Letter from BDN parent company: Seeking CPA's/Accountants opinions
- Login to post comments
Bangor Publishing Company (parent company of the Bangor Daily News) has sent out the following to all participants - current and future - of its pension plan. Is there anything here plan participants should be concerned about i.e. a sinking company or is it run of the mill corporate left hand/right hand paper pushing?
The purpose of the notice is to inform you that Bangor Publishing Company did not make the quarterly contribution to the plan that was due on July 13, 2012. The amount of the contribution requirement was $406,757. Bangor Publishing Company intends to apply to the IRS for a waiver of certain minimum funding requirements with respect to the plan. This waiver would provide only temporary relief, as our intention has always been to make sufficient contributions to the plan, so as to enable the plan to pay all of the benefit obligations due. The law requires that we notify you when we do not make a contribution that is due. If the IRS grans us the waiver we intend to request, the contribution that was due on July 13, 2012 will be waived. We anticipate that required quarterly contributions that are due on October 15, 2012 and January 15, 2013 will also not be made to the plan, as we will not yet have received a decision regarding the funding waiver at the time(s) that these contributions are due. Assuming the funding waiver is granted, additional contributions will be paid into the plan during the five year period between 2013 and 2017. We do anticipate that a contribution of approximately $360,000 (plus interest) will be made into the plan by September 15, 2012 to satisfy the contribution requirement for the 2011 plan year.
Looking for informed thoughts/opinions on this.
Looks to me like they no longer want to, or can afford to fund the pension plan.
Naran, yes. One was sent out about three months ago saying this would happen. This is nothing more than a repeat of the first, only difference is this time they're saying it did happen.
Bob S, the pension plan was all but stopped some 8-9 years ago as far as new people being admitted to its rolls. This letter applies to those who are currently drawing on it or vested in it but haven't yet begun to draw.
Looks like they could use a new general manager like Lepage.
While it may not be the case here, these notices often are a warning of future problems.
What does it mean? "Looking for informed thoughts/opinions on this."
Not being a retiree of BDN, I have no qualifications to reply. Now my speculations could be many. ( so with a grain of salt ) I would say BDN is havingt some financial trouble and it could get worse. Seriously worse. The demand for news via the written word is going down; thus the price goes up and the sales go further down.
It means: If I were one of the retirees I'd think about " take my money and run". It's a hard call to make.
It means : Social programs don't always work out. Despite what we might think about the press being the campaign mouthpiece for Obama, the BDN is another victim of a failing ( Obama ) economy.
It means: The next announcement might have a reference to Chapter 11.
Maine without BDN ! That is no more acceptable than my computer without AMG !
Thank you, Calvin.
Best, skf
Two weeks ago, the BDN sent us a check for $57 for the remainder of our subscription fee. We cancelled the paper. I won't say that I haven't missed some parts of it. Perhaps, if the BDN returned to reporting rather than advocating its leftist positions, it would see circulation numbers increase again. I think they could never reach 88,000+ where they once were, but the BDN, as a truthful organ (other than obits and sports scores), has failed the test of journalistic integrity. The saddest thing is that the management, the managing editor, the reporters and the staff editors seem to have no inkling that editorializing and advocating in news articles and deliberately NOT reporting newsworthy stories that harm their political dogma are both detrimental to their product.
Many years ago, we had a restaurant in our town that tried to serve a breakfast menu. My wife doesn't like onions in her "home fries" and asked if they could be left out of hers. My sons both wanted V8 juice. The server told us that the owner doesn't like his home fries without onions, "sorry", and he doesn't like V8 juice, "we don't have it". It was difficult for us to want to patronize this establishment. So it is with the BDN. Maybe the paper should go bankrupt.
Su$$man could always swoop in and make a bargain purchase, as a further campaign donation to Chellie. Why not? He already bought the MTM papers for the same purposes.
This is spiral death. If they couldn't afford this quarter's contribution, they won't be able to afford the next quarter's conbtribution, either. They need to terminate the plan ASAP, and clean up the remaining financial mess. I think that's why they are saying "additional contributions will be made to the plan" through 2017. They want to stretch out the 2012 liability over 5 years.
