Now the talks hinge on pensions, and the AP is refusing to budge on plans for a “pension freeze.” Staffers hired by AP since 2006 work under a defined contribution plan into which AP puts 3 percent of an employee’s salary annually. Management wants to transition employees hired before 2006 onto the same plan, moving them from a defined benefit plan, where the AP assumes most of the risk on investments, to a defined contribution plan, where employees assume the bulk of the risk.
In the leaked memo, AP said it would “ease the transition from one plan to the other” by making “additional contributions of 1 or 2 percent of salary per year—depending on the employee’s length of service—for seven years.” Adds the memo: “That’s an increase of two years from the transition period that had been proposed originally.”
Linda Johnson, the Guild’s mobilizer and an AP business reporter who covers the pharmaceutical industry, says the AP’s claim that a pension freeze is essential is disingenuous. A guildswoman to the core—she even has bright red hair!—Johnson was busy handing out signs and leading chants on rally day, but I spoke with her about the negotiations Monday. The union put forward a proposal last month for an alternative pension plan, which Johnson describes as “a very innovative compromise pension,” that would cover everyone—including new hires—and remove most of the AP’s risk. Rather than determining AP’s contributions based on the market performance of investments in the fund, the proposed fixed cost plan would see management negotiate with employees on a fixed amount that would go in each year; the amount of an employee’s salary that goes in would be determined by factors such as how much they were earning and what was in the pool for that year. The rate at which benefits accrue each year would match market conditions.
It’s complicated. But never matter, the proposal was rejected last month.
Guild president Tony Winton, who has been involved in the negotiations and who was busy in the latest round while the rally was taking place, says the proposal went a long way to addressing AP’s concerns that the current plan’s ties to market conditions made it unpredictable and volatile.
“We don’t get it,” says Winton. “We made a proposal that we thought addressed AP’s needs as they stated them earlier in the bargaining. We have fewer reporters and new workers working harder because of the layoffs. We had a two-year wage freeze. We accepted reductions in the medical coverage to make the plan more efficient. We don’t see the rubber meeting the road.”
“They want to freeze the pension,” Johnson says bluntly. “They have come up with one excuse after another—most of them bogus—and every time we address their issue, they say, ‘Well, we have this problem.’ Last time they said if they keep the pension it would hurt their ability to borrow. First of all, AP is almost debt free, unlike other news organizations. Second of all, they’ve had a pension for years and always been able to borrow. They are just throwing out any kind of ‘BS’ they can come up with.”
Most members of the AP Board of Directors are heads of newspaper groups—among them the vice chairman of the New York Times Company and the president of Gannett—and, claims Johnson, “they have basically been pushing the AP to inflict the same pain in the staff that they’ve had to.” Whether that’s true or not, there is likely to be some pain. Staffers like Derella at the rally worried that their retirement funds were going to be cut by 40 to 50 percent. “We feel like we’ve been bargaining in good faith, we’ve made a lot of good proposals, we’ve compromised on a lot of stuff,” says Johnson. “AP is just dead-set: they want to get rid of the pension.”