A Lilley (Ericsson), P Moloney (Deferred, MND), D Slack (telent Field Force), P Waterhouse (telent Chorley), I Wood (Ericsson),
Katy Angliss explained that the telent Employee Forum reps had requested a meeting with the PCC as they thought there had not recently been much contact with the PCC, following the Ericsson transfer. Vic Webster pointed out that HR were responsible for pensions through Peter Harris. He didn’t understand why they do not have information on what is happening – PCC minutes are posted on the pensions office web site, minutes are displayed on notice boards, or else HR could be seen directly. Sergio said that he produced forty copies of minutes to be displayed on notice boards, but Katy said she had not seen them. Sergio also noted that there were two telent active reps here today, although four others from Coventry, including himself, had now been transferred to Ericsson. If anyone is interested in being elected to the PCC to replace those reps now with Ericsson, then they should go and see HR, and/or Peter Harris.
John Leaney noted that telent Field Force is a mobile constituency, and there are no notice boards, so their means of communication is via the web site for minutes or the PCC organisation. Currently, the constituencies allowed for four Coventry reps, three Field Force and one Chorley. He also noted that new election procedures were now being prepared to meet the requirements of new legislation.
Sergio said that he was always prepared to answer any questions (or redirect to someone who could). Vic added that all PCC reps (active, deferred, pensioner) were approachable by anyone.
Tim Lewis asked where were the web site minutes, and was told that they could be found through the internal momentum web site or externally through the telent pensions office web site (http://www.telentpensions.co.uk/).
Gavin Martin wondered if there was any way to promote the pension Plan, bearing in mind the negative press over the last two years? Vic thought that it was the responsibility of HR to actively promote the Plan and send out literature. Ken Buckley noted that the PCC had always favoured opting out rather than opting in to the Plan. Peter Dronfield thought that the key is HR – Pensions Office staff can come along to a site to promote the scheme at any time, but only at the invite of HR.
Vic noted that the Plan had about 75% membership at Coventry, so wondered why the concern about membership levels. However, Gavin said that it was much lower elsewhere.
The Employee Forum Representatives left the meeting at this point.
Mick Elliott referred back to the January 2006 meeting, when Peter Harris had said that he would issue a précis of the new pensions legislation affecting MNDs and PCC reps. This has not yet been received.
Vic referred to a proposal made at the last PCC meeting for deferreds annual statements to be sent out only once every two years. He had asked that if this was to be so, could they still go out this year. Peter Harris had said that he would take Vic’s request to the Board. However, in the recent Pensions Update newsletter, it was stated that they would not go out this year. Vic could not recall that this issue had been put before the Board before the issue of the newsletter. At the September Board meeting, Peter Harris told Vic that he would monitor the number of complaints from deferreds over the lack of their statement this year. Mick Elliott said that there were members of the PCC at the Board meeting, so why did they not raise the matter? John Leaney noted that the Update went out before the last Board meeting.
Mick Elliott was unhappy that the MND/PCC subcommittee had met on 1 September, as he had not been invited. Dawn apologised, saying that it was an oversight in Pensions Office. Vic said that nothing had been finalised and other meetings were still needed.
The deal had collapsed in August. Vic noted that a company called Polygon had been hostile to the Fortress bid, and they had enough voting rights with telent shares to block the deal. It was noted that there had been a unanimous SPT Board vote to accept the Fortress deal.
This was presented by Vic Webster. It was based on the Investment Committee meeting held on 7 September 2006, and the Board meeting of 27 September.
Towards the end of July, a committee of the Board had been formed to look into outsourcing the Pensions Office, and a number of possible suppliers had been approached. A company called Paymaster has become the preferred supplier, and over the next few months detailed contract negotiations will take place.
All outstanding matters relating to the Ericsson transfer had been addressed by telent, although Dawn noted that she was not aware of the exact date when the transfer offer would be made to affected members. (Post meeting note:- The transfer information packs were issued by Mercer’s on 27 October 2006)
Peter Harris had given a presentation on the progress of our investment strategy. The value of the funds stood at £3101.8 (excluding the assumed Ericsson transfer).
