Sunday 25 August 2019

INM denies payout to shareholders coming after pension closure

INM chief executive Robert Pitt and chairman Leslie Buckley Picture: Collins
INM chief executive Robert Pitt and chairman Leslie Buckley Picture: Collins
Dearbhail McDonald

Dearbhail McDonald

Independent News & Media (INM) has discussed proposals with trustees following its recent decision to close its defined benefit pension schemes, insisting its closure will not improve the cash position of the company.

Older members of INM’s defined benefit (DB) pensions schemes could see their expected retirement income maintained at up to 90pc of their restructured pensions under the proposal.

INM, which publishes and the country’s leading newspapers including the Irish Independent and ‘Sunday Independent’, has faced criticism amid claims that it was seeking to walk away from the defined benefit pension schemes, which the company’s management said is unsustainable.

Without extra funding, plans to wind up the schemes would have seen future pensioners lose 30pc of their expected retirement income.

The pensions of hundreds of DB members had already been cut by some 40pc in 2013 when INM restructured its schemes.

Talks were held last Friday between management and the trustees, who have asked INM to contribute €12m into replacement DB schemes and give special consideration to members aged 62 and over.

On Monday night the company confirmed that it had met with the trustees who will on Tuesday meet with the Pensions Authority.

INM’s board, chaired by Leslie Buckley, meets on Thursday.

In a statement, INM moved to address what it described as some “inaccurate” media comment.

“It is not and never has been the intention of Independent News & Media to renege on the agreement with the pension trustees in 2013,” said the company.

“INM has and will continue to make a significant pension funding contribution of €11.1m per annum from 2013 to 2023. The total investment across both the defined benefit and defined contribution schemes since 2013 is €35m. The total projected investment from 2013 to 2023 is circa €115m.  

“Any funding being made under the defined benefit schemes will continue to be made to the defined contribution scheme.”

Last week Mr Buckley led a stormy EGM where members of the DB schemes strongly opposed the passing of two resolutions aimed at cleaning up INM’s balance sheet.

The resolutions were carried overwhelmingly by investors including businessman Denis O’Brien (29.88pc stake) and Dermot Desmond, a 15pc shareholder in INM via his IIU Nominees vehicle.

“INM’s strategy, driven by the huge challenges it faces, is to reposition the business through acquisitions, it has no plans to pay dividends,” the company stated, addressing comment that the EGM would allow it to do so.

“It has consistently stated this position in all communications. Any suggestion that there is a windfall for shareholders arising out of the EGM decision is wrong. The capital restructure creates a nil-reserve balance in INM and any dividends will have to be paid from future generated profits.

“Dividend policy is reviewed by the board and annually at the AGM of the company and this will happen again at the next AGM.”

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