Trustees for the CWA/ITU Negotiated Pension Plan have directed the NPP to take several actions to keep the plan actuarially sound in the face of continued declines in capital markets. Among the steps announced by the Trustees in a letter to all plan stakeholders dated April 9, 2009, were:
- A change in the calculation of future benefits payments. Beginning with contributions made on May 1, 2009, benefit payments will be calculated on the basis of 1.0%, down from the previous rate of 2.5%. The Trustees stressed that his move does not affect any benefit calculations on contributions made prior to May 1, 2009, nor does it affect any pensions currently being paid.
- As of May 1, 2009, the NPP will no longer pay withdrawal benefits, lump sum disability benefits, or certain lump sum death benefits.
- Disability award pension payments will not be paid to participants who have been awarded a Social Security Disability pension with a date of entitlement on or after May 1, 2009. However vested participants who have been awarded Social Security disability benefits, could be eligible for an early pension even if they lack the 20 years of service credit normally required for an early pension.
These and other administrative changes in the Fund are expected to produce $17.9 million in savings in the current year, and annual savings of $10.2 million thereafter.
All NPP participants and contributing employers will receive a package of materials explaining the changes in detail, along with an Annual Funding Notice and a report on projections for the Fund for January 1, 2009 and beyond.
As of the end of 2008, the worldwide recession had destroyed more than $5 trillion in wealth held by pension funds and individuals invested in 401(k)s and similar savings plans. About half that total was lost in the U.S. CALPERS, the California state retirement plan, the largest in the nation, lost $74 billion in 2008.
Looking at the global costs helps put the picture for the CWA/ITU Negotiated Pension Plan into perspective. Trustees for the NPP, in a series of recent meetings, have been monitoring the effects of the dramatic declines in capital markets on the fund’s bottom line. The April 9 letter to all stakeholders in the plan—retirees, beneficiaries, working members and employers currently contributing to the plan and others—noted that the NPP “has not been spared as its investments had an overall negative return of –26% for the year.”
The NPP’s declines have not been as dramatic as those of many leading indexes—S&P is down 37% for the year, and it dropped another 18% through February 2009, for instance. Despite a strongly disciplined investment philosophy, the Trustees pointed out, diversification has not adequately shielded the fund against the current economic firestorm.
The changes in benefits and policies directed by the Trustees are designed to protect the Fund in calendar year 2009. The Trustees stressed that the reduction in future benefit calculations will not affect pensions based on contributions prior to May 1, 2009.
Other changes will also affect disability retirements and lump sum benefits after May 1, 2009.
For further information, the Summary Plan Description on the Plan’s website at www.cwaitu.com has been revised for these benefit changes. Or you can contact the Plan Office at 831 S. Nevada Ave., Ste. 120, Colorado Springs, CO 80903 or (719) 473-3862.
Martin Dillon STEPPING DOWN
Martin Dillon, a 24-year member of the CWA/ITU Negotiated Pension Plan, has stepped down from the Plan’s Board of Trustees. The departure of Dillon, who has served as the Board’s secretary for the past 11 years, puts the Board back into balance—with three employer members and three union representatives. Trustees voted to pare the numbers back to six as part of the NPP’s overall cost cutting plan. Dillon was honored with the PPMWS Julius Briskie award in 2001.
News Business Flounders in Sea of Red Ink
Stakeholders Search for New Models
What do bankers, brokers, auto makers and homeowners have in common? They’re all in line for billions of dollars in bail out money from the federal government, but not the news business.
Until recently, no one outside the news industry seemed to think it’s worth saving. The thousands of non-union workers who have already lost their jobs…or soon will…or could…are virtually on their own. The pay cuts, furloughs and other contract concessions confronting union members in the news media are painful medicine and may not be the last “sacrifices” these workers and their families will have to swallow.
In late March, Sen. Ben Cardin (D-MD) made the first congressional move to address the problem with a bill that would allow alternative ownership for newspapers, specifically as tax-exempt non-profits. Papers that adopt that form of ownership would be prohibited from making political endorsements, but would not be otherwise constrained. House Speaker Nancy Pelosi has requested that the Justice Department review its anti-trust regulations as they relate to newspaper Joint Operating Agreements and Attorney General Eric Holder agreed to look into it.
In an article in The Nation magazine, Robert McCheseny and John Nichols propose a multi-part journalism economic stimulus package. They call for all Americans to receive an annual tax credit for the first $200 they spend on daily newspapers; free postage for many periodicals; government funding for high school and college journalism projects; and a large expansion of funding for public and community broadcasting.
Psst! Wanna Buy a Newspaper?
The Guild Reporter recently pointed out that as of January 30, 2009, the value of the entire newspaper industry is less than the total debt carried by the now bankrupt Tribune Company. “[T]heoretically, you could own 264 U.S. dailies for less than $1.4 billion; add another $715 million, for a total of $2.1 billion, and you could own the New York Times empire. It was just three years ago that McClatchy shelled out $4.5 billion for the Knight Ridder chain of 32 dailies, then turned around and unloaded eight of its new acquisitions for…$2.1 billion.”
