Express Newspapers has told staff it is proposing to freeze its final-salary pension scheme at the end of the year amid fears that it was too exposed to hedge-funds.
Just under a third of staff are in the pension fund which was set up in 1988 and pays out a proportion of final salary, based on years served with the company.
The Express group now wants staff in the fund to move over to the Prudential money-purchase scheme – which staff who joined the company since 1997 are on.
Such schemes are seen as being much inferior to final salary ones because there is no guarantee over the size of pension.
For those who switch from the 1988 fund, the company says it will pay 8 per cent of salary into the Prudential scheme (it currently pays 16.9 per cent into the 1988 fund) while staff will pay four per cent.
According to the Express Newspapers NUJ chapel, the 1988 pension fund had a £55 million deficit as of June this year.
The NUJ chapel said in a newsletter to staff: “We have told the company that while there is unprecedented volatility in the financial world this is the wrong time to change our pension arrangements, partly because a realistic valuation of the fund’s assets is currently impossible.
“We are also worried by reports that two or three years ago the trustees were pressured to adopt a more aggressive investment policy to include hedge funds.
“We have been told that 15 per cent of the fund’s assets are in hedge funds.
“We will be asking the management how much was invested in those hedge funds and what their current value is.”
The chapel said: “A routine, official valuation of the entire fund is required and scheduled for April 2009. We are told that the trustees will have to agree to change the rules of the fund to allow the 1988 fund to be ‘frozen’ so the 60-day consultation period is important for all members to let their views be known.”
The pension fund move comes as Express Newspapers continues to consult with staff over proposals to make around 80 journalists redundant, mainly sub-editors, as it introduces new technology which will see reporters input stories directly to the page.
In 2006, Express Newspapers proprietor Richard Desmond paid himself £40.6 million – much of which went into his own pension pot.
Former executive chief sub editor of the Daily Express Alastair McIntyre, who retired last year, told Press Gazette: “People are very naturally concerned and, in view of the planned redundancies, do not trust Desmond to do the decent thing. Many of the sub-editors who are being targeted are in their fifties and sixties so the pension fund is vitally important to them.
“If the chairman doesn’t want to support journalists and give them some respect, why does he want to run four newspapers? We want to be shot of him and wish he would sell the papers to someone who does give a damn.
“After the Maxwell scandal people thought their pensions would be safe. Now they are not so sure.”