The Minneapolis/St. Paul Star Tribune reports that the push by the newspaper to freeze the benefits of its union members – which are opposed to the action – is an effort to make up a fund deficit that is predicted to reach $22 million by 2009. The predicted shortfall stems from poor investment returns and the age of the workforce, according to Dominic Cecere, the attorney representing the newspaper.
Company appointed trustees told the three union appointed trustees in March 2005 they wanted to address the funding problem by freezing benefits for employees in the guild, which represents newsroom employees, and those working in advertising, circulation, accounting and information technology companies. The union also represents the Star Tribune’s newsroom reporters, editors and photographers and some people in promotion and circulation, according to the newspaper.
The company has asked a federal judge in Minneapolis to allow an independent arbitrator to decide on the issue of freezing the pension, which it wants settled during bargaining on its labor agreement with the union that expires in July 2007.
Pension freezes have become a trend, as many companies are shifting focus to defined contribution retirement plan offerings in an effort to cut costs. Citigroup was a recent addition to the long line of companies participating in the trend, announcing its intention to freeze its pension plan effective in 2008 (See Citigroup to Freeze Pension ).