The Labor Department wants to make sure that companies make their required contributions to the pension plans. To do otherwise is taking the employees' money without their permission. The BDN is facing very heavy fines and penalties if they steal from the employees this way.
The BDN is facing, just like governments are, a decreasing ability to pay for the generous promises they have made to others. Perhaps when facing this situation it would dawn on the BDN editors that their demands for endless government benefits are unrealistic as well.
But, I suspect just like the Brunswick Times-Record, which is happy to provide vocal support for higher taxes to pay for the Brunswick growing government expenditures - while the paper itself can't pay it's own tax obligation (and has received special favor from the town to waive forclosures on its printing equipment) - there will always be a disconnect between what the liberal will ask of us, and what they do themselves.
Naran, I was just about to post the same thing. He could probably call it a campaign donation.
Sussman would be on the hook for the pension contribution if he bought the paper. The paper needs to clean up this pension situation, and THEN it will be able to find a buyer.
Otherwise it's bye-bye BDN.
AMGers may have read this elsewhere, but the Ford Foundation is making grants to both the NY Times and the Washington Post:
the Ford Foundation is making grants to both the NY Times and the Washington Post:
From the Ford Foundation web annual report:
"But the fight for a world defined by opportunity, fairness and dignity is far from over. Today, in a time of extraordinary change, we believe there is a rare opportunity to transform the world anew."
So I guess it is safe to conclude that these liberal media outlets are not as much about news as about "a rare opportunity to transform the world anew?" If the Wall Street Journal was struggling, would the Ford Foundation help out? Somehow, I doubt it.
Su$$man could always swoop in and make a bargain purchase, as a further campaign donation to Chellie. Why not? He already bought the MTM papers for the same purposes.
Naah... won't happen. BDN is a Second CD publication, and he's already got enough clout there as it is. Unless, of course, he's got a thing for Mikie Michaud.
Not that there's anything wrong with that.
Tom C, just to clarify, the retirement plan was always a non-contributing plan i.e. employees paid nothing into it. The company made 100% of the contributions.
eagleisland I think you would have to clarify that w/ the "Earl" !
from eagleisland:
Su$$man could always swoop in and make a bargain purchase, as a further campaign donation to Chellie. Why not? He already bought the MTM papers for the same purposes.
Naah... won't happen. BDN is a Second CD publication, and he's already got enough clout there as it is. Unless, of course, he's got a thing for Mikie Michaud.
Not that there's anything wrong with that.
Bwa-ha-ha. :)))) Good one, eagleisland!
The company made 100% of the contributions.
I smell collective bargaining.
Judging by the "quality" of the reporting and the lack of "demonstrated ability to write an intelligent story" that we have seen lately, I have concluded that the Bangor Daily has been operating pretty much with a "minimum wage staff". Many of the major stories are so incoherent it is appalling that they even see print. It is nothing like the paper I enjoyed 25 yrs ago and have been reading since high school in 1963.
Some boob down there wrote an "anti gun editorial" in yesterday's news. It parroted the straight liberal anti-gun arguments from Harvard University. It was so factually bereft that it bordered on ignorance. One good rule of thumb is that you should have some pretty good knowledge of that of which you speak but the above writer demonstrated a total lack of any knowlege of firearms and of numerous statistical studies that have been done, and was the last person that should have written such a piece. It was just terrible!
And the commentors utterly and completely destroyed any and all points it tried to make. It was totally annhilated in the comments section. I would have been embarassed to have authored such a poorly researched piece! It sounded like it could have been written by a 6th grader and could not begin to make any cognitive argument for its basic premise, that America has way too many guns, other than to quote the liberals at Harvard word for word.
When you pen some BS that your readers are just going to drop a nuclear bomb upon, and rightfully so, you have not done your future sales one bit of good.
There is gross incompetence at work at the BDN and it exists in the management as well as in the writing staff.
I don't really think it could get much worse, it is almost irrelevant now!
WC
Almost???
You're far to generous, WC.
Tom C, just to clarify, the retirement plan was always a non-contributing plan i.e. employees paid nothing into it. The company made 100% of the contributions.
Doesn't matter, while not as bad as funding the corporate losses with trust funds, the contributions are still the employees' money.
