Irish Times to close defined benefit pension scheme

Staff at The Irish Times were briefed today on impending changes to the company's occupational pension scheme.

The company said it had decided to wind down and close the existing defined benefit scheme and replace it with a defined contribution model.

Managing director Liam Kavanagh said the scheme was currently 95 per cent funded. He said the company will bring the scheme up to full funding and invest a further sum to try to bring transfer values for current staff up to 107 per cent of the minimum funding standard.

Where transfer values amount to less than contributions already made by staff members – a factor affecting mostly younger, recent employees – the company has said it will make sure that everyone receives at least the level of contributions already made into the scheme.

Deferred members of the scheme – who have left the company but not yet retired – will receive a transfer value of 102 per cent of the funding standard. The difference is accounted for by revaluations which have advantaged deferred members compared to active serving staff.

Retired staff will continue to receive their pensions but will not receive any future increases.

A gain-sharing scheme will provide for additional pension top-ups for staff in future years if the company hits certain profit targets.

Under the proposed new scheme, existing staff can choose to contribute between 4 and 8 per cent of gross salary, with the company paying between 8 and 12 per cent on a sliding scale. Contribution rates can be adjusted to take account of changing financial circumstances.

Staff currently over the age of 55 will be able to opt to a higher 10 per cent contribution with a further 15 per cent coming from the company.

Staff will also be able to work to the age of 66, if they choose. At present, The Irish Times has a mandatory retirement age of 65.

The proposal has yet to be agreed by the trustees of the scheme. Staff are expected to vote on the proposal in a ballot next month.