READER’S DIGEST is known the world over.  The pocket-sized magazine was first published in 1922 by the Reader's Digest Association (RDA), based in Based in Chappaqua, New York State. 

In the 1990s, it was the UK best-selling magazine, with a circulation of around two million.  Today that has slumped to around 500,000.  And many believe that its days are numbered.

In America, the parent-company is currently emerging from bankruptcy.  According to the RDA, its problems in Britain have been caused by the UK Pensions Regulator who are not signing off a deal to safeguard its UK subsidiary's £150 million pension fund.  Consequently, the RDA says its UK operation may be closed down "within weeks".  

Reader's Digest employs 135 people in Canary Wharf, London, and in Swindon, Wiltshire.  They may all soon be thrown on the scrapheap.

For some time, Reader's Digest UK has maintained that it was unaffected by the RDAs problems and had "ample liquidity" and a "very healthy" balance sheet.  (The   pension scheme covers some 1,600 past and present employees.)  However, it now appears that the UK business has a "longstanding and significant" unfunded liability with its pension scheme.

As we’ve noted before “most workers regard pensions as a form of ‘deferred wage’, payable when one retires. Usually payments are made into a pension scheme on a weekly or monthly basis. What you ‘save’ during one’s working life is what one ‘earns’ during retirement.” 

The workers at Reader's Digest UK are rightly worried about this deficit in the pension scheme. However, this deficit is not the workers’ fault.  They don’t admisnister the pensions scheme – the bosses do.  The mismanagement of the pension fund - and any possible payment breaks that might have occurred when times where good – indicates how complacent the bosses were.  

Solidarity believes that this problem will be ‘solved’ in either of three ways:

Firstly, the RDA had previously come to an agreement with the trustees of the pension scheme and the Pension Protection Fund to resolve the deficit issue. (This agreement was part of the process by which RDA was expected to emerge from Chapter 11 bankruptcy proceedings in the US. It was also dependent on approval from the UK Pensions Regulator.)  Although, the UK Pensions Regulator indicated that it, "was minded not to" approve the company's clearance application, the US-based parent-company could honour its commitments to its British employees.

Whatever the outcome, the Readers’ Digest will not be the first media outlet to go to the wall.  Sadly, it’ll not be the last. 

Comments

Completely Blank

+1

 

 

It's a shame to see this happening. The Readers' Digest was always quirky, informative and even educational. Unlike many other publications it never seemed to have a political axe to grind. As is often the case, the workers whose labours made it the good read it was are the ones to suffer.

Saturday 06 February 2010, 19:25

Please login to post comments or replies.