HPS - The Offer from Halcrow 31st May 2016

[John Ratsey]

Halcrow Group put their offer in the post yesterday so it has started to fall through the letterboxes.

Here is a copy (it's possible that the section "Factsheet for pensioner members over Normal Retirement age" (pages 5 to 9 of the PDF) may be different in the letter sent to the scheme members who are not over their normal retirement age.

Note the emphasis on comparing with the PPF. I see no illustration of the longer term financial implications for members in their retirement and, particularly, for widows after their husbands die (they tend to be younger and live longer so reduced increases hits them the most).

[dickj_wilkinson]

Having just read the offer, my initial thoughts are:

it appears there is no choice as HPS is going to PPF anyway.

The offer is better than PPF but worse than the current HPS
 - CPI rather than RPI,
 - 2.5% cap post 5 April 2005 - GMP 3% seems similar).
- Over 10 years or so the difference between CPI and RPI on one illustration is 1050 compared with 1100 starting with 1000 at year one.

I will need to re-read and do some sums but the offer appears better than PPF and if HPS is definitely going to PPF then its Hobson's choice.

[John Ratsey]

I will need to re-read and do some sums but the offer appears better than PPF and if HPS is definitely going to PPF then its Hobson's choice.

It might be better than PPF but it could be much better if the numbers were based on what CH2M covenanted to pay into HPS at the time of buying Halcrow. All those involved in the recent secret negotiations appear to have conveniently overlooked the documents exchanged in 2011. Personally, I don't like the prospect of a pension where the future increase is, in my case, about CPI/4. I want Option C!

[Stephen Brichieri-Colombi]

Your questions are entirely valid
We need to know many facts, and HPA has already received a list of pertinent questions from a pensions expert we have consulted.
We need to know the name under which the new scheme is registered with PPF and the undertakings given by PPF and tPR, and a lot more beside. Since 2012, we have been given woefully inadequate information by the Trustees, and this fact is now being exploited by them.
We do not believe that there are any jobs at risk. CH2M cannot afford to walk away form the contracts on which existing staff are working.
We are assessing the offer, but do not believe this will stand up in a court of law, and will be taking steps accordingly as soon as our lawyers have reviewed such facts as we do have. Further letters will be going to tPR and PPF. A new newsletter will be issued shortly and advise more fully of actions we are taking. Meanwhile, we strongly urge all HPS members to wait before making a decision.

[Clive Williams]

Everyone left in Halcrow transferred across to CH2M Hill contracts. I left in June 2014 and from memory we had new contracts in 2013, there was a staged increase in hours from 37.5 to 40 over a few years to bring us into line with existing CH2M-H employees in the UK. My wife left in Jan 2013 and she can't remember transferring to a new contract.

[John Ratsey]

Everyone left in Halcrow transferred across to CH2M Hill contracts. I left in June 2014 and from memory we had new contracts in 2013, there was a staged increase in hours from 37.5 to 40 over a few years to bring us into line with existing CH2M-H employees in the UK. My wife left in Jan 2013 and she can't remember transferring to a new contract.

I think you will find that the new contracts issued in 2013 were still in the Halcrow name. That's what I've been told by several friends who are still on the payroll.

[Alan McGowan]

I think you will find that the new contracts issued in 2013 were still in the Halcrow name. That's what I've been told by several friends who are still on the payroll.

They changed our contracts, but we are all still employed by Halcrow. I'm a current employee

[Steve_2]

I've changed my view. The trustees are not doing a good job!!!

Halcrow and the Trustees have not provided enough information for an informed decision, or assurances on the strength of the alternate pension offering.

What exactly would I have got under HPS, option A or B ?

I won't be making a decision until adequate information and advice is available.

I will await the next HPA newsletter. Great job.

[sreevesjc]

Its outrageous blackmail. Sign here or we will take away your pension anyway. What kind of a choice is that?

Roadshow in expensive Marriott Hotel Suite: waste of time and money for PowerPoint graphs of life expectancy versus investment returns and similar crap. What I want is my personal pension projection, not generic Ms X, Mr Y examples. Then I can see what it would have been, and how much under the latest proposals, with late and early retirement scenarios.

I don't expect to double my money in 14.2067 years, but I want to know much is being stolen.

The new Scheme supposedly has 'CH2M guarantee'. Is anyone expected to believe this? Why would any company be trusted to keep promises they have already broken? Future scenario: "Trading not very good this year, so we are reducing pension fund contributions".

[Stephen Brichieri-Colombi]

Until we have a formal letter from the PPP they will pay compensation if HPS3 is wound up, no one should even think about accepting the offer.
Hinman has publicly stated that the Halcrow name will disappear, so HPS3 cannot be long for this world.
It means nothing for Halcrow to say HPS3 is viable. That's what Halcrow said about HPS when it was started. Trust is in short supply at the moment, which is why legal action is needed.
 

[Jane Tordoff]

There is no choice, it is an ultimatum.

Corporate companies are experts at wasting money while pleading they don't have any. 

I do not trust CH2 to stick to the plans they are offering. If they can ignore the covenant they can ignore what they are now proposing in a few years, when they think they can ditch us all. 

[Steve_2]

Also, this one-off 2.5% uplift for the new scheme appears just to be an enticement to get people to tick the 'Yes' box

Wonder what the criteria is for qualifying for 2.5% uplift as its not being offered to everyone? 2.5% of what though?

Far from transparent!!!

[michael tordoff]

Am I missing something?  Does the offer specifically state that the PPF alternative is paid by PPF, or is it Halcrow’s internal alternative to their “generous” offer?  If it is that payment is to be made by PPF surely Halcrow cannot make this offer on behalf of PPF.  Of more importance surely the PPF only step in when the company becomes insolvent.  That would make more sense of the PPF alternative in the offer in that we would take the chance of being paid under the existing contract for as long as the money lasts before the PPF step in.  Even if we only got one more year that would provide a 5% uplift on starting pension, which would be better than the 2.5% (what I see as an inadequate bribe) currently on the table.  In reality I do not see CH2M becoming insolvent for many years yet and they provided a covenant to support HPS when they bought the company.

Also something I have not seen in the offer.  Where does the PPF upper limit (the cap which for someone of 65 is currently £36,401.19 – in simple terms close to the limit before you start to pay 40% tax) fit into the offer?  If there is no cap in the offer and both alternatives are paid by Halcrow does this mean they are obscuring the fact that those on high pensions would in effect be subsidised by those on low pensions?

[Stephen Brichieri-Colombi]

HPS members should be aware that ITS is wholly owned by Jardine Lloyd Thompson Group plc (JLT), the same group which is providing the “independent financial advice to members". Caveat emptor.
One of the many reasons we need to challenge the nature and number of choices we are being given.

[Martin Harrison]

The PPF has no cap for retired pensioners who have reached their normal retirement age. It is in their rules and I have also checked with them by phone.