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U-T pension deficit soars, is considered risk factor

Benefit obligation $235.6 million; plan value $139.4 million

Union-Tribune numbers in Securities and Exchange Commission report
Union-Tribune numbers in Securities and Exchange Commission report

The San Diego Union-Tribune's pension/retirement deficit rose to $96.2 million at year-end 2015, according to the parent Tribune Publishing's 10-K annual report to the Securities and Exchange Commission. The deficit was $85.4 million in May of 2015, when Tribune Publishing bought the U-T.

Tribune Publishing (which is changing its name to "tronc" — with a lower case t — later this month) lists the pension deficit among risk factors that potential investors should consider before buying the stock.

The deficits of other Tribune Publishing newspapers are not listed as risk factors in the document.

The numbers are alarming. As of yearend 2015, the amount the company owes over time to employees and former employees is $235.6 million. But the value of the pension plan's assets is just $139.4 million. Tribune Publishing contributed only $3 million to the fund last year, according to the filing.

The return on the plan's assets was minus $10.2 million last year.The company paid out $9.9 million in benefits, according to the document filed with the securities agency.

I have learned from a knowledgeable source that the Union-Tribune had a pension-plan deficit when it was bought by Platinum Equity in 2009. But my source does not remember what that deficit was.

When Tribune Publishing bought the U-T, I asked a Chicago spokesman to identify which ownership (Copley, Platinum Equity, Douglas Manchester) had run up the pension deficit the most. He would not reveal that information.

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Union-Tribune numbers in Securities and Exchange Commission report
Union-Tribune numbers in Securities and Exchange Commission report

The San Diego Union-Tribune's pension/retirement deficit rose to $96.2 million at year-end 2015, according to the parent Tribune Publishing's 10-K annual report to the Securities and Exchange Commission. The deficit was $85.4 million in May of 2015, when Tribune Publishing bought the U-T.

Tribune Publishing (which is changing its name to "tronc" — with a lower case t — later this month) lists the pension deficit among risk factors that potential investors should consider before buying the stock.

The deficits of other Tribune Publishing newspapers are not listed as risk factors in the document.

The numbers are alarming. As of yearend 2015, the amount the company owes over time to employees and former employees is $235.6 million. But the value of the pension plan's assets is just $139.4 million. Tribune Publishing contributed only $3 million to the fund last year, according to the filing.

The return on the plan's assets was minus $10.2 million last year.The company paid out $9.9 million in benefits, according to the document filed with the securities agency.

I have learned from a knowledgeable source that the Union-Tribune had a pension-plan deficit when it was bought by Platinum Equity in 2009. But my source does not remember what that deficit was.

When Tribune Publishing bought the U-T, I asked a Chicago spokesman to identify which ownership (Copley, Platinum Equity, Douglas Manchester) had run up the pension deficit the most. He would not reveal that information.

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Comments
17

We all keep wondering what ERISA really did for "income security." That law, now more than forty years old, was intended to insure that retirement plans were adequately funded, and that arbitrary actions by employers were not going to deny benefits to those who were owed. At this time, it seems that ERISA did just the opposite of the intentions. Now, few corporate or other private employers offer retirement plans other than 401k plans. And many of the plans that have existed for decades are underfunded and/or in danger of going under. The Pension Benefit Guaranty Corporation supposedly stands behind the plans that cannot meet their obligations, but it doesn't guarantee the full benefit the plan promised. You'll get something, but not necessarily what you counted on, if you're fortunate enough to have any plan at all.

My take is that the law was really rather toothless when it came to demanding that sponsoring employers actually keep their contributions high enough to secure the benefits promised. And so another group of retirees see their pensions imperiled. But that never seems to happen to public employees.

June 12, 2016

...

June 13, 2016

Yes it does happen to public employees. The City of San Diego ripped off and completely scammed its public city employees big time. Former Republican Mayor Pete Wilson lied to City employees and bamboozled them into dropping Social Security benefits and explicitly promising City Employees a generous defined benefit retirement plan that the City of San Diego would contribute to every year (BS). But wait, Wilson and a succession of Republican Mayors (including Susan Golding) looted the City pension plan siphoning off hundreds of millions of dollars that was supposed to be made to the City employee pension payments and using it for their pet projects/corporate welfare like: trying to get the Republican Convention, subsidizing developers with corporate welfare, subsidizing sports team owners like Alex/Dean Spanos with Chargers ticket guarantees, subsidizing John Moores, Petco Park and the Padres, subsidizing the downtown convention center..the list is long. The hundreds of millions in City pension payments were never made by Republican mayors breaking Wilson's promise to City employees. Then, when the economy tanked, the money to make the City employees pensions whole had been spent/diverted/stolen and was gone.

