By: Joe Strupp
As word of spread of Gannett’s plan to freeze its employee pension and increase 401(k) contributions, rank and file workers reacted with a mix of anger and uncertainty Thursday.
Gannett revealed that the move would save the company about $30 million in 2009.
“We have not sold it as a positive, we have sold it as a reality,” Gannett spokeswoman Tara Connell told E&P a day after the announcement came out. “It allows us to save money and improve the 401(k), which is what employees have told us they want.”
But the mood among newsroom staffers who spoke with E&P was not good. While many declined to comment at all, those who did speak up were bracing for the worst.
“Everybody was, first of all, shocked, then disgruntled to find out the pension was frozen,” said Terri Sanginiti, a 12-year reporter at The News Journal in Wilmington, Del. “That was one of the perks of the job. It just came out of left field, at the end of the day.”
Sanginiti was referring to Wednesday’s memo from Gannett CEO Craig Dubow, first revealed by E&P, that stated the pension fund would be frozen as of Aug. 1. It said that the company would save $90 million in the first year, with $60 million of that transferred to the 401(k) plan. The company would increase its matching 401(k) contribution from 50 cents worth of stock for each employee dollar to $1 of stock for each.
“The process of transforming the company has been ongoing and in that process we are looking at virtually everything we do and how we do things,” Connell said about the decision behind the change. “We look at growing the top line, but also containing expenses.”
But for some staffers, the move is a slap in the face to employees. “It is sad to see that the largest newspaper company in North America is treating its employees so shabbily,” said Lou Mleczko, president of the Newspaper Guild of Detroit, whose members include those at the Gannett-owned Detroit Free Press. “They can afford to maintain this [pension] plan, it is not an expensive plan. It is an abandonment of their own employees.”
Under its current contract, the Detroit guild is not immediately affected by the change, having a union-controlled pension plan as part of its agreement. But when that contract ends in 2010, it will likely be an issue.
“I hope it won?t, because the plan is doing so great,” Mleczko said.
At The Indianapolis Star, guild leader Abe Aamidor said his members are unsure how the move affects their pension, which had previously been under control of former Star owners, the Pulliam family. “There is concern, but not panic,” said Aamidor, president of the Indianapolis Newspaper Guild and a 21-year Star employee. “There is a lot of confusion among the employees. Some are asking what will happen.”
Aamidor said, at first glance, the increased 401(k) match does not equal the lost pension contributions: “It doesn’t balance out and the company admits that. It is a big deal — you will lose 10% to 20% depending on how long you have worked here.”
Then there are those like Laura Ruane of The News-Press in Fort Myers, Fla., who say the reality is that it is out of their control. “There is nothing you can do about it, it puts more responsibility on us to decide what [investment] mix to use,” she said. “It beats them pulling out entirely.”
On a popular “independent” blog about Gannett, dozens of anonymous comments have been posted about the pension freeze, with few if any in favor of it. “Love the spin on the ‘improved’ 401(k) … giving employees a dollar of stock for every dollar contributed (instead of the current 50 cents),” one poster wrote. “Improved? With the stock price nearing decade and all-time lows?”