Regional newspaper owners have decided to close a pension scheme for employees after being told that they would need to radically increase their financial contributions in order to meet future pension obligations.
The Regional Newspapers Association of Ireland (RNAI) voted "overwhelmingly" to end the defined benefit scheme after receiving advice from actuary Mercer that it would need to increase contributions from 6.9 per cent of salary to more than 18 per cent.
The scheme, which caters for 220 journalists at 50 titles across the State as well as a number of retired journalists, had been designed to provide a two-thirds pension of a notional €25,000 salary on retirement.
Ger Walsh, president of the RNAI and chief executive of Independent Newspapers' regional titles, said the scheme was currently fully funded but this had slipped from a position in recent years where it had been 123 per cent funded.
He said the association had taken a prudent decision to wind up the scheme while it was still fully funded in order to protect existing pensioners and ensure that working members would have close to the full existing benefits preserved.
The trustees of the scheme will be informed next week and the scheme will then begin the formal wind-up process.
The National Union of Journalists yesterday condemned the move to close the pension scheme in a "lucrative" sector like the regional press where profitability could be gauged by the high prices commanded by groups in recent acquisitions
It also accused the newspaper owners of "bad faith" in trying to brief members yesterday on alternative pension proposals "in flagrant breach of commitments given by the RNAI representatives and a clear attempt to pre-empt the industrial relations process".
Mr Walsh said Independent Newspapers, which with Thomas Crosbie Holdings and Johnston Press, are the largest players in the association, felt it had a duty to "inform employees of what proposals would be put in place now that the decision had been taken to wind up the current scheme".
He said a replacement defined contribution scheme - where the ultimate pension paid depends on the level of contribution and the investment performance of those funds - would be more costly for regional newspaper employers than the existing scheme had been.
