Updated Dec. 9, 6:43 p.m.: An earlier version did not include the amount of the liens, which The Times has now provided.
The Tampa Bay Times’ problematic and underfunded pension fund has been taken over by a federal agency.
The Pension Benefit Guaranty Corp. sent a notice to employees and pensioners Nov. 30 notifying them of the federal takeover of the Times Publishing Company Pension Plan.
Times Publishing, which is owned by the Poynter Institute for Media Studies, is the parent company of the Tampa Bay Times.
The federal pension insurance group takes over struggling and insolvent private sector retirement plans in order to continue paying benefits.
“PBGC is taking this action because your plan meets the criteria for termination under federal pension law. In general, this means that the plan doesn’t have enough money to pay all the promised benefits and your employer is financially unable to keep up the plan. The plan will terminate as of November 30, 2021,” PBGC told 3,300 Times’ employees, retirees and beneficiaries.
A PBGC spokesperson said the federal agency stepped up because Times Publishing is “financially unable to keep up the plan.”
The U.S government group, created in 1974, has bailed out and taken control of pension funds of labor unions, as well as retirement plans of struggling companies – including J.C. Penney, Sears Holdings and the McClatchy Co. newspaper chain. The federal pension group has taken control of approximately a dozen other media and newspaper companies’ pension plans, according to the PBGC spokesperson.
Now, the Tampa Bay Times and its parent company’s pension fund are getting a federal lifeline.
“The maximum annual guarantee in your plan is $72,409.08 for a 65-year-old. Maximum guarantees are lower for those who retire at younger ages or elect survivor benefits,” PBGC told Tampa Bay Times’ employees and pension plan participants.
Times Publishing Company Pension Plan is underfunded by $100 million, according to the company. It covers 3,100 newspaper and media company employees hired before 2005, retirees and other beneficiaries, according to the PBGC spokesperson.
The newspaper company sold its printing press in St. Petersburg in August to Twenty Lake Holdings — the real estate arm of hedge fund Alden Global Capital for $21 million.
Times executives said proceeds from the sale of the 27-acre printing plant property would be used to pay down debt and contribute to the pension plan.
Times Publishing President Conan Gallaty said the government takeover was needed for the pension plan.
“The publishing business has changed dramatically since the plan was frozen to new entrants in 2005. While the pension plan has always paid out its benefits and could do so for many years, the challenge for the company to meet the long-term needs of the plan was insurmountable,” Gallaty said in an email to The Gabber.
Gallaty said, “The Times has been staying current on year-to-year payments and will negotiate continuing payments with the insurer after the takeover is completed.”
PBGC has taken out liens against Times Publishing and Poynter related to the pension plan.
“The Times and the PBGC will negotiate a settlement on the remaining liens and any ongoing contributions to support the plan,” Gallaty told The Gabber.
The liens total $103 million and are for missed contributions to the pension plan’s assets, according to the Times. The PBGC declined comment on the liens.
Gallaty said the Times has “paid nearly $18 million in insurance premiums just in the last decade to protect the interests of our pensioners should we be unable to support the plan. That time has come.”
PBGC’s financing comes from insurance premiums paid by companies whose pension plans are protected by the agency as well as the federal group’s investment portfolio, assets from the pension funds taken over and recoveries and settlements from the companies formerly responsible.
The covered pension benefits for individual employers such as Times Publishing do not come from taxes, according to PBGC, although the government pension agency did receive $94 billion from the American Rescue Act COVID relief program passed in March to assist struggling “multi-employer” pension plans often operated by labor unions.