McClatchy said in a statement that it would use the most of the proceeds from the deal -- $163 million -- to help refresh its under-funded pension plan
and another big chunk -- $65 million -- to holders of 2017-maturity bonds.
Carney said last week that the company was imposing its offer because it was a good one: a one-year contract with a 1 percent wage increase, a 1 percent signing bonus and a one-time $1.2 million company contribution to the under-funded pension plan
. In return, union members would pay 25 percent of their health insurance premiums; and 9.5 percent of their pension, a 1 percent increase over the current payment.
This means that its under-funded pension plan
obligations have been transferred to the federal insurer with a significantly reduced payout to retirees.
Does an under-funded pension plan
simply reflect poor recent performance of the stock market, or does it represent a serious long-term liability?
The company also would make a one-time $1.2 million payment to the under-funded pension plan
while employee contributions would increase by 1 percent so they equal the company's contribution of 9.5 percent.
In an effort to shore up under-funded pension plans
, the Lane Transit District board has voted unanimously to adopt a less expensive plan for administrative employees who are hired after Jan.
These losses directly affected AFSCME members through under-funded pension plans
and the need for increased employer contributions.
Almost every week in the media, there is an article about under-funded pension plans
and looming labour shortages.
Companies with under-funded pension plans
are prevented from promising extra benefits to employees without paying for those promises up front.
Corporate profits and cash flows continue to be adversely affected by employee health insurance premiums, which rose 14.8 percent last year, and under-funded pension plans
, which stand at a $216 billion deficit for the S&P 500 companies.