The owner of the Daily Mirror has come under fire over a controversial move to slash payments into its pension fund by £69m over the next three years – even as the deficit soared.
Pensions experts expressed surprise, with some urging regulators to investigate the decision. Ros Altmann, the director-general of Saga, said it was "certainly not normal" and warned that the pension scheme's security was, at least in the short term, reduced.
Trinity Mirror, which also reported a 38 per cent slide in profits to £74m yesterday, had been due to make payments of £33m a year to reduce the deficit, which has jumped by more than half to £230m from £161m a year ago. It will now pay in only £10m a year between 2012 and 2014 and defer the remainder.
Sly Bailey, Trinity Mirror's chief executive, rejected any suggestion that the move was a "pensions raid". She won the pension fund trustees' approval as she wanted to reach a separate, £110m refinancing deal with its bank lenders that was also announced yesterday. The refinancing deal will help it repay £168m of US private-placement loan notes due in the next three years.
John Ralfe, the independent pensions consultant, said: "Trinity Mirror is reducing deficit payments to its pension scheme for the next three years from around £100m to just £30m, so a US private placement can be repaid in full. The pension scheme is effectively being pushed behind these other creditors, who are being repaid first."
He added: "This action underlines the weakness of current pension regulation. What is the Pensions Regulator doing to make sure this does not create a dangerous precedent for other companies to push their pension scheme behind other creditors?"
A spokesman for the Pensions Regulator said: "We will scrutinise any reduction in contributions or other actions that increase risks to the scheme, and are prepared to take strong action where necessary."
Pensions are a sensitive issue as Robert Maxwell, a previous Mirror proprietor, stole £400m from the papers' pension funds.