Without getting into the specifical laws and regulations involved, which are complicated and I couldn't cite off the top of my head anyway, this involves an issue that the Labor Department has taken very seriously for decades - misuse of employee pension funds. Not only can the IRS get involved (is it a "penalty" or a "tax"? Only the IRS knows for sure!) but pensions are the Labor Department's baby.
Consider whether Bain Capital had stolen employee's pension funds to fund corporate mismanagement - the BDN and the rest of the lefties would be crowing it from the rooftops. However, in this case, the LIBERALS demand an exemption from the the very laws they championed.
Just like the Brunswick Times-Record has gotten special treatment from the Town of Brunswick to avoid having their printing equipment seized for years of non-payment of personal property tax, now the BDN looks to the liberal Obama administration for an exemption from the pension contribution laws. Some sheep are more equal than others, I guess.
I wonder how all of those retirees feel that their payments are being cut so that Bill Nemitz can keep his job.
I wonder how all of those retirees feel that their payments are being cut so that Bill Nemitz can keep his job.
Nemitz doesn't write for the Bangor Daily News.
Yeah but they're all one big happy company.
Yeah but they're all one big happy company.
No, actually they're not. The Bangor Daily News is owned by the Bangor Publishing Company. Nemitz works for Maine Today Media, of which Gerald Sussman is the largest shareholder.
Completely different companies. The BDN and the MTM papers do have some content-sharing agreements, but ownership is different.
I wonder how all of those retirees feel that their payments are being cut so that Bill Nemitz can keep his job.
Apollo, get hip. Nemitz is on the payroll of the Maine Republican party.
Without going into great detail, this is a defined benefit plan. Based on the information given, the plan was suspended 8-9 years ago(not allowing new participants). Whatever monies are now in the plan are in the plan...what will probably happen is the company (BDN) will look to terminatae the plan in the near future. At that time, participants will be given several choices on how they wish to receive their benefit, including continuing whatever benefit was orginally proposed. A terminal funding company will then take over the plan and relieve BDN of further responsibility. Often, a new plan such as a 401K will be put in place (defined contribution). I just handled one of these for another company in Maine. PM if you'd like more info or have a specific question and I'll try to answer it for you. Just remember, defined benefit plans are really a thing of the past....
defined benefit plans are really a thing of the past....
The private sector got rid of most of the defined benefit plans 20 years ago.
Many governments still have them.
No idea why the BDN was hanging onto its plan. If they closed out entrance to the plan years ago, than the plan group is getting older, and has the most senority, so tend to be the most entrenched and more highly paid. Also, as the employees in the plan get closer to retirement age, any flexibility included in the actuarial assumptions are getting narrower, and the plan's contribution is getting higher rapidly as the contributions must make up past economic underfunding.
They should have closed this plan before they got to this point.
Pension rules are ridiculously complicated, but, and someone could check me on this, the BDN would only be required to make quarterly payments if they had a funding shortfall in the past. So, this may be another chapter in a long-running issue. Secondly, I beleive there is a penalty of 10% on quarterly payments that don't meet any liquidity shortfall of the plan, so it's possible the BDN would be hit with a 10% penalty, er.... "excise tax"... on the late payment if they didn't have some other overfunding in the plan. Since they state they won't be able to make quarterlies in the future, they may incur additional penalties every 3 months, but I'd like someone to check the 10% penalty on late quarterlies.
In addition, annually the employer would be subject to a 10% penalty on any accumulated underpayment, so they get hit with this penalty every year. Now, it might be possible that they would be making partial payments, so the penalty might be proportionately less.
We can all speculate about what the BDN's notIce means but we need more info. So, I suggest that if a BDN assignment editor came across such an ominous-sounding notice from another, equally prominent, Bangor business, he/she might smell a story and direct a reporter to look into the situation.
Even if there's more smoke than fire here (which I doubt), an explanatory article would surely grab the interest of many readers, as posts in this thread indicate. After all, isn't it the job of the local daily newspaper to report on business developments in its home community. So, BDN staffers, tell us what this notice really means. If you dare.
- Login to post comments
Chairman -- to your knowledge, is this letter a "first"?