Independent Newspapers change to defined benefit scheme

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billwinters

Guest
Hi,
I was a member of Independent News and Media PLC for over 40 years and was made redundant last year. I have been told that I can't access my defined benefit pension until I am 65 and I am a few years off that now.

Yesterday (11th Sept) I received an undated single-page letter in the post. This informs me that the defined benefit scheme as it currently exists is only 77% solvent. There is a need to move existing members and benefits to a new scheme (no detail of this is provided!) and the existing defined benefit scheme is to be closed to new members. My consent is needed for such a move and this consent (signing of letter of invitation) is to be returned no later than 14thSept, a ridiculously short period of time.

The letter stresses that this new scheme will protect the benefits of the existing members, which to me implies, as it is probably intended to, that the existing scheme is somehow insecure. Googling it has produced the following link which contains almost as much info as the letter I received.
[broken link removed]

Nowhere in the letter is it stated that the new scheme will also be a defined benefit scheme, and although this has been confirmed to me (verbally) by the designated pensions contact in the Independent, my fears are not allayed. My question really is this: since I am in a defined benefit scheme, surely it's up to the employer to worry about whether the scheme chosen is solvent and not my concern.

Should I sit tight and not sign? What questions should I be asking?

Thanks and Regards,
Bill
 
It might be scant consolation but there are many large companies in this country right now with large deficits on their DB schemes, AIB and Bank of Ireland included. The cost of this type of scheme has increased greatly in recent years due to low interest rates and increased life expectanct (as people are living longer, pensions have to be paid for longer). The reason for closing off the scheme could be to stop the deficit incrasing further.
The DB scheme is a large financial liability for the Indo Group and replacing it with a DC scheme means that they can put a cap on the cost of providing pension benefits to their employees.
 
"The DB scheme is a large financial liability for the Indo Group and replacing it with a DC scheme means that they can put a cap on the cost of providing pension benefits to their employees."

Does similar logic apply to salary costs?
 
The Indo unions are kicking up about this big time. It has been referred to the National Implementation Body, set up by the Government a while ago to troubleshoot industrial relations problems before they escalate. This body has particular new procedures to deal with pension disputes - more companies are expected to seek to jettison their defined benefit schemes in the coming years.

My understanding (warning: I am somewhat familiar with this but not expert) is that the plan is to deprive new entrants of the defined benefit scheme, but that this is not intended to affect those already in the scheme. Not sure but your union would know this, or the company might tell you.

And as regards the date, others kicked up about the short motice to and I saw an Independent Newspapers sokesman quoted in The Irish Times recently saying this is a target date, implying it was not a final deadline beyond which they would wreak all manner of retribution on you.

That's just the best of my knowledge. You should really contact the company and union to find out the detail of what is being proposed.

Hope it goes well.
 
Thanks for all the help on this guys. I have been onto my union rep; I didn't sign up for the Thursday deadline and I am not going to do anything more until I find out more about what this new scheme entails. I have contacted the trustees in this regard.

Incidentally, this is a very interesting link [broken link removed]
which describes how certain companies e.g. IrishIndo, eircom, Barclays avoid including their defined benefit deficit (1.1 billion in Barclay's case!!) when doing up their balance sheets.

Rgds,
Bill
 
Hi Bill,

Did you speak to the pensions board? They are very helpful. As far as I know you have a deferred pension and that there is leglislation to protect deferred pensioners. You should check with the PB what the exact situation is?

aj
 
Hi there
I would advise you to contact the trustees of the pension scheme. They have responsibilty to all members of the scheme, regardless of whether they are current or former employees. It would appear to me that you are being asked to make a decision without sufficient time or information to check your options. The Pensions Board would not take too kindly to this kind of bullying. I would also advise you to make sure that whatever contact you make, you follow everything up in writing to the relevant people, amnesia in these cases can be extraordinary by advisers, administrators etc! The company ultimately can wind up the scheme but that would be really drastic and hopefully will not come to that.
 
I notice from the Sunday Times that the [broken link removed] has taken an interest in this case.
The Pensions Ombudsman investigates and decides complaints and disputes involving Occupational Pension Schemes and Personal Retirement Savings Accounts (PRSAs). He is completely independent and impartial.
Click to expand...
Paul Kenny is the Pensions Ombudsman. Mr Kenny was appointed Ombudsman on the 28th April 2003, by Ms Mary Coughlan, TD, Minister for Social and Family Affairs. His Office can be contacted by phone at (01) 647 1650 or by email at: [email protected]
Click to expand...
 
Bear in mind that said ombudsman had a long and successful career with one on the major pension consultancies in Irish market - so I would not bet the house on that "impartiality"!
 
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