NEW YORK — A Guild analysis of AP’s proposal to save $31 million dollars over five years by freezing the pension plan melted down to as little as $9.6 million, depending on the types of assumptions used to calculate continued operation of the plan.
The Guild’s actuary analyzed AP’s assumptions step-by-step as talks focused on the pension plan Wednesday. All of the following are based on AP’s data and assumptions over a five-year period.
Freezing the plan would only save $31.5 million because the employer is required by law to keep funding it.
The AP has proposed replacing the plan with DC plan, which would cost $3 million a year or $15 million over five years. The Guild responded that, based on the AP’s own numbers, there’s no reason to abandon a pension plan.
So now, the the $31 million dollars “savings” is $16 million.
Again, those are AP’s numbers. The Guild’s actuary developed another set of assumptions, just as reasonable as AP’s. Under this analysis, the resulting “savings” are $24.6 million. When reduced by the cost of the proposed DC plan of about $15 million, the savings to AP would be 9.6 million over five years.
The Guild told AP that based on either set of figures, it could see no reason for freezing the pension plan. NMG Administrator Kevin Keane described the cuts to people’s retirement accounts as “radical.”
The union showed AP negotiators a chart indicating that some employees could have more than 50 percent of their projected pension benefit wiped out if AP’s proposal was adopted.
“AP has not justified this draconian reduction in benefits to staff. The sky is not falling,” said Tony Winton, NMG president.
The AP responded that its proposal would eliminate volatility.
“Untrue,” said NMG Secretary-Treasurer John Braunreiter. “AP just wants to shift the all the volatility and risk to employees.”
Representing the Guild were Tony Winton, Martha Waggoner, John Braunreiter, Vin Cherwoo, Don Ryan, administrator Kevin Keane and actuaries Karen Zangara and Rich Hudson of Cheiron.
Representing the AP were: Michelle Ehrlich, Sue Gilkey, Kristin Gazlay, Carole Feldman, Alison Quan, Hilda Auguste, attorney Steve Macri and actuaries Doris Kurash and John Rodgers of Mercer.