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July 26, 2006updated 22 Nov 2022 8:22pm

Industrial unrest over pension scheme freeze in Cumbria

By Press Gazette

Staff at Cumbrian Newspapers are threatening industrial action against proposals to freeze the company's final salary pension scheme for all members of staff.

In the long term, the NUJ claims, some staff could be thousands of pounds worse off under the new scheme after they retire.

Many companies have closed their final salary pension schemes in recent years to new members — including the Press Association and Trinity Mirror — but the NUJ claims that none of them has taken the step of closing the scheme to existing members.

Final salary pension schemes are based on employees' length of service, but CN is looking to introduce a "defined contribution scheme", which would instead be dependent on stock market performance and annuity rates.

NUJ president Chris Morley (pictured) met management on Tuesday to discuss whether a "decent" pension for staff could be offered.

He said: "It's come as a bolt from the blue. The company has acted uni- laterally and one of the points the union has made is that there was no attempt to flag up the problems with the chapels.

"Instead, they have gone to the whole workforce and said they are ripping up the promise they made when they started with the company and will have something vastly inferior. "In the long term, we have calculated — based on the figures the company supplied — that some people could be losing tens of thousands of pounds in their retirement. Someone with 14 years' service would be between £2,500 and £4,000 a year worse off when they retire, and if they lived to the age of 82, they would lose up to £69,000."

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But CN chief executive Robin Burgess, dismissing Morley's predictions, said to compare the final salary scheme with the new proposal was like "comparing apples and pears".

The company said the pension scheme had a £7.7 million deficit, but it is putting in £600,000 per year to eliminate the deficit over the next 15 years.

However, circumstances such as greater life expectancy and poor returns on equity were deemed too risky for the business.

Burgess said: "We believe the risks are getting higher. We accept the changes to our pension scheme are substantial. The arrangements we are proposing do have more flexibility and some people will want to pay in more than they do now. If they do, the company will match it up to certain levels and they will benefit from an improved pension.

"This isn't a cost-saving exercise. We envisage that it is probably going to cost us more. It's about assessing risks to the company. We've been advised if our present scheme ran on for 15 years, the size of the deficit would be such that, if we had a similar problem to what we have now, it could have a catastrophic effect on the company's finances. We are treating the whole company from myself downwards the same. No one would be left with a final salary scheme."

A spokesman for the NUJ's National Executive Council said: "The NEC believes the move is a betrayal of promises made to staff when they joined the scheme. It is also a denial of the chance of achieving a decent pension for future workers, and therefore we have agreed to support CN Group chapels in their efforts to keep a decent pension scheme, to make available monies from the union's £1m fighting fund as deemed appropriate to win a just settlement, and make common calls with Amicus to defend the final salary scheme."

CN said it would be putting together more information about what alternatives have been considered and the union will scrutinise those in the hope of agreeing "viable alternatives".

CN owns the evening titles News & Star in Carlisle and North West Evening Mail, as well as six weekly titles and a free title.

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