telent Pensions
The website for members of the GEC 1972 Plan
telent Pensions
The website for members of the GEC 1972 Plan
Note. The day before this meeting, a training session was held for the new PCC members. This was followed by a presentation by Chris Holden (the Trustee chairman) regarding the Pensions Corporation situation. The content was confidential to the PCC reps.
C Clark (pensioner), R Dargie (telent), P Harris (telent), J Leaney (telent + MND), R Pittock (deferred), D Sawyer (deferred)
The Chairman thanked Peter Harris (TPO) and Peter Johnson for arranging today's meeting at short notice. Chris Holden and the Trustees were thanked for their work so far regarding the Pensions Corporation offer.
These were accepted without comment.
For the benefit of the new PCC reps, the secretary Ken Buckley explained the practice used in recent times for producing meeting notes for the PCC reps only, and then the actual minutes of the meeting. Tony Cobbe expressed concern at the suggestion that Pensions Office appeared to have the final say on what appeared in the minutes.
Kate Angliss noted that Gavin Martin and herself were also on the Employee Forum. Mick Elliott suggested that a line was drawn under the old minutes and that we start again with the new PCC. There were no further comments.
The Secretary noted the following:
This was given by Vic Webster.
For the benefit of the new PCC reps, he explained that there were normally six Investment Committee meetings per year, to which all Board members were invited, and also four Board meetings. .
Investment Committee meetings normally have two parts
In addition, when the committee is considering new asset classes and fund managers, directors are invited to attend presentations by potential new managers.
Pat Moloney noted that a major concern had been investments in Global Tactical Asset Allocation (GTAA), which, although known to be a very volatile fund, had recently dropped by 30%. Vic said that Goldman Sachs Asset Management (GSAM), the fund Manager, had said that were still undertaking a review of how and why this had occurred.. Peter Olney thought that if GS were unable to say how or why GTAA had suffered such a loss, then how would they know how to correct/avoid such a mistake. For that reason he thought they should be fired. Pat said that the decision was not to fire them there and then. Steve Radford thought it was difficult for the PCC to get intimately involved, and thought that the PCC should leave it to the Investment Committee to manage the situation. Pat also added that the PCC cannot instruct the Trustees.
Vic then went on to report on the most recent Trustee board meeting.
There was some discussion on how PCC reps might be best kept informed on any events which might arise at short notice regarding the Pensions Corporation bid for telent. For example, would teleconferencing be feasible for 29 PCC reps? Peter Dronfield asked the MNDs that if there was something of importance, could they email it on to the PCC, at their discretion? Tony Cobbe thought that MNDs first responsibility should be to members of the Plan, so MNDs should keep us informed, without any suggestion of a veto being imposed.
There was considerable lively discussion within the PCC as to what Board composition might be in the best interests of the Plan members, bearing in mind the current Pensions Corporation situation. Of particular concern was whether or not the three independent directors were really so, to which some PCC reps had opposing views. Mick Elliott noted that when he was a board member, he thought that all directors had acted responsibly.
If a new company took over, they could replace the Company Nominated and the Independent directors. Bearing this in mind, Pat Moloney noted that the 2004 Pensions Act requires one third MNDs on the board, but he believed this should be 50% MNDs. As the company would not agree to this, a legislative change would be required. However, he thought that the 2004 act allowed for this change to be made, and that we should be lobbying our MPs to get this change. Tony Cobbe noted that Pensions Corporation had already replaced the Independents at Threshers and Thorn. Pat added that if this happened, then the MNDs would immediately approach the Pensions Regulator.
Mick noted that our present PCC constitution was that MNDs were elected from existing PCC reps. He also reminded the PCC that Chris Holden had said yesterday that it would be helpful if the three existing MNDs were elected as from now for a further six month period. The PCC had thought that this should be for a further year, and then the recently agreed mechanism for electing MNDs would be opened up. It would still need to be decided whether the term served by the MNDs should then be for three or four years.
Steve Radford then formally proposed that the PCC should elect the three existing MNDs (Vic Webster, Pat Moloney and John Leaney) for a period of one year. Tony Cobbe opposed this motion, noting that in two weeks time, there may be six new directors, and he challenged whether the current status holds water. Roy Mills pointed out that the company had agreed with members the method of appointing MNDs, which was consistent with pensions legislation.
The motion was carried with a large majority of the PCC reps present. One of those against the motion, Tony Cobbe, wished to have his objection recorded.
A motion was proposed to express the PCCs confidence in the current Board. This was carried overwhelmingly by the PCC. Steve Radford expressed our concern if any were removed. It was hoped that any new company would respect their continued service.
The PCC also recorded its support for the present investment strategy and goal to meet the 2021 internal buyout target. (Secretary note. Peter Olney subsequently commented that he could not support the present investment strategy, because he did not know enough about it. However, he did support a funding strategy aimed at a 2021 internal buyout.)
At this point, Jackie Foulkes and Dawn Hampton left the meeting. Peter Harris, Peter Johnson and Simon Lee (all of telent pensions) joined the meeting.
Peter Dronfield and Ken Buckley, as the only nominations, were re-elected as chairman and secretary of the PCC respectively.
