THE pension fund at North Yorkshire printers RR Donnelley is £22 million in deficit, workers and pensioners have been warned.

The company says a plan must be developed to close the deficit, and this could affect benefits paid out in respect of future contributions to the scheme.

But former employees have been told that payments already being made to them will not be affected - unless Donnelley's UK companies were to cease trading and benefits had to be bought from an insurance company with existing assets.

One Donnelley's pensioner from York has expressed concern over this issue, asking what would happen if, at some stage in the future, Donnelleys were to close its printworks at Flaxby Moor, near Knaresborough, and move production abroad. He said there were rumours among staff that this might happen. "Would that count as 'ceased trading'?" he asked.

The GPMU union, which represents many employees, has called on Donnelley's parent company to "plug the gap". Union spokesman Brian Brock said that otherwise workers might have to increase their contributions to the scheme, or lose the current "final salary" pension, which is linked to the pay they are earning when they retire.

The problems at Donnelley's, which moved several years ago from York to Flaxby Moor near Knaresborough, mirror the situation in many other pension schemes across Britain, which have been badly affected by the poor performance of the stock market.

Donnelley pensioners were informed of the difficulties this week in a letter from Keith Ruddock, vice-president (manufacturing) at Flaxby Moor.

He said a triannual fund valuation by the scheme actuary of the company's UK pension scheme had revealed there was a £22 million deficit between the scheme's assets and the amount needed to provide the benefits promised for contributions paid to date. He said the company was awaiting a decision on a course of action to close the deficit.

Updated: 10:07 Thursday, October 21, 2004