Today we are announcing our plan to offer a Voluntary Retirement Incentive Program (VRIP) that will allow us to further reduce costs and gain efficiency as we continue to restructure for the future. This program will be limited to areas where positions do not need to be replaced or where we can otherwise achieve costs savings. This includes certain roles in Production and Circulation resulting from our earlier decision to consolidate our Production operations into a single plant. It also includes certain positions in our Newsroom, and a very small number of positions in Advertising and IT. No other departments will receive this VRIP offer.
This VRIP will allow us to offer eligible employees the opportunity to retire with enhanced benefits and, at the same time, provide us with an important opportunity to restructure our business and reduce our costs without losing focus on our first mission: to publish best-in-class journalism and compelling content for our readers. To make that possible, not every retirement-eligible employee will be included in the VRIP. While we expect to be able to achieve meaningful staff reductions through this VRIP, I am sorry to say that we cannot rule out layoffs in the future.
I need not tell you that our industry is undergoing a seismic shift as readers face an array of media choices and our traditional advertising and circulation bases decline. The good news is that the appetite for news is as robust as ever. Thanks to our presence on the Internet and on mobile phones and other devices, our audience includes more readers now than we have ever had. But while online revenues have been growing, they have not yet grown fast enough to offset the declines we are seeing in print revenues. As we move forward, our path is pretty straightforward: we will have to reduce our cost structure.
This has not been and will not be easy. Going through a VRIP is, I know, distracting for everyone — the eligible and the ineligible — and I hope to move through this process as swiftly as we can. While we do that, we must not and will not lose focus on our first mission. This VRIP will not solve everything. But it is another step in what must be an on-going evolution as we reposition ourselves for the future.
Below are some of the specifics on the VRIP that we plan to offer certain exempt employees in the next few weeks. We also plan to offer a similar VRIP to certain Guild-covered employees. Post representatives will be discussing the proposed VRIP with the Guild in a few weeks, consistent with the terms of the labor contract. While this VRIP is similar in some ways to the programs we have offered in the past, it will not be as generous as some of those prior buyouts.
Eligibility: To participate, exempt employees must be at least age 50, and have at least 5 years of service under The Postâ€™s retirement plans, as of December 31, 2009. They must be full-time, or part-time averaging at least 22.5 hours a week, and must be working in one of the departments or positions specifically listed in the VRIP.
Program Specifics: Eligible exempt employees who retire under the VRIP will receive:
A lump sum payment of up to one and a half times the employee’s salary based on years of service.
The VRIP will also offer significant enhancements to employees’ retirement benefits on a one-time basis:
An improved retirement formula and “Rule of 80″ benefit. Eligible employees will have two possible pension enhancements and will receive the one that provides them the greatest pension benefit:
One enhancement is an improved early retirement offset factor, so that, for example, an employee can retire at age 60 with 100% of his/her normal retirement benefit.
Another possible enhancement is a “Rule of 80″ benefit – meaning that an employee whose age plus service totals 80 can retire with 100% of his/her normal retirement benefit without having it reduced by early retirement factors.
Retiree Medical Insurance and Increased Pension Supplements.
Full-time employees retiring under this VRIP will be eligible to participate in our retiree medical plans. To assist with the costs of this insurance, we will increase the pre-65 supplement in the pension plan from $3,000 to $4,000 a year, and increase the Cash Pension Supplement from $200 to $225 per year of service (up to 30 years), for exempt employees who retire under this VRIP.
The decision to participate in this VRIP is voluntary. Eligible employees will have 45 days to consider the VRIP and discuss them with their advisors, and will have seven days after they sign the required paperwork to change their minds.
We plan to schedule retirement dates as early as practical, consistent with our operational needs. In Production and Circulation where positions do not need to be replaced due to the plant consolidation, we expect most employees to retire approximately July 31, 2009. The target retirement date for all other employees will be June 30, 2009.
We will distribute VRIP packages to eligible employees in several weeks, and will include a personal fact sheet estimating each eligible employeeâ€™s benefits under the VRIP. We will provide Financial Planning Workshops in order to assist eligible employees with the decision making process. We will also have representatives in HR available to meet individually with employees to discuss their options.
I recognize that a program like this can be stressful for everyone. Thanks to everyone for your understanding and dedication to The Post as we work through this process.
To the Staff:
This morning’s announcement of a voluntary retirement offer to many Post employees once again spotlights the economic challenges facing our industry. It will require many colleagues and friends to make difficult choices. But it doesn’t in any way diminish our commitment to maintaining the extraordinary level of journalism we produce here.
Liz, Raju and I will be meeting with all of your departments in coming days to answer your questions about the offer, to listen to your concerns and to discuss changes in the newsroom.
The basics of today’s offer are slightly different from past voluntary retirement packages. Those of you in eligible Exempt positions who are over the age of 50 with at least five years’ experience will soon be receiving packets explaining all the details of the offer. Those who are Guild-covered will not be notified of their eligibility or the terms of the offer until The Post has concluded a two-week bargaining process with the Guild.
As in the past, this retirement offer is voluntary for newsroom employees. Unlike in the past, the offer will not be made to all employees, but will cover only certain departments and certain groups.
These are difficult and uncertain times in our profession, yet through it all you have collectively demonstrated your dedication and professionalism in producing journalism that is second to none, from the scoop about AIG’s bonuses to the series that last week won Debbie Cenziper and Sarah Cohen the Goldsmith Prize. We know that big personnel moves are disruptive, but our goal is to maintain the extraordinary quality, depth and authority of The Postâ€™s journalism, on every platform, for every audience.
While the pressures upon us will continue we are confident that with such efforts from all of us, we will emerge as a stronger organization prepared to meet the challenges ahead.
We know you have many questions and we will do our best to give you timely answers.