Approved by the board of trustees of Augsburg Fortress on Dec. 18, the move affects 500 participants--retirees, former employees not yet retired and current employees, company officials said. Not affected by the decision is the company's current retirement plan--a defined contribution plan--in which Augsburg Fortress' current employees can participate. Approximately 150 current employees are enrolled in that plan.

"This was a very difficult decision for both those of us on the administrative committee and the board," Beth Lewis, president and CEO, wrote on her blog. "There were no good choices. It did not seem fair to us to allow 60% of those in the plan, including some who have worked many years here, to receive nothing, which is why we had to take this difficult step."

As of Dec. 31, the plan's retirement benefit obligations totaled about $24.2 million, but the plan's assets were only $8.6 million, Augsburg Fortress said. The company said other options to fund the shortfall were considered, such as trying to find sources of external funding, declaring bankruptcy and selling company assets or doing nothing at all.

Last April, Augsburg Fortress closed nine bookstores in a move by the company to shift its publishing emphasis as part of significant changes to its operations.

• Prev
• Next