21 Jul 2017 07:00
Joint Statement - Independent News & Media and INM Pensions Trustees
Dublin 21 July 2017: Independent News & Media ("INM") and the Trustees of two of INM's Defined Benefit pension schemes, Independent Newspapers (Ireland) Limited Contributory Pension Plan and Independent Newspapers Management Services, confirm that they have reached an agreement to commence wind-up of the schemes, following proposals put by the company to the Trustees. The agreement will bring certainty to the Company regarding its future obligations in respect of its principal Irish newspaper publishing business.
Under the agreement INM will make phased contributions amounting to over €50m, between now and 2023, into Defined Contribution pension schemes for members of the two Defined Benefit pension schemes upon wind-up. The agreement will ensure that all of the deficit repair contributions contained in the 2013 Funding Proposal are guaranteed to be paid. In addition the company has agreed to make further supplementary payments to ensure pension pots (Transfer Values and deficit repair) are no lower than as at 2013 and to make a special provision for those closer to retirement over the age of 62.
In total, INM has committed to pay over €70m in respect of members of these DB schemes in the period, 2013 to 2023. This is in addition to the 5% of issued share capital transferred to compensate members whose pension entitlements had been reduced as a result of the 2013 restructure.
Under the new agreement, each member will have their own ring-fenced Retirement Account within the Defined Contribution pension scheme. This will give all members greater security and control over their pension savings, in a far more sustainable pension arrangement.
Details of each member's pension pot and entitlements under the new agreement will be communicated to them in a letter issued over the next couple of days. Information meetings will also be held with INM staff and a Helpline, operated on INM's behalf by Mercer, will be made available to all scheme members.
INM will continue to make substantial pension payments to its remaining schemes and is projected to invest c€115m in all schemes between 2013 and 2023.
There is no change to INM's dividend policy. The agreement with the Trustees will enable the Company to re-engage with its capital restructure plan as submitted to the shareholders at an EGM in December 2016. Among other matters, the capital restructure plan placed before shareholders would ensure any future resumption of normal dividends by the Company would be payable out of future earnings. The Company is pleased that any eventual application to the High Court will be unopposed by the Trustees.
These pension changes are not unique to INM. Many companies, including other media organisations providing Defined Benefit pension schemes, have changed from a Defined Benefit to a Defined Contribution model. Over the last ten years the number of Defined Benefit schemes in Ireland has reduced from circa 1300 to circa 600.
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