Anchor ads are not supported on this page.

4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Copley Employees Likely to Get 5% to 15% Lower Lump Sum Benefits; If Company's Pension Plan Badly Underfunded, May Not Get Lump Sums at All

Yesterday afternoon, I posted an entry indicating that severely-ailing Copley Press will no longer be putting money into its defined benefit pension plan, although older employees will still have access to their money. New employees will not have such a plan. The change goes into effect Jan. 31, unless the company is sold earlier (unlikely). Copley saved itself money choosing that 2009 date. The euphemistically-named Pension Protection Act of 2006 made it more difficult for those preferring lump sum settlements instead of annuities (monthly payments). When interest rates go down, lump sum payments go up. The act of 2006 phased in the use of corporate interest rates instead of Treasury rates, which are lower. This year, 80 percent of the payment is determined by the T rate (now quite low) and 20 percent the corporate rate (significantly higher). Next year, the breakdown is 60-40. Thus, those electing to take the lump sum may lose 5 to 15 percent because the date was shifted to 2009. Also, according to the Pension Protection Act of 2006, if the funded status falls below 80%, the plan may not pay full lump sum benefits, and if the funded status falls below 60%, the plan may pay no lump sum benefits at all. The 2006 act also said that for employees in frozen plans, there may be several years in which lump sum values do not increase, or possibly even decrease. On Sunday night (Dec. 14), Hal Fuson, de facto chief executive of Copley Press, declined to comment in any respect about the plan, including on its funded status. (I was on the Copley pension committee from the late 1970s to my retirement in 2003. In my later years, including 2003, I believed that the fund had too much of its assets in stocks generally, and too much in tech stocks particularly, although nobody else on the committee agreed with me. This doesn't mean, however, that the fund has fallen below the 80% or 60% thresholds.) I called Fuson today to give him a chance to comment; he was not available. I said I would post the item, but if he wanted to change his mind and comment on his company's gains from the Jan. 31 strategy, or on the funded status, I would post his comments.

Here's something you might be interested in.
Submit a free classified
or view all

Previous article

The Fellini of Clairemont High

When gang showers were standard for gym class
Next Article

WAV College Church reminds kids that time is short

College is a formational time for decisions about belief

Yesterday afternoon, I posted an entry indicating that severely-ailing Copley Press will no longer be putting money into its defined benefit pension plan, although older employees will still have access to their money. New employees will not have such a plan. The change goes into effect Jan. 31, unless the company is sold earlier (unlikely). Copley saved itself money choosing that 2009 date. The euphemistically-named Pension Protection Act of 2006 made it more difficult for those preferring lump sum settlements instead of annuities (monthly payments). When interest rates go down, lump sum payments go up. The act of 2006 phased in the use of corporate interest rates instead of Treasury rates, which are lower. This year, 80 percent of the payment is determined by the T rate (now quite low) and 20 percent the corporate rate (significantly higher). Next year, the breakdown is 60-40. Thus, those electing to take the lump sum may lose 5 to 15 percent because the date was shifted to 2009. Also, according to the Pension Protection Act of 2006, if the funded status falls below 80%, the plan may not pay full lump sum benefits, and if the funded status falls below 60%, the plan may pay no lump sum benefits at all. The 2006 act also said that for employees in frozen plans, there may be several years in which lump sum values do not increase, or possibly even decrease. On Sunday night (Dec. 14), Hal Fuson, de facto chief executive of Copley Press, declined to comment in any respect about the plan, including on its funded status. (I was on the Copley pension committee from the late 1970s to my retirement in 2003. In my later years, including 2003, I believed that the fund had too much of its assets in stocks generally, and too much in tech stocks particularly, although nobody else on the committee agreed with me. This doesn't mean, however, that the fund has fallen below the 80% or 60% thresholds.) I called Fuson today to give him a chance to comment; he was not available. I said I would post the item, but if he wanted to change his mind and comment on his company's gains from the Jan. 31 strategy, or on the funded status, I would post his comments.

Sponsored
Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Copley Pension System Solid, Strategy Intelligently Conservative

Next Article

Older City Retiree Woes

Ask a Hipster — Advice you didn't know you needed Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Drinks All Around — Bartenders' drink recipes Excerpts — Literary and spiritual excerpts Feast! — Food & drink reviews Feature Stories — Local news & stories Fishing Report — What’s getting hooked from ship and shore From the Archives — Spotlight on the past Golden Dreams — Talk of the town The Gonzo Report — Making the musical scene, or at least reporting from it Letters — Our inbox Movies@Home — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Outdoors — Weekly changes in flora and fauna Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Sheep and Goats — Places of worship Special Issues — The best of Street Style — San Diego streets have style Surf Diego — Real stories from those braving the waves Theater — On stage in San Diego this week Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close

Anchor ads are not supported on this page.

This Week’s Reader This Week’s Reader