Gannett Ditches Pensions Completely For 401K

From the AP:

Gannett Co., the nation's largest newspaper publisher, on Wednesday told employees that it is freezing the company pension plan, effective Aug. 1, and replacing it with an enhanced 401(k) program.

The changes will affect virtually all of Gannett's more than 25,000 employees in the United States, said Gannett spokeswoman Tara Connell. The McLean-based company publishes USA Today and 84 other daily papers in the U.S.

Freezing the pension plan will save about $90 million in 2009, but that will be partially offset by $60 million in costs associated with the enhanced 401(k) plan, Connell said.

In an e-mail to employees, Gannett Chairman and Chief Executive Craig Dubow said the company is "not alone in making the benefit changes. There is a strong, worldwide trend to limit benefits in pension plans and shift to a more 401(k) based system. Also, enhancing the 401(k) plan makes us more attractive to those employees who especially value these portable, self-directed plans."

The existing 401(k) plan provides a 50 percent match in Gannett stock to employee contributions of up to 6 percent of salary. The enhanced plan will provide a 100 percent match in Gannett stock on employee contributions up to 5 percent of salary.

Gannett stock (GCI) is down more than 50% in the past year.

Isn't it a real morale booster to work at the Des Moines Register and see your company's match become worth less, year after year?

A couple years ago, Gannett revealed some information about their vesting plan for company-matched 401K contributions. Back then, Gannett would not let employees sell company stock from the 401K matching in order to diversify their assets unless the employee was at least 55 years of age. That was worse than Enron's 401K matching plan.

Also back in 2006, the Register was still writing cranky editorials about the evils of Bush-promoted 401K plans.

In other newspaper news, Gannett also announced a couple days ago that they were going to take a $3 billion charge to write down assets.

Just last month, Lee Enterprises (LEE) had a similar billion dollar write down.

It's hard to believe that LEE had fallen through the $10 floor in March. Today the stock is barely above $5 a share! That's a nearly 50% drop in just three months!