Human Capital & Careers

Random Closes the Book on New Pensions

Publishing giant, part of Bertelsmann, freezes its pension plan for current employees and eliminates it for new hires, while supporting its 401(k).
Stephen TaubNovember 21, 2008

Random House Inc., the world’s largest general-interest book publisher, has frozen its pension plan for current employees — and eliminated access to it for new hires.

“Effective Dec. 31, benefits in the Random House Inc. Pension Plan will no longer grow — but they will not be reduced,” a spokesman for the publishing house, Stuart Applebaum, said in a statement to the Associated Press. He also said that effective January 1, no new employees will be enrolled in the Random House pension plan.

The 83-year-old Random House did pledge to continue offering to match 401(k) contributions, up to 6 percent, according to the report. It had 5,764 employees at year-end, according to the Website of German media giant Bertelsmann AG, which acquired the publisher in 1998.

The action reflects a larger movement that accelerated in the 1980s among companies. Indeed, Applebaum conceded that Random House had been discussing whether to cut the pension fund for years.

The changes are being imposed after a change in management. In May, Markus Dohle replaced Peter Olson as chairman of the company’s worldwide operations. “Mr. Dohle’s planning and discussions about the company’s future [have] been and continue to be very interactive at all levels of the company worldwide,” Applebaum told the AP.