Tuesday, February 12, 2008
Sam Zell's note to Tribune employees
From: Talk to Sam
Sent: Tuesday, February 12, 2008 1:41 PM
Subject: 2007 profit sharing
Under Tribune’s former retirement plan, which ended on Dec. 31, you received two contributions from the company -- a 4 percent contribution each pay period based on your pay and an annual profit sharing contribution based on company financial performance.
Last fall, the previous management team made the decision to eliminate the profit sharing contribution. I don’t necessarily disagree with their reasoning -- costs needed to be cut so the going-private transaction could close, and cash flow was down 12 percent through the third quarter of ’07. I do, however, very much disagree with the fact that they didn’t tell you, and left it to me to break the news. As much as I would like to reinstate this plan, we just don’t have the $20 million we would need to do it.
We will, however, make a one-time contribution equal to 2 percent of your eligible pay to your new Cash Balance Plan account early this year. And, you’ll still get the 3 percent cash balance contribution and the ESOP allocation (targeted at 5 percent of eligible pay) in early 2009, for the 2008 plan year.
The Cash Balance Plan is funded by Tribune’s significantly overfunded pension assets. That's why the special 2 percent contribution is possible despite the company’s poor results in 2007. If you have a frozen pension plan benefit, that benefit is secure and remains unchanged.
Look for more on this in the coming weeks.
SOURCE: Jim Romenesko