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THE BOARD AT Ireland’s largest newspaper group has found itself on the wrong side of the news lately.
On Monday, Independent News and Media (INM) held an uncomfortable extraordinary general meeting (EGM) at Dublin’s O’Callaghan Alexander Hotel to seek shareholder approval for a reduction of share capital, which would lead to the company’s first dividend payments since the financial crash.
Outside, about 100 former and current Irish Independent workers, along with trade unionists and other supporters, gathered to protest INM’s decision to stop paying into a defined benefit pension scheme, which would result in roughly a 70% reduction to the pensions for former staff, many of whom are yet to reach retirement age.
Inside, things were just as turbulent. The group’s chief executive Robert Pitt and chairman Leslie Buckley had an unusually public boardroom row the week before, reportedly over the purchase price of Newstalk, the Denis O’Brien-owned radio station. O’Brien is also the largest single shareholder in INM.
Buckley tried in vain to avoid the pensions problem during the EGM, but the issue was understandably hard to ignore, especially for shareholder-pensioners like ex-business reporter Martin Fitzpatrick.
According to a report in the Irish Independent, Fitzpatrick called the decision to pull out of the pension scheme as “one of the most shameful decisions” he had ever come across in his 50-year career.
The whole story has shone a light on a growing problem in Ireland – defined benefit pension schemes, like the one at INM, are grossly underfunded. This week, we’re looking at how they could be a ticking time bomb about to explode.
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Defined benefit pension schemes promise a set level of pension at retirement, normally based on your service or earnings near the end of your career. The benefits, or payouts, are fixed, so the contributions have to be adjusted from time to time to make sure the correct amount is being gathered before payment.
However, it’s important to note that such benefits are not guaranteed. If the scheme’s assets are not sufficient to pay the benefits, and the employer can’t meet the shortfall, promised benefits can be reduced.
However this is not the first time the board at INM has looked to slice its pensions scheme – and that’s partly the reason why the workers are so outraged. In 2013, the group received approval from the Pensions Authority to substantially reduce members’ accumulated sums.
It led to about a 40% reduction to their pension pots at the time. One former Independent journalist wrote in a Facebook post that the workers accepted this “as a necessary measure as the company was on the verge of collapse”.
‘Cash rich’
Nevertheless, the financial situation for INM today is very different. In the 2015 financial year, the company generated a pre-tax profit of over €37.4 million after the first up-tick in revenue for years.
After selling its remaining stake in Australia’s APN News and Media in 2015, the company was also left with a significant cash pile – even after paying off its debts. That money was earmarked for acquisitions. First it bought business magazine group Greer Publications.
Then it snapped up a 50% stake in Cars Ireland, a classifieds website for cars. A few months ago, it announced it was buying Celtic Media Group, which publishes six regional newspapers in Ireland.
If approved, that will bring the number of INM-owned local papers to 20. And yet INM is still expected to be sitting on €86 million by the end of this year. A Newstalk acquisition would have put that money to work.
Investors will be keen to create value from that cash – especially after Davy analysts warned that the management’s ability to do so will “determine the future trajectory of the group”.
Ex-Independent journalists argue that they are being fed to the wolves by the “cash rich” company so it can free up this money pile and pay out dividends to shareholders like O’Brien, already one of Ireland’s richest few people.
Pensions time bomb
The INM problem has highlighted a worrying underlying issue in Ireland – other troubled defined pension schemes could be wound up too, with little warning. INM’s retirement obligations grew by more than €20 million in six months to €106.8 million by 30 June 2016.
This was largely due to low interest rates and a struggle to meet standards set out by the Pensions Act. Recent research by consultancy firm LCP Ireland found that the combined deficit in defined benefit schemes at Ireland’s biggest private and public sector companies surged by more than 160% in the first nine months of the year, despite a number of cuts to benefits and a reduction in contributions.
The combined shortfall more than doubled to almost €7 billion by November of this year. These growing debts put pressure on companies’ balance sheets and impact their ability to pay out to shareholders. Members of such schemes could stand to lose out on pension promises if companies struggle to fund them and come under pressure from investors.
Different to the UK
The INM situation has also highlighted the fact that there is no legislation in Ireland to protect pensioners when profitable companies decide to stop paying into their pension funds. In the UK, for example, it’s not possible for solvent companies to simply walk away from their pensions obligations.
