The $200 Million Mystery

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First, many thanks to the 480 employees – a fantastic number — who signed the petition demanding that publisher Fred Ryan offer workers a fair contract. Your passion is making a difference.

But we must do more. Urgently.

The Post has signaled that it is closer than ever to a take-or-leave-it position. Among other things, the company continues to insist on cutting severance pay in half. And the Post is still trying to cut health-care benefits for part-timers – a cost to the company of $35,000 a year – unless the Guild agrees to the company’s pension and wage proposals.

In fact, we have arrived at a moment where we can truly see how absurd – and mysterious – our new owner’s position is. Amazon founder and multibillionaire Jeff Bezos is insisting on slashing retirement benefits although he has absolutely no need to do so. The pension fund is wildly overfunded, and by law it can only be used for retirement benefits.

We sense that it’s a pure power play, and that management’s fundamental belief is that it should be able to do whatever it wants, whenever it wants, without resistance from the people who work here. And although the Post wants to make this look like something that affects only older employees, or that it’s just about retirement, the truth is, we have come to the big reveal about Bezos and what he has in store for everyone, especially younger employees.

That’s because, if the Post can do such a radical and unfair thing now, imagine what it will do to you in the future. The Guild has already shifted its fight to protect young employees – and the Post is resisting more than ever.

Here’s the deal: The pension has about $371 million in assets and $169 million in liabilities. This is an astounding surplus — virtually unknown in modern American business. There is no conceivable reason to cut benefits from a fund so hugely overfunded.

The company has never offered a reason, either. We hear vague talk about limiting long-term liability due to market fluctuations. But the most likely scenario is that this nearly $202 million surplus will keep growing, its assets steadily outpacing liabilities, until doomsday. What’s more, the company is currently invested aggressively in the stock market – 85 percent in risky equities – as if the company feels some feverish need to boost its stash even more.

We ask you, Mr. Bezos: Why?

Why on earth are you insisting on cutting retirement benefits when you’re sitting on a Scrooge McDuck-sized pile of cash? Why have you shot down every compromise offered by the union if there is zero risk that the company will ever have to use operating earnings to contribute to it?
According to experts with Cheiron, the financial firm that has helped us try to meet the Post halfway on retirement plans, here are some theories about what Bezos could do with that pile of money:

• Bezos could buy another company whose pension fund is underfunded and use the Post’s overfunded pension to shore it up – thereby lowering the overall purchase price of the target company. It could be another media company or an aerospace corporation – who knows? There are dozens of companies whose pension funds are in bad shape.

• Bezos could sell off his pension liabilities to an insurance company that would then be responsible for paying out pension benefits to all participants for the rest of their lives. To assume such risk, an insurance company charges a premium, but the Post removes a big liability from its books. That’s useful if Bezos should want to sell the Post at some point. For us, it adds more risk because we would lose the federal guarantee of life-long pension payouts, no matter what.

• Bezos could try to take the tax-free money back out. But this is the most unlikely scenario because he would have to pay a huge amount in taxes on that money. Our analysts say it would almost be dollar for dollar, and so it’s unlikely this is what he’s thinking.

We have made three compromise pension proposals, each crafted to address management’s stated concerns about potential long-term liability. Our most recent offer accepted management’s structure for pensions. The traditional pension would be frozen: a major concession from the Guild. Everyone would go into the Cash Balance pension plan. However, we also proposed a change in the formulas used for calculating benefits.

This would still allow the Post’s long-term liabilities to drop, but it would also improve retirement benefits for everyone compared to the Post’s proposal. It would particularly benefit our younger, newer workers, the ones hired since 2009. We are also fighting to extend the Cash Balance pension to all future employees.

Management’s response? “No.” And “no” again. The company’s latest bulletin preposterously claims that our proposal would increase the company’s liabilities. Our numbers show otherwise. The management assertion seems to be a novel interpretation of the data that has escaped our professional actuaries.

Management also keeps saying that its pension proposal affects only about half the employees in the Guild-covered unit. But watch out. If management gets its way by treating all future employees as third-class citizens who will get neither the traditional nor the Cash Balance pension, you can be sure that the next time we bargain, the company will say, “If having no pension is good enough for these newcomers, why isn’t that good enough for everyone?” And why should we think the Post will be less ruthless two years from now?

In fact, the Post is now claiming it has run out of options. Under U.S. labor law – which is slanted toward the powers that be, not unions – the company has the right to impose its last best offer in the event of a good-faith impasse.

The situation is urgent. We are calling on everyone to join us Friday May 15 for an open, all-hands-on deck discussion about next steps. We will discuss all options open to us. There will be three meetings at 12:30 p.m., 1:30 p.m. and 7:00 p.m. And if you haven’t joined the Guild, please do so now — and sign a friend.

The Guild Bargaining Committee

Rick Ehrmann’s May 18 report to WBNG Executive Council

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The Post has relented on health coverage for part-timers working less than 30 hours per week and upped their wage offer to 2% in year one and 1.5% in year two, but only if we accept their pension proposal. Members debated what is to be done in four membership meetings on Friday, May 15, and Saturday, May 16.

