Troubled Random House Freezes Pension Benefits; Continues to Match 401K Contributions
Publishing News
book business, Random-House
5 Comments
Celebs are getting paid million dollar advances on books that will likely never sell out their advance, but Random House has decided to freeze the pensions of current employees and totally eliminate pension for future hires. The current employees' pensions will no longer grow, however, the existing 401K matching plan of up to 6 percent will be maintained. Simone & Schuster CEO Carolyn Reidy suggested part of the problem is that people were buying fewer titles.
"What I think is happening is that you would have somebody who would go into a store and buy a front list title, and then … buy a second book. And now they aren't buying that second book," says Simon & Schuster CEO Carolyn Reidy.
Nov 20, 2008 @ 22:05:36
My day-job is in the payroll world, and honestly? Pensions are pretty much a thing of the past. They’ve become far too expensive for most employers to continue with (especially with the rising cost of health-care every year) and so we’ve pretty much gone from an employer deferred compensation (aka, pension) to an employer ‘matches your contributions’ society.
It’s really not uncommon in the corporate world of payroll, so it doesn’t fill me with terror that Random House is doing it. Actually, I’m surprised every time I see (in this day and age) a non-union company that still offers pensions to their employees.
Most simply offer 401k matching – and 6% match isn’t bad.
TBH I could go on and on about how health-care is probably going to go the same way – changing from the employer simply paying for the majority of it to the employer handing you a flat dollar amount (aka John Mccain’s health care plan) and you getting screwed with the difference… but I suspect that my nerdiness is showing and I’m only interesting myself.
Not a death knell, though. It’s an extremely expensive benefit and usually one of the first things to go when the company is looking to cut costs.
Nov 21, 2008 @ 08:31:43
The company that I used to work for froze our pensions in the 80′s. They then offered us a4 01k plan. My husband’s company did the same thing back in 90′s and offered a 401k plan also.
We have a HMO and our visit to the doctor jumped from $10.00 to $25.00 an office visit about three years ago.
Nov 21, 2008 @ 14:30:15
I think what bothers me more is that “Celebs are getting paid million dollar advances on books that will likely never sell out their advance”
Nov 23, 2008 @ 19:11:18
I agree, December. How many mid-list and debut authors could they have bought instead? How much could have been spent promoting these less famous authors’ books? I avoid mega-advance celebrity books not only because they’re usually crap but also on general principles.
Do any other publishers still pay pensions? I’d love to give them my business instead.
Nov 24, 2008 @ 03:02:38
The celeb comment bothers me as well. Most consumers know that say, Britney Spears’ mother isn’t a good parent. Hence they’re (me included) not going to club people to get to her new parenting book. Same goes for Angelina Jolie, Omarosa, etc. The pub houses should really think these decisions over. Gone are the days where the general audience doesn’t know a thing about a celebrity. We see the real them every day now. Not to say that these pub houses shouldn’t pub celebs, but to pretend like they’re a selling powerhouse is a bit rediculous.