After eight months of negotiations, the Washington Post’s unionemployees have agreed to a contract extension, which will freezethe company’s defined benefit plan, effective August 31.

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“We regret to say that (the) Post never budged from its demandto slash retirement benefits,” according to language in a statementfrom the Washington-Baltimore Newspaper Guild, which represents 860Post employees.

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The terms of the contract also close the company’s cash balanceretirement plan to new employees. The Post also agreed to notde-risk pension liabilities by selling the plan’s assets to aninsurance company.

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Last September, union and non-union employees of the Post wereinformed that the company was freezing its defined benefit plan and transferringparticipants to a cash balance plan.

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A lump-sum buyout was also offered to retirees and currentemployees. Information on how many employees accepted the buyout isnot available since the Washington Post went private in 2013 whenit was bought by Jeff Bezos, Amazon’s founder, and other privateequity investors.

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In 2012, the Post reported that its defined benefit pension plan was 141percent funded, with $2.07 billion in assets and $1.47 billion inliabilities.

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In lieu of defined benefits, employees are offered a401(k) plan. According to research onfutureadvisor.com, an RIA firm, Vanguard is the service provider tothe plan, which offers 25 investment options with an averageexpense ration of 19 basis points.

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The defined contribution plan holds more than $99 million inassets for 2,656 participants. Last year the company match wasreduced to 1 percent from 5 percent.

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The Newspaper Guild of New York, whichrepresents union employees at The New York Times and ConsumerReports, approved a hybrid defined benefit plan last year, designedby Cheiron Inc., an actuarial firm.

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Those plans offer a lifetime defined benefit at retirement thatis based off of employees’ contributions. The hybrid plan isdesigned to limit sponsors’ funding liabilities they experiencewith defined benefit plans, a primary reason behind the shift fromdefined benefit to defined contribution plans.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.