension obligations and the volatility in the Company’s overall financial condition,” the New York Times says in an SEC filing this morning. It’s giving a choice to about 5,200 pension plan participants — who account for 15% of the liabilities. (Those total liabilities came to nearly $2B at the end of 2011.) By November 2 they must decide whether they want a one-time payment by year-end that equals the present value of their pension benefit, or accept “a reduced monthly annuity.” As a result of the change, the Times expects to take a charge on its Q4 earnings. The amount will depend on how many people take the lump sum payment, as well as the usual collection of assumptions that determine how much the company might earn and pay from its pension accounts. The Times made its decision before the BBC’s Mark Thompson formally steps in as CEO, due to take place in November. It also follows the company’s $300M sale of About.com to Barry Diller’s IAC/InterActiveCorp. The Times’ stock has appreciated about 25% in 2012.


Hmmm…could this mean the NYT may achieve enlightenment and change its progressive tone? Nah! What could the NYT possibly learn from pension reform?
The Times is saying to past employees who are currently receiving pension payments as agreed that the rules have just changed and forget what we said? (This from the “newspaper of record”?)
We’re all just one trade away from humility, Buddy.
-Marvin, “Wall Street”
Coming from a country where it is illegal to cut pensions and impossible to pay out a lump sum, can someone explain what actually happened here? Isn’t it in the Times best interest to keep the money on the books and earn interest on it over time?
That foregone interest deduction is probably offset by the reduced fees paid to asset/investment managers with smaller amounts of money FYI. This is actually a good thing, and something I hope to see more of in both the private and public sector.
CALPERS alone has $500+ billion in unfunded pension liabilities, and must grow at 7.25% annually to meet them. For CY 2011, the fund (~$232b) grew at 1%. In the new normal of low yields, expect to see more small, but lump sum offerings as funds cannot grow at their expected hurdle rates.
That is really disgusting that NY times would do this. This was a guarateed benefit employees workef hard for…many for years. To take it away or ask them to take a haircut is just wrong. Another perfect example of how individuals take the fall for bad corporate decision making. Disgusting.
While I’m sure they’ve made their share of mistakes, you can’t dump it all on bad corporate decisions by Times management. There’s this new-fnagled thing called the Internet that’s been a massive kick in the nuts to the entire newspaper industry. Papers all over the country are hurting or folding, as newsstand and subscription sales plummet and people expect to go online and get their news for “free.”
Of course they will. They have to find ways to pay the Mark Thompson’s 2 million in bonuses and 3 mill in performance based options.
If I were a NYT employee, I’d jump at the chance to take the present value of my future payout. The question is what the discount rate and life expectancy assumptions are, but if they are at all reasonable (given current interest rate levels, the discount rate should be on the low end of the range), removing the long term bankruptcy/liquidation risk is a golden opportunity.
As Jed notes, the advantage to the pensioners is to get their money now and avoid the possibility that the NYT files bankruptcy some time in the future and the pensions get reduced.
I wonder if the “lump sum” could be rolled into a tax deferred plan such as a Roth, and then protected against future taxes over time. Taking a lump sum would also allow the former employees to leave a legacy to whoever they want (not just spouse), in case they might not live out beyond their actuarial life expectancy, whereas if they die early, the company would just stop paying, and no further benefits would be paid.
The “Movies” tab has become irrelevant, apparently, and thus the whole site suffers – severely.
NY Times pension plan? Huh?
im one of those former employees but i am 30 years away from retirement so if they offer me enough i will just take the cash. My main concern is if i will get penalized 10 percent for early withdraw like they do on 401K plans on top of the 20 percent taken out in taxes.
How long did you work there? I was employed for nine years, but it was over 20 years ago and I cannot remember how the pension plan works.
Any insight would be appreciated.
i worked for them for 15 years until they just recently sold the paper to halifax media…They kept their pension plan a real mystery. You could not access any details of it, it was posted in the vanguard website and all it would show you is a generic monthly payment at retirement. You could always check that site out.
You had to work 10 years to be fully vested. I was there 20 years and will be offered this deal. I like the fact that I can get it now and invest and allow my hiers to get whatever is there when I stop being an earth walker. Problem is – I am sure it will NOT be a sweet deal and they will probably offer much less than it is worth. anything like 4X the annual I would have recieved you can count me in. I could buy a cabin in Vermont and become a recluse.
In 2000 we sat in a meeting warned about adds going to the internet and they laughed at us. from $54 a share to $9 – oh boy!
I also like the fact that I will be offered the money earlier while it can help me the most. I know they will try to take us on the cheap. Hell i hadn’t seen a raise from them in the last 8 years LOL. I have yet to receive the package information with an offer yet. It is supposed to arrive sometime this week. I hope i don’t have to pay that absurd penalty tax like i did on my 401K money. Not sure what the regular taxes are going to be on it but if it is like the other one, im expecting to lose around 25 percent off the top to the government……sigh…LOL
Whoa nelly!! – I am not expecting a CASH payout I could use now. I am expecting
1) a lump sum I would need to roll over to a roth or 401K
2) Monthly annuity now that would need to be deposited in a retirement account.
3) Leave it the way it is an let the NY Times file bancrupcy and take it all.
I am not expecting them to give us cash money to use today. but who knows. I do not need thr cash today – since leaving NY Times in 2001 I earn 3 Times what they paid me.
What a joke – got my package first – they have it different than the records I have from 2001.
115% of current value as lump sum – rolled into IRA or 401k.
Or A car payment for a monthly annuity now -
Who is going to hire all these 60-70 year olds that need to keep working? Will we have Nap rooms? Golf courses will go out of business.
Did you decide if you were going to take the pension offer? If so, which one did you decide to take?
has anyone received their lump sum payments yet? it is dec 17 and i have/received heard nothing.