News Corp. freezes pensions in cost-control measure
News Corp. employees were told Wednesday that their pensions are being frozen, Capital has learned.
The change in the company's retirement-plan contribution scheme applies to certain employees at the New York Post, News America Marketing and News Corp. corporate headquarters, according to a source familiar with the matter, who said that approximately one third of the employee population for those three segments will be affected.
At the same time, News Corp. will increase its contribution to these empoyees' 401(k) plans at an additional annual rate of 2 percent, boosting the existing employer match of 3.5 percent. Employees from this pool who are 40 and over will receive an additional age-based contribution increase to their 401(k)s for the next five years.
The pension freeze will begin on March 1, "which means that while your future years of service will continue to count toward the plan’s vesting rules and the plan’s early and enhanced retirement provisions, you will not earn any additional benefits in the Pension Plan beyond that date," the employees were told in a human resources memo obtained by Capital.
"It's a fiscally responsible move that's fully in keeping with private sector trends in retirement planning," said a News Corp. spokesperson when reached for comment last night.
Pensions have become increasingly rare at private institutions, let alone news outlets. At the Post, for instance, pensions were eliminated for new hires a number of years ago, but veteran employees were grandfathered in, sources said.
"For all its faults, the Post was always very paternalistic," one alumnus told Capital. "This further underscores how things have changed."
At the Post and elsewhere in News Corp., every expenditure is under a microscope now that the company is standing on its own as a publishing-centric operation. A corporate split last summer spun off cash cows like Fox News and FX into a separate publicly-traded entity.
"They want to rein in costs," said another insider.
The spokesperson confirmed that the Post, the marketing arm and the corporate side are the only parts of the company where some employees still have pensions. News Corp. also includes HarperCollins, The Wall Street Journal and newspapers in the U.K. and Australia.