Newspaper staff to vote on strike

Cumbrian Newspapers staff are to hold a strike ballot over plans to close their final salary pension scheme.

The group, which employs about 300 staff, wants to close the final salary scheme to new and existing members.

The newspaper company says it wants to avoid the possibility of again having to eradicate a big deficit.

It is offering staff a money purchase pension scheme instead, but the National Union of Journalists (NUJ) says this will lead to lower pensions.

'Dismay'

The NUJ's representative at the company's Carlisle newsroom, Julian Whittle, said many members of staff had not expected such a move from their employer.

"The members feel anger, betrayal and dismay," he said.

"Using the company's own projections, the members will be substantially worse off - typically £4,000 to £5,000 a year worse off when they retire."

The strike ballot will start next week.

Cumbrian Newspapers is the UK's twelfth largest regional newspaper publisher, with five weekly and two daily evening newspapers.

Among them are the Cumberland News, the Carlisle News & Star, and the North West Evening News.

Deficit

In 2004 it made after-tax profits of £1.6m, on a turnover of £37m.

But it is currently in the process of making extra annual payments to reduce a pension deficit of £7.7m that was revealed by the scheme's regular valuation in 2004.

It was to avoid having to do this again which prompted the company's plan, according to finance director Andrew Swanston.

"The proposals are a way of ensuring the company is not put at risk by an unquantifiable risk in the future," he said.

"We have to avoid major risks to the business. It is in the interests of all staff that we maintain a strong viable business."

Unlike a final salary scheme, where the employer guarantees to pay a particular level of pension, in a money purchase scheme the members build up a personal pot of money which they then use to buy a pension when they retire.

The problem for them is that in doing so they absorb all the risk of possible poor investments.