Guild Fights to Maintain Health Coverage

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Still Waiting on Management’s First Wage Proposal

In the latest bargaining session with the Washington Post, Guild negotiators were joined by staff writer Amy Goldstein, a union member who is one of the paper’s experts on the recent federal health care law. She gave a deeply researched presentation about the company’s proposal to stop offering health insurance to part-time employees who work fewer than 30 hours a week.

The company has argued, remarkably, that this would be a benefit for part-timers. The company, citing a single outside study by Price Waterhouse Cooper, claimed part-timers could find better deals on the insurance exchanges set up under the Affordable Care Act because they might receive government subsidies they could not get if the Post offers them insurance.

Amy dissected this argument point by point, making clear that the Post’s proposal would take us down a dangerous road. Here’s why:

1. The Price Waterhouse Cooper study is shallow, because it compares insurance premiums but doesn’t look at the total costs (“actuarial equivalent”) to the consumer – including deductibles, co-payments, access to drugs, choice of doctors, etc.

2. The ACA was not created to enable large employers like The Post to drop coverage for some employees and let them fend for themselves on insurance exchanges. The ACA was designed to help small businesses and individuals without insurance who could not afford coverage in the private market. Dumping employees wholesale on the exchanges would be bad for the nation’s health- care system.

3. The Post says that only a handful of part-timers take advantage of its insurance coverage. But that also means they cannot be a huge cost to the company. Amy further pointed out that this number could change in the future, especially given the dynamic nature of the industry. It’s not clear whether the ACA’s subsidies will survive the latest Supreme Court challenge. And there is political pressure to change the law itself by altering the definition of full-time work, which under ACA is currently 30 hours per week but could be pushed to 35 or even 40. If that happened, The Post might be tempted in future contracts to raise its own definition to the higher number. As Amy put it, “Once you set a precedent that some employees are not entitled to health insurance, it becomes easier to redraw the line as to how many would be left out.”

4. The Post’s proposal is ill-timed for another reason: Health care inflation has slowed dramatically in recent years. “It’s not as if the company is incurring a big hit in health care expenses by continuing to do the civilized thing that is best for employees and best for the health care system by offering offer insurance to all its workers,” she said.

The Guild also presented the views of a part-timer who examined what it would cost to replace her current policy with one from a local exchange. If she had to obtain a policy under Obamacare, she would incur additional annual costs of more than $7,200. She also noted that she and several other part-timers are young women who cut back salaried work to be with young children. “Abolishing our health insurance would be an incredibly un-family-friendly policy and would unfairly target women,” she writes.

Just to be clear: The Company talks of shifting part-time workers to the exchanges with little regard for what would happen to workers who are dumped from The Post’s insurance plan. And although only a fraction of the Post’s 70 part-time employees who are eligible for this coverage actually enroll, it is a potential benefit that they may want or need to take advantage of it should their personal circumstances change.

But here’s what’s even more disturbing about the Post’s health care proposals. The Post also sought the explicit right to terminate – that is the exact word used three times in the proposal – everyone’s health insurance. You read that right. Although the contract already allows the company to alter health care provisions, management wanted the ability to kill the entire health package altogether.

We are pleased to report that our objections persuaded the management team to withdraw their proposal on the right to terminate everyone’s health care insurance. We hope they will see the light on part-timers now too.

We cannot thank Amy enough for stepping up, along with other staffers who helped us analyze and respond to the company’s proposals. We look forward to making progress on a long list of other outstanding issues, including proposed changes to the pension plan, severance pay, job protection, union security, and wages. We continue to await the Company’s wage proposal.

–The Bargaining Committee (Joel Achenbach, Patricia “Pat” Jacob, Freddy Kunkle, Stephen “Rocky” Richardson and Timothy Smith)

Post Guild’s ‘Crowd-Sourcing’ Request From the Guild’s Bargaining Committee

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First, we want to thank everyone who has responded on the Post’s proposal to have the option of ending health care insurance coverage for part-time workers. We plan to discuss this at the table Nov. 12, so there is still time if you would like to chime in.

Second, we want to reiterate our call to you to please join the union now if you haven’t already. Especially now that the Guild leadership and members of the bargaining table are engaged in talks, writing bulletins, analyzing company positions, we need people to do the right thing and step up to join as dues-paying members — and more than ever, we need those of you who are on our team to speak up and encourage your friends to do the same. It’s a good and honorable cause. It’s okay to talk to people about it.

Finally, we’re wondering: can you help us pinpoint examples of Post jobs that have been created or filled without the company advertising that those positions were open? The Post is required to post notices of vacancies or newly created positions, and first consideration for them is supposed to go to existing employees. We have been alerted to instances where this apparently has not happened.

If you can think of examples where jobs were created or filled without proper notices, please email Freddy Kunkle (goldstraw@comcast.net), fellow co-chair, commercial, Rocky Richardson (RichardsonStephen123@hotmail.com) or Guild staff rep Rick Ehrmann (rehrmann@wbng.org).