Record Publisher Proposing to Close its Final Salary Pension Scheme

Staff at the Daily Record and Sunday Mail newspapers are being told by their employer there is to be a change in their pension arrangements which will make them at least less sure what they will receive when they do retire, if not worse off.

The general secretary of the National Union of Journalists, Jeremy Dear, is expected to be meeting the papers' publishers, Trinity Mirror, about proposals to replace the company's final salary pension scheme.

The final salary pension scheme involves a portion of a person's final salary being paid to them as a guaranteed annual pension, depending on how many years service they have given. It is understood it had, six years ago, been closed to newly-appointed staff. The alternative – involving contributions from both the employer and the employee – pays out depending on how astutely it has been invested.

The proposal affects staff across all the Trinity Mirror newspapers portfolio. It is believed they were informed late on Friday afternoon.

Said an email to staff: ”The cost of paying for the defined benefit schemes is putting an unsustainable amount of pressure on the group’s finances. The combined deficit (that is, the shortfall of assets compared to the estimated cost of the benefits) of the defined benefit schemes stated in the group’s accounts has risen from £37 million in 2001 to £275 million at 28 June 2009, despite extra contributions from the group of £259 million over the same period.”

If implemented, pensions will be calculated as a combination of whatever has been accrued thus far from the final salary scheme plus whatever has been generated using the new system.

Says Paul Holleran, Scottish Organiser at the NUJ: “A decent pension is part of the terns and conditions of employment as far as we are concerned. That means the benefits of a final salary scheme are something we should be fighting to protect as much as we would for pay and other conditions.

“The fact that Trinity Mirror are scrapping their final salary scheme is an indictment of the present management. At least with Robert Maxwell he was exposed as a crook for dipping into the pension fund. This mob have just mismanaged it and underinvested during a period of massive profits and their response to having allowed huge black holes to appear in the fund is to scrap it. It is pathetic and a disgrace.”

He added: “Obviously there will be consultation for people facing this bad news but it is a fait accompli. However, we will be advising members to take independent financial advice before they do anything else.”