An Irish publishing company has agreed to pay €70m into two defined benefit (DB) schemes to end a long-running dispute over their future funding.
Independent News & Media (INM) struck the agreement with the schemes’ trustees last week, according to a joint statement from both parties.
The company and trustees said INM would pay the deficit reduction contributions agreed in the schemes’ 2013 valuation, as well as supplementary payments “to ensure pension pots… are no lower than as at 2013”. The company has also made “special provision” for members aged 62 or over who are yet to retire.
The Independent Newspapers (Ireland) Limited Contributory Pension Plan and Independent Newspapers Management Services pension scheme are both to be wound up as part of the agreement.
INM operates defined contribution (DC) schemes, and in total said it was projected to “invest” roughly €115m into all its schemes – including the new €70m arrangement – by 2023.
The case grabbed headlines in Ireland, not least through coverage from the Irish Independent newspaper, owned by INM. Initially, the company had planned to wind up the schemes without closing their deficits, transferring members to DC schemes. The Independent reported that this would have led to future retirees losing up to 30% of their expected benefits.
In Ireland, there are currently no laws requiring companies to fully fund their schemes when winding them up. The INM case received political attention and led to the introduction by politicians of a range of proposals for the protection of DB schemes and members. These are due to be debated by parliament’s Joint Committee on Social Protection later this year.
In the joint statement, INM and the trustees said: “These pension changes are not unique to INM. Many companies, including other media organisations providing DB pension schemes, have changed from a DB to a DC model.”
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