The Sunday Times recently wrote that the Trinity Mirror newspaper group in the UK is in a similar situation as INM, however it didn’t have the option of simply wrapping up its scheme because “pension funding rules in the UK are far more stringent that in the Republic of Ireland”.
National Union of Journalists’ Irish secretary Seamus Dooley called on the Minister for Communications Denis Naughten to consider the pensions controversy when deciding whether to give the all-clear in INM’s acquisition of Celtic Media. Meanwhile, INM’s restructuring of its balance sheet will go before the High Court, where the separate pensions issue could rear its head as well.
Minister for Social Protection Leo Varadkar has said he approached the attorney general to see if he can intervene and ask the court to strike a similar deal as was done with Aer Lingus, where the company negotiated with trustees before going ahead with its sale to IAG. The outcome of how INM handles its pensions problem could set the stage for other funds in difficulty.
Written by Conor McMahon and posted on Fora.ie
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There should be a survey asking if anyone ever lied on a Journal survey
Just wait until you see tomorrow’s poll ;)
Interviewer. What are your weaknesses?
A. I speak my mind
Interviewer. ” that’s not a weakness ”
A. I don’t give a f… What you think
I had to lie, or I’d never got a job as a surgeon.
Benton to med student: ” so what do you want to be a doctor… It’s a common question of the interview.
Student ” I want to help people”
Benton “ugh…”
Student: I don’t know I just thought it would be cool”
Benton: “well at least that’s honest”
Student “so I should say that?/”
Benton “of course not!”
Unlike a lot of gen y (many of whom seem to b speeding towards 30 without ever having worked) I worked since I was 10 unbroken until 2011 besides my lc year, so I’ve never had to lie on the CV, but I’ve found one thing w/interviews…they are just a BS forum where you’re asked tired predictable questions and you give tired hack answers. If you give your interviewer outside the box answers (or god forbid honest ones) they are less likely to give u the job. To a lot of these drones in suits conformity and blending in is what they demand, which makes them look all the more ridiculous when they use buzz words like innovation, having rejected the very outside the box thinkers at interview you need to produce it.
If you follow the medical council reports most of our foreign doctors are struck off in their homeland or the UK or awaiting charges of misconduct…still the HSE is sure they are fit to practise lol
@Snorre
More than 50% of all foreign doctors in Ireland are incompetent or criminal? That’s definitely true, or you’re racist. One or the other but almost definitely the first one. Have some internet points to go with your smug xenophobia.
In all seriousness it works both ways,the amount of lies management spout, honesty isn’t always the best policy.
How do people think politicians get work????
By running for election.
An apathetic electorate?
Lying to the people to get elected?
I keep getting told I’m over qualified, what about dumbing down the CV ?
That’s really just a polite way of saying “I can see you’re perfectly qualified for the position, but I just don’t like your face”
Or ‘Can’t let this guy get hired, he’s smarter than me!’
Being told that you are over-qualified simply means they don’t want to pay you a lot and think that you might expect more than they are willing to offer.
And usually the person who says thatyou are over qualified should be awarded with a fist in the snot!
It’s a major insult if you are qualified for the jobto be told we are actually lookingfor someone dumber than you in my books.
Its not you its me…
Looking at the pole results i think people are still telling porkies lol
Don’t be too sure. Just because one person thinks it’s okay to do something doesn’t mean others think the same.
We tend to assume that all people behave the same way we do. That is regularly not the case.
Well from a person who sat in on many interviews over the years it was my job to hire people, and i can assure you that more than 50% of those i interviewed where at some point less than ” honest ” in some part of their cv in one way or another ! Just saying is all :-)
I don’t have too !!!
Ok ok I might have altered a date here and there.
I may have presented things in a favourable light, offered a casual reader the chance to draw certain conclusions which may not be entirely valid, been economical with the actualite or made material omissions.
Lied? Never.
I am a terrible liar, there’s no way I could get away with making up experience or qualifications! I have made some experience sound more relevant than it was, and invented hobbies because I can’t write “drinking and napping” as hobbies.
Alan Shatter… Is that really you?
“Lied” is such a strong word…”Bent the truth” is probably a better way of putting it.
Here’s the advice a 4th year lecturer game the class about writing a CV.
