Tribune Co. Must Be Alert To Protect Pensions In Turning Loose The L.A. Times Credit Union
Of course, like other Credit Union members, I had received the letter from Alex Kort, head of the Credit Union, saying the Tribune Co. had decided to cut the Credit Union loose in 2006. But it was a mild, and not an alarming letter. The Credit Union will stay in existence and Times employees or retired employees, after its 70 years of service, will continue to have access to it.
But at the Credit Union Friday I was told that this letter had been considerably toned down, and that the situation for the Credit Union and its 18 employees is foreboding.
According to what the Credit Union's lawyer is said to have told Kort and other members of the staff, not only will the Credit Union be cut loose, but its staff members will lose their Times pensions and receive what they are owed in lump sum payments they will not be able legally to turn into IRAs.
Since, in this view, this amounts to getting rid of pensions belonging to people who are vested, it raises the question of possible wrongdoing, and it could, if federal agencies are alert, lead to an investigation of the Tribune Co. that could adversely affect all pensions at the L.A. Times. At least, that's what the credit union lawyer thinks.
I was told that Roger Smith, who is a member of the board of the credit union, has asked the new Times publisher, Jeffrey Johnson, to look into this and make sure Tribune Co. is behaving legally and properly. Johnson, as I understand, has responded to Smith that he will look into it.
But according to what Tribune Co. representatives have informed Kort, Smith and other Times employees under the new arrangement can no longer continue to serve on the credit union's board.
Kort, who at 55 will no longer be a Times employee, have no pension and apparently no ability to get an IRA, will have to arrange for a new board to be appointed and obtain outside services to perform payroll and other functions for the credit union staff.
Also, the credit union will proably have to spread out, soliciting members all over downtown. It will no longer, according to what Kort has been told, even be able to use the L.A. Times name.
The new credit union will continue to serve Times emploees, but under a new board perhaps not under quite as advantageous terms as it has formerly. AT the time of the earthquake and other disasters, the credit union traditionally has extended special loans to its Times and retired members. Now, there may be a question of whether it would be able to do so in the future.
All these matters are obviously of concern to Times employees. This blog is kind of a word to the wise. The Tribune Co. has long been cutting back on direct services to Times employees and may not be as good an employer as the Chandlers were. That's not news, but it may be becoming worse news.
It's true that Dennis FitzSimons, Tribune CEO, recently sent out a message to Times employees and others saying Tribune has plenty of resources in its pension funds and that they will be honored. But if this is so, Why is Tribune fixing to leave the credit union's 18 employees high and dry?