Newsquest staff 'reeling' from pensions 'bombshell'

Members of the Newsquest national pension scheme are said by the National Union of Journalists to be "reeling" after the company "dropped a bombshell" late on Friday afternoon as staff were preparing to go home. According to an NUJ statement the scheme's 9,000 members received letters saying that due to a shortfall they were to be offered four options to remedy the situation.

They could increase their contributions (from 6 to 10%) to keep the same final salary scheme; they could pay in less for an inferior version; they could opt for money purchase scheme; or, of course, they could ditch their pension altogether.

The Newsquest letter claimed that the scheme is £65m in deficit. Though staff are expected to increase contributions over the next four years, the company said it will put in 12%, which is below what other comparable employers in the sector contribute.

If true - and, as of writing, Newsquest have failed to return calls about the matter - it's not surprising that the NUJ's northern organiser Chris Morley has responded to the news with a statement of condemnation, calling it "a sudden and shocking blow." He added: "In comparison to other company schemes, theirs [Newsquest's] is a relatively small deficit and does not warrant this sledgehammer approach."

Newsquest, which is Britain's second largest regional chain, is owned by the US media conglomerate, Gannett. It has 215 weeklies, and 18 dailies, boasting a total weekly circulation of 9.4m and 3.7m daily. Among its major titles is The Herald in Glasgow, the Northern Echo, the Bradford Telegraph & Argus the Southern Daily Echo in Southampton and the Brighton Argus.

It is difficult to know much about Newsquest's financial state because its figures are rolled into those of Gannett. According to a statement on Gannett's website dated June 18, Newsquest was doing considerably better than its American counterparts. The three main mentions refer to local advertising revenues arising 5.9%; classified results being significantly better than in the equivalent US newspapers; and Newsquest having experienced higher national advertising revenues. That's hardly a picture of a company suffering from poor health.

The NUJ claims that Newsquest began its three-yearly formal valuation of the company scheme in April but the results have not yet been published. Instead, the figures used by the company are based on those from a less detailed estimated value taken as part of the end of year accounts on December 31. The union says: "That leaves out from the figures the strong run that pension fund investments have been on since the beginning of the year."

When I called Newsquest's headquarters I was told that the appropriate spokesperson - presumably the group editorial manager, Margaret Strayton - was away today. But I have pressed for some kind of response from the company, not least to ensure that the NUJ version of events is true.