“Never tell a lie on your CV but never tell the truth either”
I’ve never had a problem with my cv it’s the interview that I have a problem with. Having social anxiety makes interviews really hard. Arrrgh talk about cringe! Practice makes perfect as the say :)
Anyone who lies on their CV is an idiot.
Well yea … An idiot would have to lie to get a job.
Indeed Glen, you’d b an idiot to not notice how many lies they expect u to tell to get in.
Ive never had to lie about education or experience cos I’ve been lucky enough to have oppertunity in that area but in interviews they seem to expect u to BS them, you’re sitting there thinking I know the answer u want me to give…I know its a hack answer u know it too”,,so why are we playing this game?
The easiest thing about telling the truth is that you don’t have to remember what you said.
Remember lies always come back to bite
I have a relative who said they knew Java when they didn’t even know what Java was beyond “something to do with computers). They’ve told me they regularly lie in interviews (they’re still looking for a job unsurprisingly)
To say I was incredulous that someone would claim to know Java in an interview with (less than) zero experience is a bit of an understatement.
I’ve never lied on a CV but I do have friends who are job hunting at the minute – they are well qualified nearing 30′s however both are getting married this year. One of the girls went to two interviews with her engagement ring on and was asking casually when she was getting married etc, never got either job. Was afraid the focus was on the marriage and therefore the employers might think babies are next. Took of the ring for her next interview and got offered the position. May be just coincidence but the other friend is now taking hers off too.
I had to do the same thing. First interview I went for with no ring on, got the job!
Sure Enda kenny was a roofer in London ! Now he’s running the country ! Definitely serious lies on his CV
Theyve ways of sussing u out. If u say you’re qualified in xyz or have xyz experience they will b able to tell from way u answer questions if you’re for real. Don’t say u worked somewhere if u didnt , u never know who knows who where. My sisters husband asked her to go thru CVS from his job other week cos there were applications for her type of position in his compny . By sheer fluke she came across someone she recently worked with who was on consideration list and was able to tell him she never held position she said she did in past job. You’re safer making a good snappy cover note to get noticed than or formatting the CV in a way that gets the info across in a short compelling way. Too much risk in lying.
It usually catches up on them in the end
Especially if they are unable to do a task that they stated on their CV.
exactly, and also might i add, people coming to this country often lie on their cv in order to get a job, very easy when you’ve listed a company 10,000 miles away. i know, i’ve shared with many and was even asked “what do you think? should put i worked in costa or start bucks or shall i put calvin klein jeans retail assistant here?, and they’d have up to 3-4 different cvs all carefully altered, one for cafes, one for retail, one for bar work and one for office work, ALL pumped up with this that and other crap. of course, when the employer feels they can exploit the situation, min.wage for long hours, no overtime, opportunity to shout and pile it on, they really don’t care, a 6 month trial and a but of quick training is worth it when it comes cheap and easy.
i’ve never lied on one, its a small place here, we don’t have that option.
The only people that lie of their cv are people that need to lie to get any job
Like everyone in government.?
Anybody who says in the voting poll they havin’t lied typing a cv is lying, everybody lies !!
Why do they lie? I never lied on mine, I never needed to.
It’s a 2-way street, employers lie to the interviewees too – is anyone concerned about that? I would like to see a survey on that.
Surprised at the poll. Has nobody else ever said they’ve conversational french/another language and just praying the interviewers don’t ask you to speak it?
Sins of commission – NO.
Sins of ommission – YES.
Did the people who are somehow working on this feckin island lie, is that the trick?
There was this fella doing an interview and the HR Manager said to him, “I am glad to tell you we liked your CV and you have done very well in your interview. Just one last thing, if I were to ask you what is your biggest weakness what would it be?” And the man said ” I have a problem with saying things out straight and I think I might be a bit too honest”
HR Manager : “I don’t think that being too honest is a weakness”
Man: “Well I don’t give a shit what you think”
Search YouTube for garabaldis corporate method.. That’s the employer I want.
I was lectured in UCD by a visiting lecturer whose PhD was false. Years later, they found him out! Basic qualifications matter (like for visiting lecturers or doctors/nurses), and employers are foolish if they don’t find out about important matters.
Sure. No experience like google and its stack overflow in the IT industry.
3,590 of those 3,592 no votes are fibbing
have your say