June 13, 2016

Instead of telling the truth and taking the blame for their ineptitude and incompetence, The Republican officials/Downtown establishment borrowed a page from Wall St's playbook (blame Main St. for the Abuses of Wall St.) Then, they used Koch Bros funded phony reformers like Carl De Maio to blame the City Employees for the Huge Ripoff and non payment of city Pension Fund payments by a succession of Republican Mayors?!?! Only in San Diego with its major media controlled by the Republican establishment (The Union Tribune for decades) could the Republican Establishment get away with covering up the corruption by a series of Republican Mayors who stole the City employees pension payments and then blamed the City Employees for their crimes?!?! I am still waiting for the investigation of the source of Carl De Maio's huge windfall profits from a couple of shell companies that he ran that made millions selling 20-30 year old well known, worn out and oftentimes not effective ideas about privatizing government services). De Maio was reportedly given lucrative "no bid" federal government contracts from the Bush Administration as he started his operations in DC then carpetbagged it out to San Diego). Mysteriously, De Maio then sold his companies for millions in profits (that had little or no value) to a big corporate sugar daddy rumored to be a shell company affiliated with the massive Koch Bros umbrella group of "political action/non profits". The toothless local media never traced the source of these mysterious funds and who was funding De Maio's rise in San Diego...rumored to be a Koch Bros shell company.. Then, as with the Wall St. created crash of 2008 when Main St. was made the scapegoat for massive Wall St. Fraud and corruption that crashed the world economy, conservative Republicans and the Downtown establishment lined up their puppet, Carl De Maio, to stick it to City of San Diego public employees by moving their pensions over into less generous 401Ks that is invested/day traded by Scam Artists on Wall St..and much of it is lost whenever the market tanks, but they still collect lucrative management fees and commissions no matter how badly they do in the market. "Pension Reform" for the City of San Diego was a way to scapegoat city employees, renege on the City's pension deal that was collectively bargained with city employees and shift the blame for the mess to Union Employees and away from the true culprits...former Republican Mayors and recipients of their corporate welfare(big Republican Donors, Developers, Sports team owners etc).

June 13, 2016

Full Disclosure: I do not have a dog in this fight. I am not a City employee and have no financial interest in this other than as a taxpayer. I am just surprised at the UTTER AND COMPLETE CON JOB PULLED ON City of San Diego employees and sold to the gullible voters.

It is no wonder that the City of San Diego is badly leaking and cannot hire/keep/retain highly trained police, fire, 911 operators and many highly skilled management and other employees based on the crap way they were treated, lied to and ripped off on their pension plans and benefits including forfeiting US Social Security for a pension plan that was changed into a very iffy, very non competitive 401K plan.

June 13, 2016

SportsFan0000: I have covered San Diego as a journalist for 43 years. I am no longer surprised by con jobs within government, or in the public sector. Best, Don Bauder

June 13, 2016

Two questions, SportsFan: has any city employee lost a retirement benefit that was promised? (Last I heard they get a 13th check every year that goes beyond the promised amount.) Do you really think that those people who are leaving city employment are leaving because of money, or could it be something else? (Think about honesty and leadership.)

June 13, 2016

Visduh: To my knowledge, the 13th check still goes out, but I haven't covered that story in a long time. Best, Don Bauder

June 13, 2016

SportsFan0000: Those with 401(k) plans have to think about this economy and this stock market. Negative interest rates in Europe could have a deleterious effect on markets everywhere in the world. If China is indeed a bubble, some companies, including San Diego's Qualcomm, could get hit very hard. Best, Don Bauder

June 13, 2016

SportsFan0000: The most egregious example is the 1996 Republican Convention in San Diego. The city's pension plan got ripped off because then-Mayor Susan Golding wanted to run for U.S. Senate, and she would be put in the spotlight at the convention. Best, Don Bauder

June 13, 2016

You aren't fooling anyone "SportsFan0000” by weaving an elaborate story of facts that then jumps to an inaccurate conclusion. Not a single city of San Diego employee has lost anything by not being part of Social Security. City pensions are routinely four to five times higher than Social Security payments to retirees with the same salary and time in the workforce, plus the city pensioner gets the retirement dough more than a decade earlier. Most city taxpayers will be working well into their sixties to pay for city employee pensioners who retire at ages 50 to 55, or even earlier on "disability."

And not a single city pensioner has lost a dime of promised pension benefits after your so-called "looting," by Republican mayors. To the contrary, enhanced pension benefits were approved concurrently and AFTER the time of those mayors and taxpayer payments for city pension contributions have gone up sharply, at about $300 million each and every year for a decade now. Those good pensions became sky-high pensions along with the paid healthcare.

But while city employee pensioners have raked it in, city residents have suffered crumbling streets and sidewalks, water main and drain failures, Balboa Park buildings in disrepair, and overall diminished services because of the pension contribution burden. So go peddle your government employee propaganda somewhere else.

June 13, 2016

BobGloss: There are multiple reasons for San Diego's infrastructure being in bad condition. Over and over again, the infrastructure gets the short end of the stick because politicians want to spend the money elsewhere, often on corporate welfare such as the baseball ballpark and now the Chargers stadium. (This time, the politicians might not cave. But I fear if the downtown Chargers location is knocked down, the leadership will get the team to accept a new stadium in Mission Valley. That will lead to more infrastructure neglect, too.) Best, Don Bauder

June 13, 2016

Your "analysis" is incorrect. City employees lost a life time of Social Security check benefits if they worked their entire careers at the City of SD...worth a lot of money if they retire at 65 or 67 and live to be in their 80's or 90's.. Many government plans provide for employees to get their government pension and allow them to be eligible for and collect Social Security. City removed them form Social Security and cost the average worker with average life expectancy close to a million dollars in lifetime pension benefits from Social Security....more for loss of disability benefits.

