Facing a funding gap of about $100 million, the Tampa Bay Times is turning its employee pension fund over to the Pension Benefit Guaranty Corp., a federal agency that insures the benefits of retirees from companies that are struggling to make their required contributions.
Letters announcing the change were mailed to pension members late last week.
The Times Publishing Co. Pension Plan covers approximately 3,300 retirees, beneficiaries and employees, all of whom were hired before the plan was frozen in 2005. The Times has made all of its pension payments to date, Times Publishing Co. president Conan Gallaty said.
The fund’s current assets are about $95 million, which is enough to cover several years of payments, but less than half the amount needed to fund potential future obligations.
“The long-term plan had been to continue to support the pension obligations as much as we could,” Gallaty said. “But the nature of the publishing business has clarified itself, and that’s made trying to support it ourselves very challenging. From the beginning of the pension plan, this was never the end game. But I will say that it is a good result for us, because things have changed, and it allows us to really focus on building our digital future.”
The Times isn’t the first media company to turn its pension plan over to the federal agency. During bankruptcy proceedings last year, newspaper chain McClatchy handed over its nearly $1.4 billion plan, less than half of which it had funded. The agency has also intervened in pension-funding shortfalls involving Gannett and the Tribune Co.
The agency insures benefits for 33 million pensioners in around 25,260 plans. Last year it paid benefits to more than 900,000 pensioners in the nearly 5,000 plans it actively controls.
In the past five years, the Pension Benefit Guaranty Corp. placed a half-dozen liens worth about $100 million on properties owned by the Times and its owner, the Poynter Institute for Media Studies, records show.
In August, the Times sold its St. Petersburg printing plant and surrounding properties for $21 million. A portion of those proceeds went directly into the pension fund, Gallaty said, with the rest helping to pay down debt.
The Times and the Pension Benefit Guaranty Corp. will negotiate a settlement on the remaining liens and any ongoing contributions to support the plan.
Gallaty said most Times pensioners should expect no changes to their benefits. The agency does have a statutory cap on annual payments; this year it’s $72,409 for a 65-year-old member, which is “much higher than any pensioner typically gets,” Gallaty said.