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AP offers voluntary early retirement program
29 Apr 2009
In an effort to reduce its worldwide labor costs by 10 percent, The Associated Press is offering employees based in the United States and ex-pats 55 and older an enhanced retirement benefit that will increase employee pensions by 14 to 16 percent.
Ex-pats are overseas employees who were hired in the United States and transferred overseas.
The company said it will offer the benefit elsewhere, if legally permissible. Some countries have labor regulations that may prohibit the company from making the offer.
Employees have to be actively employed or have retired between Jan. 1 and May 1, 2009 to be eligible. In addition to being 55, at least 10 years of service is required. Age and years of service must total at least 75.
The benefit improvement will be based on 6 percent of 2008 “pensionable earnings,” which are spread over 12 months. Those earnings include base pay, shift, talent and economic differentials and commissions earned by the employee during the calendar year.
Overtime and holiday pay, mileage reimbursements, bonuses and any one-time special payments are excluded.
The pension assumes retirement at age 65, when employees receive a 100 percent benefit. It is reduced for each year you leave early. If you start receiving benefits at age 60, your benefit would be 66.67 percent of the benefit due at 65. Those leaving at age 55 would receive a benefit equal to 50 percent.
AP will also pay $500 a year for each year of service. It said it didn’t expect that payment to be the deciding factor, but added it would help employees with their health insurance costs.
Employees accepting the voluntary offer will have to sign a general release that waives potential lawsuits against AP and rehire rights. That is common practice.
AP said there are 263 employees in the Guild unit who are eligible to apply. There are about 100 in the administrative group. The number of eligible employees in the ex-pats group is unknown.
In the Guild Unit, 49 employees are 65 or older, 94 are 60 to 64 years of age and 120 are 55 to 59.
The company said the decision should be easy for employees 65 and older and should be seriously considered by those approaching retirement. Other employees’ personal circumstances will be deciding factors such as an ability to find employment elsewhere. Employees who are 61 would receive 73.330 percent of the full benefit; 62 year olds, 80 percent; 63 year olds, 86.67 percent; 64 year olds 93.33 percent.
It is also reduced if you select a different form of payment such as a joint and survivor benefit.
Employee questions can be raised with Sue Gilkey of Human Resources, who is overseeing the program. The Guild can be reached at News Media Guild.