Tuesday, October 26, 2010

AP Management Proposes Freeze on Defined Benefit Pension Plan

Citing industry and economic pressures, the Associated Press' chief executive officer Tom Curley in a memo today told employees that the company is proposing to freeze the defined benefit pension plan at current levels.

Here is the memo:

Oct. 26, 2010

AP Staffer:

I want to let you know about some changes in your pension plan that we are proposing as we negotiate a new contract with union employees. Under our proposal, the AP defined benefit pension plan that you are enrolled in would be frozen at the current level of benefit, and any future company investment in your pension would be directed toward a defined contribution plan.

Since I came to AP I have strived to do everything possible to keep your pension plan intact. Unfortunately, industry and economic pressures mean this is no longer possible. Nearly all media companies, as well as more than half of Fortune 100 companies, have already frozen their defined benefit plans.

This was not an easy decision. Your pension and your well-being are very important to me. As we work through these changes, we will strive to find ways to maximize your retirement benefits. Within the next two days, you will be receiving more information about our proposal and the impact it might have. Once the negotiation process is concluded, we will make sure you have more detailed information as quickly as we can.

Best regards,

Tom Curley

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