THE Gleaner company yesterday said that the proposed sharing of the $2.8-billion surplus from the wind-up of its pension plan will make it cash-rich whilst representing the largest pay-out to media workers in Jamaica.

The Gleaner’s portion represents $1.3 billion and was already recorded in its September-quarter results as a trade receivable, Christopher Barnes, Gleaner deputy managing director, told the Business Observer yesterday.

He added that that the pay-out would give The Gleaner investment options. The actual cash pay-out, however, awaits regulatory approval from the Financial Services Commission (FSC) and Barnes isn’t aware of a timeline.

“When we do finally get the money it will be administered properly and we will make the decisions in the best interest of shareholders,” he said before joking about buying his largest competitor.

The Gleaner made $574.5 million in pre-tax profit for the September quarter versus a $22.6-million loss in the similar quarter in 2009. The profit was due primarily to a portion of the pension recorded as income at $514.6 million for the quarter.

The remainder of the surplus, or $1.5 billion, would be distributed to members (past and present employees).

“It is the biggest pay-day in the history of media in Jamaica, and certainly one of the largest pension refunds in memory… it’s as if a giant Santa Clause visited The Gleaner just in time for Christmas,” noted Moses Jackson, former Gleaner employee and founding editor of the Business Observer.

“At the risk of sounding self-serving, I believe that the current Gleaner employees in part owe a debt of gratitude to the Jamaica Observer, whose presence in the market created competition for scarce journalistic talents and forced a realignment of the remuneration structure at The Gleaner,” added Jackson, who is also co-founder of the Observer Business Leader Awards programme. “The higher, more market-driven salaries that the employees have enjoyed over the past 17 years translated into higher levels of pension contributions.”

The Gleaner discontinued its original scheme in order to switch to a less restrictive scheme that in the worst of times would not force the company to dip into its savings to finance a deficit in the pension plan, as the original scheme would have required.

“We are not in the business of managing pension funds, we are in the business of media,” Barnes said about the rationale for changing from a Defined Benefits Pension Fund discontinued in July 2010 to a Deferred Contribution Pension Fund, which commenced as at May 2010.

The Gleaner stated in its financials that the “surplus in the fund has been used to enhance member benefits and the balance after the enhancement will be divided equally between the company and members of the fund”.

The Gleaner Group includes Associated Enterprise Ltd, Popular Printers Ltd, The Book Shop Ltd, The Gleaner Online Ltd, Selectco Publications Ltd, Independent Radio Company Ltd, Creek Investment Ltd and overseas subsidiaries, The Gleaner Company (USA) Ltd, The Gleaner Company (Canada) Incorporated, and GV Media Group Ltd.