S Requena-Rueda (Coventry), M Symonds (Pensioner), V Webster (Pensioner), P Wharton (Marconi Selenia).
These were agreed without comment.
Dawn Hampton said that it would now be possible to view the minutes on the Internet, as well as the internal Marconi Intranet, although there may be some modification for any company confidential information. See www.telentpensions.co.uk.
The MNDs view of the new pensions board Chairman, Chris Lewin, was that he was very dedicated to the pension plan.
With regard to the assumptions being made for forthcoming Triennial Review, Pat Moloney said that perhaps we need a better understanding of Discount Rates - could this be the subject of a future training session?
Roy Mills asked of Dawn how important now is Credited Interest (CI) to the remaining actives? Dawn said that virtually no actives retired last year on Basis 3, but a large number of deferreds could still be on Basis 3, albeit generally with small pensions. Roy thus thought that CI was now only really relevant to the SBS, and those people still in the SBS would perhaps be better off with the Merrill Lynch cash fund. Dawn said that the deferreds have been advised that they could transfer their SBS balances to either of the external providers, but a lot are still in the SBS. Mick Elliott added that professional advice in the past was that the Plan couldn't separate out the CI for Basis 3 and SBS, but it was now thought that this may be possible. There then followed considerable discussion on the pros and cons of leaving AVCs with SBS or transferring to the Merrill Lynch cash fund. Roy Mills couldn't see any risk in transferring from SBS to the Merrill Lynch cash fund, unless the latter interest rate fell below 2.5%. Andy Barker believed the Merrill Lynch cash fund was guaranteed after each year, but noted that a 0.65% annual management fee was applicable. Mick emphasised that people needed to look at the figures in the Annual Report and take professional advice on the pros and cons, as we cannot advise.
Andy Barker asked if a Market Valuation Adjustment (MVA) could be applied by Standard Life, for early retirement at age 55. Dawn took an action to check this. He also asked if Standard Life do demutualise, will an alternate mutual company be offered as an option, and would there be any financial loss if people transferred? Mick said the board were looking at this.
Ken Buckley referred to the letter sent out by Pensions Office to all scheme members regarding checks being undertaken to see if deceased pensioners were still being paid pensions. Dawn explained that Pensions Office sent names and National Insurance numbers of pensioners, including deferreds, to the Audit Commission, as part of the latter's National Fraud Initiative. They then send back the names of any deceased persons. Chris Walton said that this was a better method than in the past when people were asked to self certify that they were still alive!
This was presented by Pat Moloney
There was an Investment Committee meeting on the 9th September.
At this, an Investment Performance Analysis on the pension fund was presented by an investment consultant from Watson Wyatt. This detailed returns from the investment managers compared with their objectives for the quarter ended 30 September 2004. Presentations from Prudential M&G and Capital International were heard for their relevant portfolios .
There was a Trustee meeting on the 15 September. At this, a draft of the Annual Report and Accounts was presented, due to be issued shortly.
Trustee training was discussed as the new pension bill encompasses trustee training. There was further discussion of the pension bill as a pamphlet was presented by Sackers detailing the new arrangements regarding minimum retirement age rising to 55 due to the Finance Act 2004.
It was noted that a Joint Working Group has been set up to develop proposals for consideration by the Board of Stanhope Pension Trust Limited and the Board of Marconi Corporation PLC for the funding strategy to be adopted.
Some in house training for the directors was planned for February. A questionnaire had been prepared by Pensions Office to find out the directors' level of knowledge prior to this.
The non MND PCC members wanted to know what were the terms of reference for the Strategy Group. Sean Leahy asked if any committees, sub groups or working parties were set up, would it be possible for their Terms of Reference to be published and made available to the PCC, even if their actual deliberations could not. Pat said he would raise this.
It was confirmed by Pat to Chris Walton that the board is still made up of four company, four member nominated and three other independent directors. However, Pat pointed out that the proposed new pensions bill would require 50% member nominated directors. Roy Mills pointed out that this is still being debated by the Government, with changes still being considered.
Jackie Foulkes (Pensions Office) gave the above presentation. Handouts were given to PCC members. The topics covered included
Steve Radford raised the situation whereby if someone was seriously ill, their last year's earnings (which are used in the Ill Health pension calculation) may be lower than normal, perhaps because of short hours, no shift work or no overtime. How could such a person avoid being seriously disadvantaged? Dawn said that the effects could be mitigated if the Company notified Pensions Office of PRA (Pay Reduction through Absence). Steve suggested that approximately three months before any sick pay was exhausted there should be a review of the circumstances so that a person didn't get into a nil or deflated earnings situation without some early warning.
Mick Elliott wanted to know how a deferred pensioner would know that he could still claim an Ill Health pension when he had left the Company perhaps twenty years ago. Dawn said that there was no formal mechanism, but people do ring in and say that they want to start their pension due to ill health. Pensions Office would then advise of their options.
It was noted that there is no appeal on the rejection of an Ill Health pension application, but a person could at any time thereafter provide additional information and ask to be reconsidered.
John Leaney asked if the company could instigate Ill Health retirement for an employee? Steve said that the Company could not force a submission, although they might encourage an individual to agree to the application. John added that in such circumstances, the management must point out that they cannot guarantee the award of an Ill Health pension.
Roy Mills pointed out that an active employee could not leave service with both redundancy and an Ill Health pension. However, someone could leave with redundancy, and then apply for a deferred Ill Health pension.
Pat Moloney noted that the Plan Booklet had not been revised since 1997, and perhaps it was time for a new edition. Dawn said that it was basically still up to date, apart from the ERFs (Early Retirement Factors) for which an insert was now included. A new version will be produced in 2006 incorporating the changes which will have to be made in order to comply with the Pensions Act 2004 and the Finance Act 2004.
Peter Eykelenboom noted that when a schoolteacher retires, they have the option of paying into their pension plan for a further three years in order to boost their pension. Other PCC reps were not enthusiastic about this. Dawn said that in any event, it would not be allowed by the Inland Revenue, whereas the Teachers' Plan is a Statutory Scheme and so does not need the same IR approval.
Graham Band asked how the recent changes to the Early Retirement Factors (ERFs) affected the Siemens No Worse Off Guarantee( NWOG). For the benefit of those who were not aware, Andy Barker explained the concept of the Siemens NWOG, which related to the time when Plessey was taken over and split between Siemens and GEC. It was noted that Siemens were still applying the original terms, despite the ERF change.
Graham Band, (referring to the fact that the Plan had in recent times gone from surplus to deficit, according to the FRS 17 accounting rules), wanted to know what the future strategy would be for the Plan e.g. for investments, Marconi payments. Andy Barker explained that FRS 17 was just a snapshot at a particular time and based on different assumptions and pointed out that the company had already increased their contributions to account for the deficit.
John Leaney noted that according to a Sunday Mail survey, the Marconi Plan was in the top five over the last ten years.
This was planned for Wednesday 12 January 2005 at the Grange, Coventry. This will include a session on the Report and Accounts for 2003/4.
(Sergio to make the arrangements).
Ken Buckley
14/10/2004
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