Press proposes freeze in pension fund
The St. Paul newspaper would freeze the plan for 450 Newspaper
Guild members. By Gregory A. Petterson
Minneapolis Star Tribune
Wednesday, November 8, 2006
The St. Paul Pioneer Press is proposing to freeze pension
benefits for its workers in the Minnesota Newspaper Guild
Typographical Union to help make up a projected $22 million
pension-fund shortfall. The fund, which was sufficient to meet
federal requirements last year, is expected to begin running a
deficit this year and be $22 million in the red by 2009,
according to court documents and the union.
Union lawyer David Krause said he was surprised that the
imbalance in the fund "went from zero to millions" in one year.
He said the company has not explained how that happened.
Dominic Cecere, the attorney representing the newspaper, said
the imbalance resulted from a "variety of issues," including the
age of the workforce and the fund's investment return.
The Newspaper Guild, which represents the 450 workers who would
be affected by an indefinite pension freeze, opposes the
change. The company is asking a federal judge in Minneapolis to
allow an independent arbitrator to decide the pension-freeze
issue. It wants the matter to be settled through bargaining as
part of its labor agreement with the newspaper. The contract
expires in July.
Concerns about pension benefits have become a nagging issue for
companies and the workers who depend on them for retirement
income. Experts say spiraling health care costs, a competitive
business environment and uncertainty over the future investment
climate all contribute to the trend of companies cutting pension
benefits and moving to programs in which the employees are
responsible for managing and contributing to their retirement
Companies such as Circuit City, IBM, Sears and Verizon have
tried to eliminate traditional pensions, said Andrew Eschtruth,
spokesman for the Center for Retirement Research at Boston
College. In most of the cases, said Eschtruth, employers
replace a defined-benefit plan, such as the pension for Guild
members at the Pioneer Press, with a defined contribution plan,
often a 401(k)-type investment that includes company and
The Pioneer Press dispute has been brewing out of public sight
for two years. An annual report by an actuary at the end of
2004 concluded that the Pioneer Press fund would need an
infusion of $22 million spread between 2006 and 2009 to maintain
federally required funding levels.
The fund has six trustees -- three appointed by the company and
three designated by the union, as required by federal law. In
March 2005, the company trustees told the three union
representatives that they wanted to address the funding problem
by freezing benefits for employees in the Guild. Retirees and
people who have left the company -- whose benefit levels already
are set -- would not be affected by the freeze. A benefit
freeze would mean that employees wouldn't accrue further pension
benefits for years of service regardless of their continuing
employment. The freeze would not completely resolve the fund
The Guild represents newsroom employees and people who work in
the advertising, circulation, accounting and information
technology departments. The union also represents the Star
Tribune's newsroom reporters, editors and photographers and some
people in promotion and circulation.
Krause said the sale of the Pioneer Press to McClatchy Co. and
then to Denver-based MediaNews Group Inc. this year had no
bearing on the fund balance. McClatchy Co., based in
Sacramento, Calif., owns the Star Tribune.
Attorney Cecere said he expects U.S. District Judge James
Rosenbaum, the presiding judge in the case, to rule in the next
Gregory A. Patterson • 612-673-7287 •