Peter Johnson noted that a Board member could be removed if his training or development was not up to speed. He added that Board policy is that a Board member can only be removed by the agreement of the Board.
Peter recommended to PCC reps the Pensions Regulator web site with its Trustee Toolkit presentation. (Secretary note - see http://www.trusteetoolkit.com/arena/index.cfm).
Robbie Robertson said that he did not having access to certain documents listed in the Trustee Toolkit. (See also section 12 re Documents).
Peter Harris (TPO) gave a presentation on swaps and their applicability to our investments. Following the PCC meeting, copies of slides used were emailed to PCC reps.
Peter explained that the objective of using swaps was because our investment strategy needed index linked investments. However, the market was mostly for fixed rate corporate bonds. Thus we started with fixed interest returns, and swapped these for floating interest returns with bank A. We then went to bank B and swapped the floating interest for inflation linked, to match the payments being made to pensioners.
Simon Lee noted that the whole idea was to immunise/insure the Plan assets against changes in inflation, and covers 80% of investments. He said that swaps were revalued on a weekly basis, so this gives the value of individual contracts at any time.
Peter Olney asked if there were risks in swaps? Simon said yes. Peter Olney asked a number of detailed questions on swaps. In response, Peter Harris suggested that Peter Olney had a separate discussion with Simon Lee and himself.
Tony Cobbe raised this topic as an agenda item. Working from a handout sheet, he discussed the topic under the headings of Documentation, Contacts, Meetings and Communication with Members.
Under Documentation, he listed some documents to which he felt that PCC reps should have access. Pat Moloney thought that we had access to most of these documents, but not the Escrow and Three Pensions Acts. Tony thought the ideal would be to have the documents available on the telent pensions web site (requested to Peter Harris of TPO), and also that as a fall back, the MNDs (or Secretary) had them.
Tony asked if there were any other documents which should be added to his list? Pat highlighted the Plan booklet, and he also thought that it might be helpful to have a PCC members handbook. Peter Harris (TPO) said that he would look at the documents which he thought the PCC should have, and send to the PCC secretary and chairman He would also note ones which he thought were not applicable. Vic Webster thought that perhaps there should be a separate PCC members web site.
Tony then went on to his Contacts list, which included organisations such as Watson Wyatt and the Pensions Regulator. Peter Harris said that he was happy to give the contact list details to the MNDs.
Tony then moved on to Meetings. He asked how a PCC meeting was arranged? Peter Dronfield said that we operated under the auspices of the Trustees. (Secretary note. Peter Olney has commented that as the PCC is a telent body, then it is ambiguous to say that we operate under the auspices of the Trustees). Vic Webster noted that we normally had four meetings a year, timed to follow on from the Board meetings. However, the chairman could call a meeting as required. There was then some discussion as to the implications of the PCC holding a meeting which was not supported by telent. Peter Harris (TPO) said that in normal circumstances, the company would do its best to facilitate short notice meetings (and encourage teleconference ones).
Tony asked if the sponsor could disband us? Peter Harris said that this would need a closer look at legislation and the terms of reference for the PCC. He would look at these. Tony noted that if the PCC was disbanded, there was still the time bomb of how MNDs would be elected in twelve months time.
Tony then went onto Communication. He asked how the PCC could communicate with 60,000 Plan members? Pat said Pensions Office could only act on a request from telent or the Trustee. We were not allowed access to members' lists.
Other methods of communication, such as the press or trades unions were noted.
At this point, Sergio, Roy Mills, Mick Elliott, Steve Radford, Peter Harris (TPO) and Simon Lee left the meeting.
In response to Graham Smith and Katy Angliss, the MNDs said that the PCC reps role is to communicate with members as best they can - in normal times with the use of the PCC minutes on the telent pensions web site, and also perhaps by PCC reps having individual emailing lists. Gavin Martin said that he was concerned how to get information to actives, particularly those in the field where they were not internet connected. Peter Johnson said by mail shots. With regard to the Pensions Corporation bid, Pat Moloney thought that the right time to communicate was when we had more information. However, Peter Olney disagreed, saying that we needed another pensions newsletter in October to reassure people of what was going on. Sharonjit said that Chris Holden would look at something as soon as possible. Vic Webster added that this should be through telent pensions office, posted to all members.
It was noted that the offer from Pensions Corporation to the shareholders closed on the 23 October, with 7 November as the date for any deal to be finalised.
John Kerr wondered how our Plan would be protected under Guernsey laws?
Chris Purchase wondered if the MNDs were confident that the Trustee could handle the current situation? Tony Cobbe said that he hadn't realised what a good job the Trustee did last year with the Fortress negotiations, whereby a second escrow had been secured.
Chris Walton thought that we should write to our MPs, or encourage lots of people to do so. He tabled a form of words which he thought might be appropriate.
Pat Moloney thanked the PCC reps for their support.
Assuming business as normal, this will be on the 9 Jan 2008 (the previous Board meeting due on the 5 Dec 2007). Peter Johnson said that Pensions Office would pursue the use of the room used today in the Welcome Centre at NCP, Coventry.
Tony Cobbe requested dates for all of the 2008 PCC meetings. Pat said that these could only be scheduled after the December Board meeting, when their own 2008 schedule would be known.
Ken Buckley PCC Secretary 7 November 2007