At that point, a young post office employee might have thought, A great pension plan? Where did you forget to sign up?
they didn’t. In 2009, the Post eliminated its pension plan for new employees, and benefits were frozen for those who remained in the plan after Amazon founder Jeff Bezos acquired the paper.
However, the pension fund itself was not frozen.as federal filings show it fat That’s enough to finance 240 exit packages without any actuarial sweat.
On some level, it’s a luxury. The Post could use this kitty to cut salaries without taking severance payments from its news budget. However, there is something of a generational bias in the system, which places younger staff participating in a buyout at a relative disadvantage compared to their more senior colleagues. Relying on this holdover from the rich days of the newspaper business shows the good fortune of being a traditional company, but it also shows the benefits that a current employee lost in his 401(k) days. There are also things.
Stonecipher said the paper would still have “significant losses heading into 2024,” but that’s the amount provided by The New York Times. for $100 million earlier this year. On Monday, Stonesifer introduced William Lewis, the Post’s next permanent publisher and CEO. Mr. Lewis said he supported the acquisition, but made clear that the path to profitability “is not through cutting, but through profit.” It’s through growth. Asked how he would balance his support for acquisitions with his commitment to growth, Lewis said, “We’ll close that chapter and then move forward.”
The Post may have mismanaged the transition to a post-Trump media environment while facing industry-wide challenges such as a decline in news coverage from social media. However, the same cannot be said for their approach to pension finance. 1975 Warren Buffett, the investment wizard sent a note In a letter to Katharine Graham, then CEO of The Washington Post, he outlined a new direction for the company’s pension fund investments. His plan is to drop his advisor, Morgan Guaranty, and accept two small-to-medium-sized investment aces: Luann Cunniff & Goldfarb and First Manhattan.
The Post Office took this advice and steadily expanded its pension fund. By 2007, $1 billion in excess funds had been invested.. By law, post office administrators can use their accounts for benefits to participants (and beneficiaries) and administrative costs, but not for financing business operations. Mr. Bezos did not inherit all of the fund when he acquired the Post in 2013, but the traditional Post transferred sufficient assets An additional $50 million in excess funds is required to meet obligations to employees.
Mr. Bezos has maintained relationships with two stock managers that Mr. Graham’s Post has long trusted, according to the fund’s federal filings.and it is experienced graham level success: At the end of last year, the plan had just over 2,800 participants, $499 million in assets and $245 million in liabilities. “This is an extraordinary overfunding,” said Joshua Gotbaum, a visiting fellow at the Brookings Institution and a former director of the U.S. Pension Benefit Guaranty Corporation.
It’s no wonder, then, that the Post is looking to pension funds to cushion the ongoing troop cuts. Conditions are generous for veterans. For example, an eligible employee with 15 years or more of service will be provided with two years of his base salary and a large amount of her COBRA payments in a retirement account.
The overall picture of Posties, a short-tenured and perhaps younger generation, is characterized by small numbers. Employees with less than 3 years of service and less than 5 years of service will retire with 9 months of base pay and her COBRA support. It’s not stingy at all, but the program’s legality can hinder its appeal. If a buyout-eligible employee under the age of 55 wants to access the lump sum immediately, there will be a 10 percent withdrawal penalty. Contributions to COBRA are subject to similar penalties. “The Post’s acquisition is not as generous as it first appears, and for many, it is less generous than previous acquisitions,” the Post Guild said in a statement. Sarah Kaplan, the guild’s chief steward, added: “We certainly warned people to be careful” about the offer.
While some of the Post’s senior staff may not have to worry about that penalty, some have troubling histories with pension plans. Post run by Bezos since 2014 Suspension of pension benefits Employees who joined the newspaper before their retirement in 2009 are eligible. “Some people literally lost hundreds of thousands of dollars,” recalls Fredrik Kunkle, a Metro reporter and former guild co-president.
Union leaders condemned the move, viewing it as a gratuitous measure. “We see no reason to reduce benefits from a fund with such huge surpluses,” they wrote in a 2015 leaflet. When asked about this issue at a post-town hall in 2016, Bezos said, “It’s important for companies not to take on unlimited debt.” In his new book,clash of forcesFormer Post editor-in-chief Martin Barron elaborated on the conflict, saying it was “unnecessary because the financial stakes were low and the morale costs were high.”
Bezos is not the only corporate leader concerned about “unlimited debt.” Major U.S. companies are waiving their pension obligations en masse, fearing they will run out of cash in the next market crash.among them Latest annual reportthe New York Times cited pension obligations as a risk factor to the business outlook, saying, “The company continues to seek ways to reduce the size and volatility of its pension obligations.”
There are interesting parallels in the Post’s history, but Post leaders are unsure whether their package will induce enough voluntary users to meet their goal of 240 departures. According to sources, the 2008 acquisition cost him nearly $80 million and secured him the signatures of 231 posties. Post annual report.
The 2023 version, which is offered to junior staff without such a large lump-sum payment, could be even cheaper. This is good for bean distributors, as it could help fund future cuts if Lewis & Co. encounters further headwinds. “It’s not a bad incentive to bring in people who will help reduce the company’s salary,” said Kunkle, 62, who is the target of the buyout package. I don’t know if I would let go of a job I love. ”