Guild Pension Update

This special edition of the Guild Facts is devoted entirely to the Guild pension plan and the proposed merger with The Newspaper Guild International Pension Fund (TNGIPF). We will discuss this proposal further and answer members' questions at the Guild's quarterly membership meeting on Thursday, Dec. 6. A merger agreement could come next year and would require the approval of the membership.

WHERE WE ARE
Under the terms of the contract negotiated with the Post-Gazette, Guild members are contributing $591,000 annually to our pension fund through a 2 percent salary diversion and diversion of the night differential, vacation bonus, service bonus, etc.
The PG contributes $75.70 per week per full-time employee, and pro rates the contribution for employees who work fewer than 37.5 hours per week.
The PG contributes additional funds to the pension plan to satisfy the funding requirements, and the Guild pays back those additional through the aforementioned diversions.
As of Jan. 31, 2008, the Guild will owe the PG $2.16 million.
 

WHERE WE'RE GOING
In the quarterly meetings of Sept. 6, Mike Bucsko informed the membership of preliminary merger talks that the Guild had entered into with The Newspaper Guild International Pension Fund, a multiemployer plan.
We continue to hold discussions with that fund's trustees, as does the PG, which has its own concerns. Before we move toward a formal agreement, Guild members will vote on whether to approve the proposed merger. We have two options: To merge with the Guild's international fund or remain as a single-employer plan with the PG. Each option has its advantages and disadvantages, which are outlined below.

A. The Newspaper Guild International Pension Fund
1) Advantages
a. Our accruals, which were frozen on May 1, would begin anew, retroactive to May 1, meaning we would lose no accrual time despite our fund being frozen.
b. The future monthly benefit would be calculated by multiplying $85 by years of service. Example: $85 X 15 years of service = $1,275 monthly benefit. In addition, there are two multipliers that apply to the weekly contribution of $75.70: a 1.15 multiplier on the $50 contribution and a 1.07 multiplier on the $25.70 contribution.
c. Benefits accrued under the PG plan would not be reduced as a result of a merger.
d. If you are vested in the PG plan, you are vested in TNGIPF. The 5-year vesting requirement applies to new hires. In addition, the ceiling of 30 years of service that existed under the PG plan would be raised to 35 years of service.
e. The Pittsburgh Guild local and the company have asked for representation on the TNGIPF board of trustees, giving our membership a voice in the management of the fund.
f. Lower risks, because more companies are involved.
 

2) Disadvantages
a. If the plan were to encounter financial difficulties (a big IF), the payout from the Pension Benefit Guaranty Corp. is much lower than for a single employer plan ($1,071 monthly benefit vs. $4,312.50 maximum benefit).
b. Married workers or those with partners must opt for the reduced 50 percent joint and survivor annuity. Unmarried workers receive a single life annuity (no beneficiary.)
 

B. The PG Plan (single employer plan)

1) Advantages
a. Guild pension committee and executive committee would maintain oversight of the fund.
b. Annual pension benefit up to a maximum of $51,750 guaranteed by the PBGC.
c. Married or those with partners can choose either 50 percent joint and survivor annuity OR single life annuity with 120 certain monthly payments. Unmarried participants get single life annuity with 120 certain monthly payments, and designation of beneficiary.

2) Disadvantages
a. Accruals will be frozen at least until mid-2010 and possibly until mid-2011.
b. The Post-Gazette wants out of the pension business. The company may seek to cash out the plan once it is fully funded, which could harm many of our members and leave future hires with no defined benefit plan.

A final point: There can be no discussion of a company-sponsored 401(k) until we have paid back the company through the diversions. The terms of any 401(k) proposal would have to be negotiated between the Guild and the company.