UPDATE 2-NY Times moves to cut pension liabilities
* Offer to 5,200 former employees
* Represents 15 pct of pension liabilities of $1.99 bln
* Expects to record a noncash settlement charge in Q4
Sept 14 (Reuters) - The New York Times Co is offering some of its former employees a new payment option in an effort to reduce pension liabilities, the company said in a regulatory filing on Friday.
Pensions are a significant issue facing newspapers as the industry deals with a severe drop in revenue from advertising. At the same time publishers are responsible for funding retirement plans for its swelling ranks of past employees as well as current staffers.
The New York Times is putting on the table a choice between a one-time lump payment or a lower monthly annuity targeted at 5,200 former employees. The qualifying former staffers represent about 15 percent of the company's pension plan liabilities, which stood at about $1.99 billion as of Dec. 25, the filing said.
"This offer is another step the company is taking to reduce the size of its pension obligations and the volatility in the company's overall financial condition," the company said in the filing.
The pensions are underfunded by about $500 million.
The New York Times, which publishes its namesake newspaper and the Boston Globe, has been shedding properties over the past several years to streamline operations and shore up cash reserves. It used to be a sprawling media conglomerate with holdings in cable networks and sports teams like the Boston Red Sox and Liverpool soccer club, and also owned broadcast TV stations, magazines and a slew of newspapers throughout the United States.
In the most recent example, it sold About.com for $300 million last month to Barry Diller's IAC-owned Ask.com.
The New York Times is also currently engaged in a tense talks with the Newspaper Guild, which represents newsroom employees, over a new contract. One of the sticking points involves the company's pension plan.
In the offer announced on Friday, the one-time lump sum payment would equal the present value of a pensioner's benefit, payable in cash or rolled over into a qualified retirement plan or individual retirement account.
The company expects to record a noncash settlement charge in the fourth quarter of 2012.
Shares of the company were up 2 percent at $9.85 in morning trading on Friday.
- Tweet this
- Share this
- Digg this
- Wall St Week Ahead - Fed change unlikely to blunt equities' appeal over bonds
- UPDATE 3-Heineken confirms, rebuffs SABMiller bid
- Islamic State executes eight Sunnis in northern Iraq
- NATO countries have begun arms deliveries to Ukraine - defence minister
- British queen urges Scots to 'think carefully' on independence vote