MLB owners can cut pensions for non-uniformed employees

Patrick McDermott

The owners are catching some heat for their decision to allow teams to cut pension plans.

In a move that has been called "malevolent," the owners of Major League Baseball have voted to allow themselves to cut pension plans for non-uniformed employees, according to ESPN's Adam Rubin. No team has made such a move at this point, but the fact that the possibility exists comes across as questionable to experts.

Rubin interviewed Joel Maxcy, a labor economics expert at Temple University, and Maxcy summed up the maneuver rather disparagingly.

"... pension reductions are sought particularly when firms face financial distress. However, the MLB owners' action, given their current financial situation, the quiet vote, and that the lowest-paid group is the one that loses out, seems especially malevolent."

MLB's chief operating officer, Rob Manfred, attempted to deflect the concerns that arose from the decision.

"The fact of the matter is that the structure of one's pension, and the appeal of that pension to employees, varies greatly depending upon the makeup of your workforce. We have traditionally had defined-benefit pension plans in baseball, but a lot of young people would rather have a defined-contribution plan [401(k)] ... So I just don't think it's so simple as to boil it down to there's a bunch of money and they're taking away people's benefits. "

Manfred went on to reiterate the fact that no team has made any changes to date, and that changes in general were not guaranteed to take place. He cited the owners' desire to offer competitive and desirable packages to their employees.

Rubin specifically cites another source that sees Royals owner David Glass as likely to "reduce or eliminate employees' pension benefits." No current pension plans will be affected by the change, but future employees for MLB teams might not be in a position to receive pensions. Additionally, the players will not be affected at all.

There are varying expert opinions on whether or not 401k plans are preferable to traditional pensions, however, the change is being met with a certain degree of initial dissatisfaction due to the fact that such a maneuver is typically executed by companies in he midst of "financial distress" -- which is clearly not a reasonable way to describe Major League Baseball.

Teams saw record levels of revenue last season, and that trend is expected to continue as teams continue to sign massive new TV deals.

The employees that the change could affect include secretaries, scouts, front-office executives, and minor league staff.

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