Throughout his nearly 20 years writing a personal-finance column in the Washington Post, Albert B. Crenshaw has lived like a personal-finance columnist. He’s famous in the Post newsroom for carrying his midday meal in a black, domed industrial lunchbox that dates to 1953. Crenshaw once wrote a column about how much money he saves by making use of his postwar pail. He came away scandalized by how much a slice of bread was costing him (16 cents).
So the penny pincher got himself a breadmaker, which reduced the per-slice cost to five cents. This calculation includes inputs such as the cost of the machine and the electricity to power it. “I have a capital problem with the breadmakers,” says Crenshaw. “They’re not very durable.”
The columnist also knows how to get every last penny of value out of his possessions. “The guy doesn’t spend money,” says business columnist Jerry Knight. “He bought a couple of new shirts and ties last year, and people noticed.” (Crenshaw knocks down a rumor that he wore a college-era blazer in the Post newsroom.)
Crenshaw’s obsession with maximizing his earnings has fed a quirky learnedness in all aspects of tax law and retirement plans. Learned enough, anyway, that his colleagues have realized there’s a better pipeline to portfolio wisdom than Google. “Everyone here relies on Al the way our readers rely on Al, which is to help them intelligently think through the financial choices they have to make in their lives,” says Steven Pearlstein, yet another Post business columnist.
These days, many of the folks streaming over to Crenshaw’s desk share a certain demographic profile. Veterans of Post journalism, they have at least 10 years of service under their belts, are at least 53 years old, and have received an early-retirement offer from Post management. About “two dozen” colleagues, says Crenshaw, have come to him for advice on the retirement plan, which is comparable to a similar Post initiative in 2003. “Eight to 10” of those, says the columnist, have requested Crenshaw’s Extended Consultation Plan, which involves a deeper discussion of the offer’s impact on potential retirees. Eligible Posties have until May 30 to make a call on the offer.
The questions aren’t too hard to address, because Crenshaw himself has received the early-out offer as well. He started at the Post in 1972, bouncing from jobs on the national desk to the Real Estate section and winding up with the personal-finance column in 1987.
To Crenshaw’s editors and fellow reporters, those 34 years of experience make for a valuable newsroom resource. “Whenever I have a tax question, I ask Al. Or if I want to know about pensions, I ask him,” says staff writer Jeffrey Birnbaum, referring to questions about stories he’s writing. “He really can be relied on for good, solid information.”
To the Post’s bean counters, on the other hand, those 34 years mean, in essence, dozens of raises, compounding a salary that they’re eager to unload. In so many words and figures, the Post early-out plan says, Please leave. “It’s personal,” jokes Knight.
Here are the enticements that the Post is offering to get Crenshaw out the door:
•two years’ pay;
•access to full pension benefits at his current age, 63—in fact, under the plan, Crenshaw would get a higher pension than he’d get if he were to reach 65 as a Post employee;
•a payment of nearly $8,000;
•and access to a medical insurance plan until he reaches 65.
Crenshaw assesses the packages with the same sort of logic that prevails in his column, Cash Flow. “It’s a very generous offer,” says Crenshaw. “They will give me two years’ pay if I work two more years. And they will give me two years’ pay if I don’t work two more years.”
What looks like bundles of cash to Crenshaw and his contemporaries is pennies to the Post. The funds to pay for the early-outs don’t come from the precious newsroom budget but rather from the company’s retirement kitty, which is as bloated as a Style-section essay.
According to the Washington Post Co.’s annual report for 2005, the pension fund had assets totaling nearly $1.7 billion and a benefit obligation of around $750 million, yielding an “overfunding” level exceeding $900 million. People who analyze pension programs for a living marvel at the gap between the company’s pension holdings and liabilities. New York–based Milliman consultants recently concluded a study of 100 large companies—from General Motors to FedEx to Sears, Roebuck—with Post-like pension programs. Not a single one of the firms had a “funded ratio” as high as the Post’s.
“The thing is, when you have that much surplus assets, you can provide incentives for employees—it doesn’t cost you anything from a cash point of view,” says John Ehrhardt, principal and consulting actuary with Milliman. Ehrhardt points out that federal law circumscribes how the Post Co. can mete out the cash. “There’s nothing they can do with [the assets] except provide benefits. It’s not like they can take that money and buy pencils.”
Actually, the Post is buying itself something far more precious in this newspaper market—a dramatically shrunken newsroom. In March, the paper announced its intention to cut about 10 percent of its 800-strong editorial workforce. However, the retirement inducement is going to 141 newsroom employees, leaving the prospect of an even deeper reduction. “We have expanded a lot during my time as executive editor,” says Executive Editor Leonard Downie. “And therefore, there’s room to absorb this decrease by reorganizing the newsroom once we know who’s leaving.”
Downie reports that the suits at the Post Co. included him in deliberations on the retirement offerings. Did the top editor push for a sweeter, more newsroom-emptying set of inducements? He’s not saying. “I want each individual person to have the best possible retirement they can have, and we are also needing to downsize the newsroom,” says Downie.
Crenshaw says he’s a safe bet to participate in the downsizing. With his demonstrably low food budget, he’ll get along fine on the pile of retirement cash, his pension, and his nine income-producing properties.
Physically vacating the Post, however, may add some trauma to the transition. The columnist’s tax manuals, books, and reports have formed a paper hedge roughly 3 feet high by 5 feet long in his office pod. “I use the sedimentary system of filing,” he says.
And once he cuts ties with the Post, the former Cash Flow columnist will get to play out all kinds of liability-reducing scenarios. “I will certainly move my tax residence,” says Crenshaw, a District resident. —Erik Wemple