IRELAND – Publisher Independent News & Media (INM) has seen proposals to cut member benefits approved by Ireland’s Pensions Board, reducing the defined benefit (DB) plan’s deficit by €110m.
The Section 50 order – which will see some member benefits fall by as much as 39% – was granted as part of a restructuring as INM sought to lower its gross debt from the €440m reported at the end of December.
The cut in benefits, effective from this week, sees the company pass the final hurdle of the restructuring, having received shareholder approval earlier this year.
In a statement, it said: “Based on the estimated deficit on the group’s defined benefit pension schemes at 30 June 2013, the now approved proposals would achieve a reduction in the group’s pension deficit of approximately €110m.”
INM pointed out that the approval by the Irish Pensions Board of the pension restructuring satisfied one of the key conditions outstanding in respect of the final stage restructuring agreed with the company’s lenders.
“In particular” it added, “it clears the way for the preferred option for the company, a capital raise of a net €40m, to enable a further material debt reduction.”
Had the Pensions Board failed to approve the Section 50 order by the end of the year, the company would have been unable to raise further capital.
In a document from May outlining its restructuring plan to shareholders, the company said: “While such approval is not a stipulated condition to the implementation by the company of the capital raise, in practical and commercial terms, it is considered that certainty on the resolution of the defined benefit pension schemes deficit will be a prerequisite to attracting any new equity capital into the business.”
The company has been exploring how best to ensure “reasonable” pension expectations for all its members for more than a year.