Vic noted that the figures he had obtained from the actuary on recent retirees confirmed his suspicion that the ongoing low Credited Interest had killed off the Basis 3 retirement option in all but name. In practice, it was now more like a Basis 1 Plan only, which disadvantaged lower paid employees because of the effect of the offsets relating to the state pension. The assumptions used by the actuary for retirees, as at the time of the 2002 and 2005 valuations, were:
| Year | Annual pensions increase | Credited Interest | Category of retiree | Basis 1 | Basis 2 | Basis 3 |
|---|---|---|---|---|---|---|
| 2002 | 2.75% | 5.75% | Actives | 27% | 11% | 62% |
| Deferreds | 15% | 2% | 83% | |||
| 2005 | 3% | 2.5% | Actives | 87% | 12% | 1% |
| Deferreds | 77% | 3% | 20% |
Peter Dronfield expressed surprise at the advanced state of Pensions Office outsourcing negotiations and wondered what the gains might be, and how it would operate.
Dawn said that the way ahead for the Pensions Office management was considered from three viewpoints:
Dawn said that generally Pensions Office staff were looking forward to being part of a company which should give them more opportunities. Paymaster’s office was in Crawley, so it would be good for them to have a midlands based office with experienced pensions administration staff.
Chris Walton asked how this might affect the PCC? Vic said there were still a lot of details to be sorted out in the contractual negotiations.
Ken Buckley referred to recent USA action which had effectively stopped UK companies from operating internet gambling in the USA, causing their shares to crash. Dawn said that we had a wide range of different shares so the impact of a downturn in a very small part of the market would be minimal.
Vic reported that a draft of the Annual Report and Accounts had been issued, and it would be discussed at an auditors meeting next Thursday. Dawn said that she expected Graham Allen to attend the next PCC meeting to present it.
Sergio believed that the communications exercise from Ericsson was quite complicated – a lengthy document was needed. He had been told there would be two weeks of Road Shows, to explain the details of the transfer of deferreds, but he didn’t know when from. Sean wondered how the telent Trustee were involved. John Leaney said it was to ensure that Ericsson received quick responses to any questions raised and that Sackers, as the Trustee’s legal representatives were involved to ensure that members interests were protected.
Sean was concerned that employees who leave with less than two years service will lose a year of pensionable service if they are not allowed to transfer their Marconi pension across to the EMPP before they leave.
Further to the subcommittee meeting of the 1 September, there was no more discussion at this meeting. If any PCC reps had comments on the interim proposals recently circulated, then they could be sent to Ken Buckley for distribution to the subcommittee.
Dawn said that Pensions Office wished to raise the awareness of people to the Specified Dependants Procedure. A write up on the procedure was given out, and PCC reps were asked to raise any queries at the next PCC meeting.
It was noted that a Dependant could be nominated up to six months after commencement of starting a pension. It was also noted that it can be for one person only. Vic noted that acceptance of a nomination was discretionary by the Trustee.
Peter Dronfield asked PCC reps to indicate, either before or at the next PCC meeting, any training subjects they would like to cover. John Leaney immediately requested something on the Ill Health retirement procedure – what happens when someone makes an application e.g. where start from, how concluded?
Sean Leahy noted that the Pensions Office seemed to do work which might be considered to be HR type work. He would find it useful if Dawn could list these sort of things.
Peter Dronfield was told that Pensions Office still administered Jabil, and were now looking at their potential outsourcing. Dawn said there had been some divergences in their Plan, e.g. in the early retirement factors.
Ken Buckley asked if the new age discrimination legislation had any effect on the Plan. Dawn said that this was to be looked at by the end of the year, and she hoped to be able to report at the next PCC meeting.
The next PCC meeting was scheduled for Wednesday the 13 December at Coventry, 10.30 a.m., to include a review of the new PCC/MND procedure.
(John Leaney subsequently booked the usual dining room conference room.).
Ken Buckley
20th October 2006
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