Benefits Fund Faces Deficit
As previously reported, the Benefits Fund is currently spending more to provide benefits each month than it receives in income from payments made by The Times, employees, retirees and dependents. Projections show that trend increasing to the point where it will exhaust its reserves sometime next summer or fall. Without changes, the Benefits Fund would theoretically have a deficit of $17.6 million by the end of 2011.
Management trustees, who oversee the Benefits Fund along with equal numbers of Guild trustees, proposed benefit cuts last July that are not only much more drastic and sweeping than the Guild’s alternative, but would leave members with less coverage than is currently provided by the management-controlled plan for nonunion employees.
Guild trustees rejected the management cuts, creating a deadlock that must be resolved by arbitration unless a settlement is reached. A hearing is scheduled for November 20.
The Guild’s rescue plan, which would take effect January 1, calls for cost increases across the board – from active employees and their dependents to retirees and their dependents – while maintaining what Murdock says is still a “rich” health insurance plan, compared with other coverage in today’s market.
Highlights of the Guild’s rescue plan include:
- A 1 percent salary contribution from all active employees, effective January 1, 2009, and another 1 percent contribution on January 1, 2010. (The 2 percent raises set for March 31, 2009 and March 31, 2010 would still go into full effect.)
- In-network medical coverage would remain at 100 percent, a key requirement expressed by members in the Guild survey.
- Out-of-network medical coverage would be retained, but cut to 65 percent from 80 percent.
- Increased weekly contributions by active employees.
- Pre-65 retirees would still be covered, but their dependents would not – unless they pay the full cost of coverage. (This is typical of most other plans in the industry; coverage of retirees’ dependents has been very costly to the Benefits Fund.)
- Post-65 retirees would still be covered on a supplemental basis to Medicare, but prescription drugs will no longer be provided. Instead, retirees will be asked to purchase coverage under a Medicare Part D plan. Their monthly payments to the Benefits Fund would go down to partially offset their higher Medicare costs.
The Guild has also proposed several cost-saving measures in the Benefits Fund’s administration and prescription drug program for active employees. These changes would save at least $700,000 a year and avoid the need for deeper benefit reductions.
FULL DESCRIPTION AND COMPARISON OF GUILD PACKAGE
For a full description of the Guild’s plan re-design proposal, CLICK HERE.
For a benefit-by-benefit comparison of the Guild’s proposal, the current plan, the cuts proposed by management and the current nonunion plan, CLICK HERE.
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