Gannett to freeze employee pension plan
NEW YORK (Reuters) - Gannett Co Inc will freeze its employee pension plan and enhance its 401(k) retirement plan as the USA Today publisher tries to save money in a rough business environment.
The freeze is scheduled to take effect August 1. As a way of protecting employees from inflation, Gannett will apply cost-of-living allowances to the money workers have invested in the plan, according to an internal memo from Chief Executive Craig Dubow, a copy of which was obtained by Reuters.
Gannett plans to save $90 million because of the freeze, and plans to use $60 million of the savings for the 401(k) program, spokeswoman Tara Connell said. Some employees have said they would like an enhanced 401(k), she said.
Dubow said in the memo that the 401(k) change makes the company more attractive to employees because they can transfer such plans from job to job.
Freezing the pension plan also "is another important step in keeping Gannett financially strong," he wrote in the memo.
The company said earlier this week it would take a non-cash pre-tax writedown of $2.5 billion to $3 billion in the second quarter because the value of its assets had diminished.
Several U.S. newspaper publishers have said they would take similar charges for the same reason.
(Reporting by Robert MacMillan; Editing by Toni Reinhold)
