Please find attached the spreadsheet on which the estimate of the HPS deficit is based.
This is based on a comparison of the information about all the pension schemes run by Halcrow combined, as set out in the company Annual Reports, of which the latest is for year-ending 2013; the information about the assets of the HPS set out in the HPS annual reports 2005-2013; and the information on assets and liabilities in the HPS triennial Valuation Reports for 2002, 2005 and 2008 (the latest available).
Since both the scope and the methodology/assumptions differ in the estimation of liabilities by the company and by the HPS, the liabilities in 2014 of the HPS are estimated by comparing the ratio of the company estimates and the HPS estimates in the three years in common. These ratios show an upwards trend, which is extrapolated to from 2008 to 2014. Why this should be is unclear, since the HPS is by far the largest of the schemes, and may be to do with the different methods of calculation. This estimate is far from satisfactory, and can only be considered a "best guess" in the absence of information from the Trustees.
Two estimates are made, based on the trends in assets and liabilities of the combined pension schemes. The rate of growth of liabilities is faster than that of assets, and the difference seems to be accelerating. The two forecasts are made using data from 2005 to 2013, and for 2008 to 2013. In both case, the same ratio of liabilities (HPS/All schemes) is maintained. The estimated funding ratio (assets/present value of liabilities) is 44% in the first case and 40% in the second. Either way, it is bad news.
However, this is only an estimate. The purpose of the regular Valuation Reports is to avoid this kind of speculation, and that is why we have been urging the Trustees and tPR to take action to provide us with proper information in accordance with their legal obligations.
Hope this helps.
Stephen