Government defined benefit plans are calculated based on age, service time and other factors depending on the plan. Employees did not get "enhanced" pension benefits. Republican Mayors looted that money. Payments were not made by City officials since the money was diverted, looted and used for other "pet projects" and crony deals. City employees received only average government retirement benefits not significantly enhanced benefits. And, the City did not make the legally required payments on the pension plan so investment funds could not be invested and fund values could not go up to cover the benefits and payments required by the City went higher because the City acted like a deadbeat debtor and did not make the required payments into the plan. Any higher pension payments required were the fault of the Republican Mayors who did not make the required payments into the plan...like if you don't pay your house or car note the arrears will make the payments much higher. Again, your "blame-shifting" from the real culprits.. Republican Mayors who acted like deadbeats and did not pay the contractually required payments into the City pension plan that put the payments in arrears and ballooned the costs were the fault of the Republican Mayors' mismanagement of City Funds and failure to pay the required pension payments/ San Diego's infrastructure deficits and monies needed for roads, sidewalks water mains, infrastructure etc is the fault of the mismanagement of incompetent Republican Mayor and their cronies....leading to general fund funds being diverted to corporate welfare and pet projects like the Qualcomm remodel, the Chargers ticket guarantee, the note on Petco Park etc.... Stop falsely blaming City employees for the mismanagement of the City's budget and funds by Republican Mayors. It is/was not the fault of the City employees...You have your "facts" confused big time..

June 30, 2016

Yes City employees lost 20-30+ years of Social Security... (1million+dollars depending on longevity). Yes City employees could lose even more if they are also cut off of SS disability benefits (If City did not withhold, they may get zero benefits). No, City pensions are not "routinely 5X higher than Social Security benefits". You are badly misinformed. No City employees do not "routinely retire at age 50-55" more bad information. It depends on when they are hired. Defined Benefit plans pay out based on time served (20-30 years or more), age of the person...more money if they retire in their 60's..penalized heavily if they retire in their 50's OR If they go out with less than 30 year service time. No, You do not have a Clue as to how a government Defined Benefit Retirement Plan works...that much is obvious. Again, Yes City employees lost Social Security Benefits and possibly disability benefits worth in excess of 1 million dollars EACH EMPLOYEE. Yes it is indisputable that former Republican Mayors including Wilson and Golding "looted/diverted" City pension monies and did not make the payments required under the agreements with City employees. Yes if the City does not make the pension payments for years, then the payments owed will go up substantially....Blame is on the Republican Mayors who diverted/looted pension funds and did not make the payments as required. Don't pay the payments on your commercial building, house or vehicle and the remaining payments are much higher. The City pensions were not "sky high" pensions they were merely decent and competitive with other Cities, Counties and States. NO Healthcare is not paid for you when you retire with a government defined benefit plan. You must make the health care payments for you and family members yourself either with Cobra or with a retirement health insurance plan or with the ACA. The government does not pay for or contribute to your health insurance when you retire. City employees were not "raking it in" as you falsely state. City is bleeding experienced police, fire, 911 operators and experienced professionals because of low pay and non competitive pensions. Talk to your former Republican Mayors and the Republican controlled City Council FOR DECADES....They are responsible for the crumbling infrastructure. They were making sweetheart deals with the Chargers including stadium renovations and Chargers ticket guarantees...And with Moores and the Padres another 15-20 million note the City was paying every year until they shifted it to a downtown agency to pay...they were diverting funds from the general fund for pet projects like the Republican Convention bid. They heavily "deferred required city maintenance for infrastructure"... If City was mismanaged and is behind in infrastructure repairs that is the fault of Republican City Leaders....Scapegoating City employees that were ripped off by Republican City leaders is dishonest and is not factually accurate...

June 30, 2016

Visduh: Good analysis. The Pension Benefit Guaranty Corporation has backfired, in the sense that overwhelmingly, private sector operations have dropped defined benefit plans and gone to defined contribution plans.

Mainly these days, it is governments that offer defined benefit plans -- making government jobs more attractive than private sector jobs (at least until one makes top management). Best, Don Bauder

June 13, 2016

We are investing in future poverty and revolution. We do not invest in education for all. We do not value work. We do not value people (employees). We do not value our citizens. We value money no matter how it is made no matter who it destroys and our politicians only care about importing cheap labor (immigrants) and destroying the middle class. When the middle class is destroyed and there are only the wealthy and the poor/working poor then there will be a revolution.

June 13, 2016

AlexClarke: Your analysis is a sound one. Greed has reached a scary level in the United States. We do not invest in education or pay teachers what they deserve. Everything is measured in dollars. A chief executive officer of a corporation will take $50 million in annual pay and then fight even the slightest raise for employees who are living at the poverty line or below it. Best, Don Bauder

June 13, 2016

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