Newsquest plans to axe pension scheme
11 November 2010
Newsquest bosses have confirmed plans to shut the group's final salary pension scheme to new accrual. The NUJ has them condemned for "arrogant ignorance".
The group's chief executive Paul Davidson gave notice in letters to individual members that the scheme would end future pension growth on 31 March, 2011. He said he wanted to thank members "for your support of the company and your understanding that we had to make a difficult decision".
The decision was made despite a strong case put by the NUJ that the scheme could be kept open as a key benefit to prevent future poverty for Newsquest staff in their retirement. Detailed actuarial advice obtained by the union showed that the calculations underpinning the valuation of the Newsquest fund led to unnecessary volatility which in turn put pressure on the company to act.
A new draft valuation of the fund drawn up for the company, purported to show an overall deficit of £123million. However, requests made by the NUJ – and individual scheme members – to the company and trustees to make this available were refused ahead of its official publication next year – after the scheme has closed.
Newsquest's decision comes as new official figures showed that UK defined benefit pension schemes bounced back into the black in October with a collective surplus of £13.5 billion. The figures from the government's Pension Protection Fund showed that the position had reversed from a £20.4 billion shortfall the previous month as a result of improved gilt yields.
The NUJ's submissions to Newsquest showed that a number of actions could be taken to deal with the company's concerns and still retain the current benefit which only three years ago underwent a radical overhaul of contributions that saw staff forced to pay up to 10 per cent of their salary to retain it in its current form.
Newsquest shut the final salary pension scheme to new staff a number of years ago and set up a cheaper defined contribution scheme for them to pay into, but it attracts among the lowest company contributions in the newspaper industry. Those losing the more secure final salary scheme are being offered this as an alternative.
The NUJ has said that the company should now consult properly with the recognised trade unions about providing better, affordable retirement benefits for all Newsquest staff.
Chris Morley, Northern & Midlands Organiser, said:
"From the answers we obtained to detailed and challenging questions put to the company in the consultation over closure of scheme, it was patently obvious that bosses were hell-bent on swinging the axe.
"I believe the decision has been taken as a result of arrogant ignorance. We firmly believe that given the will, a way could have been found to retain the best elements of a defined benefit pension scheme, not just for those currently in it, but all those who have been excluded from it over the last few years.
"Now that Paul Davidson has made the board's position clear, the focus clearly falls on the inferior benefit left in its place. This is a profitable company that can afford to do much better and the NUJ will be pushing it all the way on this."