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Copley Press (Union-Tribune) employees and retirees got good news Friday: the pension plan is in sound shape, and is following a conservative investment strategy. The plan was 111% funded in 2006 and 103% in 2007. At yearend 2008, assets were $202.8 million and liabilities $202.6 million -- a very good performance given the current market megrims. The investment policy is to strive for a portfolio of 30% stocks and 70% bonds -- a very intelligent strategy. By contrast, the plans for both City and County employees are more than 50% stocks. At the end of 2008, the portfolio had 35% U.S. government securities, 37% corporate debt instruments, 21% stocks, 1% cash and some funds in other miscellaneous categories. It is not clear how long the company, whose plan is handled by the Vanguard investment management complex, has employed this sound strategy. On Dec. 14, the beleaguered company said it would no longer put money into the defined benefit pension programs, and new employees would not be able to get in. On Jan. 16, it said it would no longer match employees' contributions to the defined contribution plan 401(k). The company put itself up for sale last July and on March 18 finally said it has a buyer: Beverly Hills private equity firm Platinum Equity, which will rely on help from David Black, who controls a troubled Vancouver firm consisting of almost entirely small papers. Black has been interested in Copley since last summer. Union-Tribune employees expected further personnel cutbacks in February, but they didn't come. There were rumors that the axe would fall April 15. It didn't happen. Now the rumors point to April 24 or early May. But few rumors flying around that company ever turn out to be accurate.

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Comments

SurfPuppy619 April 19, 2009 @ 8:24 a.m.

The plan was 111% funded in 2006 and 103% in 2007. At yearend 2008, assets were $202.8 million and liabilities $202.6 million -- a very good performance given the current market megrims. The investment policy is to strive for a portfolio of 30% stocks and 70% bonds -- a very intelligent strategy.

103% funded is where the San Diego pension system could be right now if they didn't;

1- Jack up retirement rates with bogus retroactiv increases; and

2- Use a bogus, impossible long term 8% rate of return; and

3- Made regular contributions (ofcourse regular contributions do not help at all when you are engaging in 1 and 2 aboove).

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Burwell April 19, 2009 @ 8:44 a.m.

If Congress lowers the pension funding requirements in response to pressure from employers whose plans are grossly underfunded, then Copley's plan would be overfunded by a wide margin. Can Black siphon cash from the Copley plan if Congress weakens the funding rules and the plan becomes overfunded?

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Don Bauder April 19, 2009 @ 10 a.m.

Response to post #1: Good points. The 8% is now down to 7.75. Another point could be that the system should have had a more conservative portfolio strategy: say, 30 to 35% equities, as it had been in the mid-1990s. Best, Don Bauder

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Don Bauder April 19, 2009 @ 10:08 a.m.

Response to post #2: Yours is a very good question that I do not have an answer to. I have given some thought to it, but haven't done my homework. Platinum Equity is a private equity operation known for its slick financial engineering. An overfunded pension plan would be a natural target. I know corporate raiders used to use such ploys in the 1980s, but I don't know if they are still legal. I don't know what will happen to the fund on change of ownership. The sale is supposed to go through in the current second quarter. But perhaps we are jumping the gun assuming that it will go through. Some of these deals get aborted. Best, Don Bauder

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SurfPuppy619 April 19, 2009 @ 11:28 a.m.

Can Black siphon cash from the Copley plan if Congress weakens the funding rules and the plan becomes overfunded?

By Burwell

An overfunded pension plan would be a natural target. I know corporate raiders used to use such ploys in the 1980s, but I don't know if they are still legal.

By dbauder

Raiding pension funds must have been outlawed by now. Although I have no direct knowledge if it is or isn't.

Victor Posner was a notorious pension fund raider/take over artists who wrecked numerous well funded pension plans, the biggest being Sharon Steel in the 70's and seamstress pattern maker Simplicity Patterns.

I cannot beleieve that pension raiding nonsense is still going on today.

One other oddity is that Posner's daughter married actor Burt Ward of 60's TV series Batman fame, and they have a dog rescue/sancutuary in San Bernardino. Here is a pic of Posner's daughter and "Robin the Boy Wonder";

http://www.gentlegiantsrescue.com/images/We're%20on%20TV%20Scrapbook%202%20final%20cropped.jpg

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Don Bauder April 19, 2009 @ 2:40 p.m.

Response to post #5: Ah, the late Victor Posner. When I was with Business Week in Cleveland 1966-73, the other guy in the bureau -- a brilliant writer and reporter who wound up as a Hollywood producer -- wrote a story on Victor Posner, one of the bandits of those days. My fellow writer found that Posner not only lacked ethics; he lacked intelligence, too. Among other things, Posner once controlled Arby's. I would sometimes lose my appetite when eating a roast beef sandwich there. Best, Don Bauder

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classico April 20, 2009 @ 2:50 a.m.

Retirees who took buyouts so Copley's papers would look leaner and meaner for buyers are still being screwed by termination of the company's retiree health insurance. I personally know cancer survivors who will be left high and dry after COBRA and years before they are eligible for Medicare. They would never have taken the buyouts if they'd known David Copley would prioritize yachts and costume design over people. What a joke.

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Don Bauder April 20, 2009 @ 7:04 a.m.

Response to post #7: There is controversy whether employees who retired early were promised that the company would carry their health insurance until they qualified for Medicare. Some say they were promised, others say the company cautioned that it might not be able to continue the program. In any case, the cancellation caused suffering and the company knew it would. Best, Don Bauder

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PaperGirlSD April 20, 2009 @ 10:09 a.m.

Response to #2 - The Copley Pension is not part of the sale. It is separately held and therefore secure. Black can not touch it. - Even if it was included in the sale, it would not be legal...

Response to #7 - I agree, quite sad and wrong. I hope the folks who need help can find another avenue (like the VA) to get the medical help they require.

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Don Bauder April 20, 2009 @ 10:34 a.m.

Response to post #9: Your analysis sounds logical; I hope it is correct. I don't believe acquiring companies can snatch the acquired company's pension fund and use it for different purposes anymore, but as I said, I don't know for sure. Best, Don Bauder

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classico April 20, 2009 @ 12:38 p.m.

Response to #8: The written words "until you reach age 65" seem pretty clear to me.

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