Baltimore Sun union memo

NOT-SO-HAPPY VALENTINE'S DAY, FROM THE SUN

The Guild met today with the Sun to discuss the company-wide voluntary buyout being offered to merit and Guild-represented employees.

Another reduction in staff is something none of us want to see, but The Guild does believe that buyouts are preferable to layoffs, in most cases. So the Guild has indicated an agreement in principle to participate in the plan. But we are still waiting for some legal documents we need to see before the deal can be final.

Here's the gist of what we learned:

The Sun is planning to offer to eligible employees a separation package valued at one week of base pay for every 6 months of service. That means if you've been here 20 years, for example, you'd be eligible for 40 weeks of pay. The Sun will pay a minimum of 6 weeks base pay and a maximum of 1 year (or 52 weeks). On top of that, the company also is offering an additional 3% of the buyout amount to help cover some taxes.

This buyout, however, is different than other recent ones. Instead of the continuation plan many of you have become familiar with, where eligible employees continue to receive a paycheck for a set period of time, the Sun is offering one of these three ways to be paid:

Lump sum -- Take your money as a lump sum payout, subject to applicable taxes.

Rollover to an IRA or other qualified retirement plan -- This would work just as if you left one employer for another and rolled your existing 401k money into another plan. It is our understanding that such a rollover plan would be tax-free.

Various annuity plans -- We're still waiting for more details on what these are.

Under this proposed separation plan, your medical benefits will continue for as long as your pay does (1 week for every 6 months of service), with a minimum duration of 12 weeks and a maximum of one year (52 weeks). Those who accept the plan will be billed quarterly for their share of the premiums during continuation of medical benefits.

The window to apply for the voluntary separation program is scheduled to open tomorrow, Feb. 15. It closes at noon on Friday, February 29.

That gives employees who want to consider the plan only two weeks to figure out which, if any, of the options works best for them. We think the company should give more time, considering the complexity of this plan and the possible tax consequences of each choice. So that's one area that we're talking to the Sun about.

Remainder of union letter can be read here.

SOURCE: Jim Romenesko