Gannett freezes employee pensions

I've never heard money advisers (your Suzie Ormans, Clark Howards, etc.) advise people to include company stock in their 401k. Their argument is, if the company goes south, you put yourself in double jeopardy with both your job and your retirement.

It seems like Gannett is encouraging exactly what the financial advisers are warning against.

Considering the direction Gannett is headed, I'd take my money out of their 401K and find a good Roth IRA. Matching worthless stock is doubling nothing...I'm not saying Gannett stock is going to be worthless, but with the state of newspapers being what it is, would you take that gamble?

 

Just wait until other companies in more precarious financial conditions start raiding employee pensions.

 

Oh, snap. I work for Gannett. Glad I read it here first. wtf?

 

With regard to Guild newsrooms, this is probably a wash because I don't think Gannett was letting represented employees participate in the 401(k) plan. Guild or no guild, relatively few veterans are grandfathered into the much more valuable pension plan that was converted to the new (i.e., fuck 'em) system for just about everybody in 1999.

Represented employees will now get a 401(k), and the 100 percent match on the first 5 percent is reasonably nice -- while it lasts. Remember, boys and girls, that Gannett is under no obligation to maintain that level of match for any amount of time. Best bet is they return to 50 percent of the first 6 percent some time in the next couple of years.

And, by all means, remember to convert the Gannett stock acquired in company match into other investment options every quarter.

 

This is unfortunate for all involved. I guess for those younger members on this board, it would be a good idea to start putting a little money away each month for your own pension. You never know when your company is going to screw you.

 

It's going to great when Gannett pulls an Enron, only it will be members of the press getting effed instead of random folks in Texas. This is going to create a shitstorm of epic proportions if Gannett stock goes the way of JRC.

 

So if I worked for Gannett for a little over a decade and left two years ago, this doesn't affect my pension, right? Man -- pensions are the thing I understand the least.

After my first year in the 401(k) plan I always made sure to reallocate the funds and get rid of the Gannett stock they matched with. Not surprisingly, I did well on that model.

 

Just because you're given matching Gannett stock doesn't mean you have to keep it. As others have said, you should sell most or all of it at the earliest opportunity.

 

And we didn't even mention the $2.5 to $3 BILLION "write-down." (such a nice way to say loss)

 

I've only had a 401K option at the shop where I am and it's family owned, so no company stock is involved.

I'm glad to hear that there's a way out of getting stuck with a bunch of company stock

 

Even when the company tries to encourage you to wait longer before starting monthly pension payments, with the inducement that the check will be bigger at age 65 than at 55, you absolutely need to do the math.

I'm not even eligible to draw a pension yet but when I am, I know that a $600 a month check starting at 55 can be a much better deal than a $1200 monthly check at age 65. If you take that stream of 120 payments of $600 and invest them in mutual funds, you would have a nut of $72,000 of the company's money plus all your earnings on the stream of income over 10 years. Let's say you average 6 percent per year and get the balance up to $98,000. Thank you, compound interest.

Now you can pay yourself $700 per month out of that account, on top of the $600 monthly you'll continue to get from the company. That's $100 more than waiting for their fixed $1200 monthly check. And even as you slowly draw down your $98K, assume you're earning the same 6 percent on it (why not keep it in a stock fund, since your pension and Social Security will serve as your "bond" or fixed investments?).

You'd be able to supplement your lower monthly pension amount with an extra $700, and you'd be able to do it for more than 20 more years before you cross the break-even point. That means you'd be ahead of the game at least until age 85 and -- if you died at any point before then -- you'd have whatever was in that account from the $98K, as opposed to a pension that might simply end with your death. [We have left inflation out of both sides of this debate.]

So don't let the bastards fool you. Waiting for what looks to be a larger amount in absolute terms isn't really a better deal in real dollars. As long as you don't start spending those early checks -- just act like you wouldn't have them anyway, invest them and fund your own better pension, with a cash bonus for whoever survives you!

Class dismissed.