I seek advice from my brothers and sisters in Gannett-land, especially those who have left the company voluntarily or otherwise in the past two or three years. I know many of you personally and wish I did not have to post anonymously, but circumstances dictate otherwise. You are good folks and I've enjoyed our relationship. I am very sorry to see what is going on at many of your newspapers.
I am a manager in another media company that is cutting staff through attrition and layoffs.I don't know whether I would be one of those let go. I'm a good worker and have worked to expand my skills and take on new responsibilities. But I know there are times when that is not enough. I am in my upper 50s and have been with this company 30 years. Right now, I feel a huge target on my back.
In the event I am on someone's "disposable" list, before I get called into an office and asked to sign papers I would like to be prepared. For those of you who have been through this before, what advice would you give? What things do I need to know going in regarding my rights? Entitlement to my pension? 401(k) plan? If I can, should I be taking steps to protect those two programs (pension and 401(k)) now?
As a management employee we worked without a contract, although the company generally gave us the benefits of the union agreements covering a portion of the company's workforce plus some additional enhancements. Do I need to be aware of the current and post union contracts going in?I have thought about getting the advice of an employment lawyer in the state in which I work. Did anyone else do that?
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[Image: today's Detroit Free Press and Detroit News, Newseum. Blog readers say the Gannett-controlled Detroit Media Partnership just laid off about 100 employees; that joint operating agency publishes the Freep and the News. The Freep is one of Gannett's 85 dailies in the U.S. dailies, and 17 in the United Kingdom]
It's hard to prepare, but make sure all the paperwork is in order ... you may have many options regarding 401(k) and pension. For 401(k), determine if you want to roll it over to your own rollover IRA account, or leave it with your company's plan administrator. There are exceptions, but generally, if you touch it, you owe taxes on it, maybe even a penalty if under 59-1/2 -although there are ways around that. Parallel situation with distribution of a defined pension benefit plan, but you may already have signed something long ago saying you want an annuity vs. a lump sum rollover - read your paperwork.
ReplyDeleteIf you're over 55, you'll just be taxed, not penalized, for accepting defined pension payouts.
(This is all a little simplified -- the company is supposed to supply you with all the pension information, options and forms. Gannett took a little longer than promised but did provide the proper documentation. I'm a December layoff. And Hewitt, for the 401(k) seems like it will be fine.)
one addendum: You may feel in better control of your fate if you take a lump sum pension distribution vs. worrying if the company will properly fund future pensions. Again, if you do a direct IRA rollover, no tax at this time -- but you may be tying up your money for a few years.
ReplyDeleteHaving gone through this, a few pointers. It is difficult to give you advice with the sparse sort of information you provide, so this is in generalities.
ReplyDeleteMost pension and 401K plans are protected. If you are vested, you are entitled to get benefits. Vesting rules vary, but generally after 5 or 10 years you are vested. Most pension plans allow you to take an early retirement. You should think of this in the event the hammer falls. You will take a reduced payment for retiring before 62, and the rate is generally a 5 percent reduction in your monthly pension payment FOR EACH YEAR you are under 62. That means if you are 58, you will get 80 percent of your pension payment. That might make it worthwhile to wait until you are 62 before drawing a pension, but I do not know your circumstances.
You can tranform your 401K into an annuity. There are annuity calculators online where you can see what this means. I concluded the rule of thumb was about $1,000 a month for every $100,000, which is a really lousy amount, but it does last your lifetime. You can get Social Security early retirement at 62, but at half of the monthly payment than you would get at 66 1/2.
When you are separated, you will need to continue your health plan. Under a federal law called Cobra, companies can offer to continue your health plan if you pick up the company's side of the monthly payments. You have to arrange this BEFORE YOU LEAVE your employment, and the payments are hefty -- $400 a month for single. AARP has some alternative health plans it offers.
You need to face the fact that for anyone over 39 in this business, there is no future in newspapers. Yes, it is unfair, but it is true. Yes, there are exceptions of people who get another job easily, but they are few. Newspapers today want young people savvy with technology and older people are going to be a drain on their pension plans sooner than younger employees. I thought about the lawyer, but didn't bother. If you have evidence of age discrimination, you might consult a lawyer, but it is difficult and doubtful it can get your job back. The company can always counter that it makes decisions on economic grounds, and as everyone knows the economy sucks.
Good luck.
Not all employers allow lump sum distributions of their pension program. There is no uniform rule. You need to know what the rules are for your company's pension plan. There usually is a pension administrator somewhere in human resources.
ReplyDeleteAlso, many pension plans are protected in name only. They are underfunded and although there is government insurance on them if they collapse, that insurance will not make you whole. If you can roll out your pension into an IRA, I would highly recommend that option.
ReplyDeleteYour 401K should be fine if it's with any of the major 401K providers -- it's off limits from the company -- but again, you may wish to consider rolling it into an IRA, which will give you far more flexibility in how to invest your money.
I think, given your age and your situation, you would be well-advised to consult a financial pro.
For those of us that worked at a JOA and the pension is held by the partnership, not sure how that is different for us? I was told you could get the lump sum only if the value of the pension was under $5K. Otherwise, you had to wait til retirment age to start getting it, or roll it over. Anyone from a JOA that has been thru this?
ReplyDeleteI left "voluntarily" in 2005 after nearly 30 years. A friend in HR suggested it when she heard of plans on letting me go...with no buyout. It turned out to be the best thing I could have done. As the others here have attested, make sure you read your pension options carefully. Mine didn't allow a lump sum withdrawal until age 60 and I was only 48 at the time.
ReplyDeleteAs far as your 401k, I found rolling it over into an IRA was my best option...and the economy proved that out in the end.
A bought-out journalist has compiled a "Journalists' Survival Guide that should be consulted.
ReplyDeletePart I is before the ax falls.
And Part II is for what comes after.
These are two very good and comprehensive resources covering some of the suggestions advised above.
12:11 PM: Much of your information is no longer correct for Gannett employees.
ReplyDelete1) Gannett's pension is now a fixed payout that will only increase in value by a small (1-2%) annual cost of living adjustment. I departed Gannett after 15 years a short while ago and my payout was $X (I am 40 years old). If I stayed another 25 years, my payout would have only increased by whatever the annual COLA was.
There was no reduction in my payout because I was 40, other than the COLA.
There is no pension to draw on - you simply get a check.
2) DO NOT transform your 401(K) into an annuity!!! Roll it over into an IRA or your next employer's 401K if they allow that (mine did).
3) You don't have to arrange for COBRA before you leave, though that might make you feel better. After you depart, you will be sent the COBRA forms and as long as you pay the premium, everything will be covered retroactively.