Halcrow Group put their offer in the post yesterday so it has started to fall through the letterboxes.
Here (http://www.halcrowpensioners.org.uk/media/HPS_Offer_31May2016_OCR.pdf) 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).
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.
Quote from: dickj_wilkinson on June 01, 2016, 12:57:37 PM
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!
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.
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.
Quote from: Clive Williams on June 01, 2016, 08:20:54 PM
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.
Quote from: John Ratsey on June 01, 2016, 09:52:25 PM
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
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.
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".
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.
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.
Quote from: nhparker on June 02, 2016, 06:30:33 PM
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!!!
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?
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.
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.
Thanks Martin. This responds to an afterthought added to my basic thoughts. Does anyone have a comment on the first paragraph.
Quote from: nhparker on June 02, 2016, 06:30:33 PM
Also, I'm not sure how it works, but I understand that firms (ie Halcrow Group Ltd) have to pay a PPF levy each year. If so, would CH2MHill continue to pay this to ensure that if the scheme failed in the future it would go into the PPF ?
It seems to me that it is best to wait until very close to the option choice deadline (ie days) before considering making any decison (or non-decision). That way HPS members will have made best use of all the information available and responses to questions.
I think what will happen is that CH2M will put Halcrow Group Ltd into liquidation and any pension members left in the HPS will enter the PPF mechanism; those that choose to transfer their HPS to the new HPS2 will be in a scheme sponsored by some company other than Halcrow Group Ltd (there are 19 companies under the Halcrow umbrella and 6 CH2M companies registered in the UK), but probably not CH2M. This sponsoring company will have to maintain payments to the PPF but possibly at a reduced level because there won't be so many members at risk.
I shall be going along to the meeting in Bristol so shan't be doing anything until then.
Given the lack of any of the triennial valuations I guess we are left repeatedly requesting a transfer value?
Quote from: Stephen Brichieri-Colombi on June 03, 2016, 09:36:30 AM
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.
Stephen,
1. I think we need to explain ITS. My understanding is that it is Independent Trustees Services they are professional Pensions Scheme Trustees - Chris Martin of ITS is an Employer side HPS Trustee brought on after CH2 took over; he was also the Chair of the BHS Pension Scheme Trustees and I suspect a Trustee of other schemes. He is paid for his services - I asked the question when he was appointed.
2. Financial Advice - JLT letter 27 May 2016 2nd para - '....they are there to help make an informed decision but will not provide you with a personal recommendation. If you require a personal recommendation ...... seek an advisor' They are not providing financial advice to members, it is very carefully worded, which begs the question what are the meetings about?
I would expect CH2 to look after their existing staff - they earn fees - if a pre retirement age HPS members went to PPF they lose 10% immediately and have a cap as Michael spoke of above. I see the only reason for the offer of a 'new' scheme, rather than PPF for all when Halcrow is put into administration, as I am sure it will be, is to minimise existing staff ill-feeling; they would suffer a 10% immediate loss and a cap if HPS went into the PPF.
CH2 need to be equitable to all scheme members hence they have offered those with a pension in payment the same 'new' scheme, but it is immaterial to CH2 whether you take it or leave it - as a pensioner your earning days for CH2/Halcrow are over.
Brian
Surely if this approach proposed by our "Trustees" were legal, every company which has a DB pension deficit would have already done the same. But they haven't.
And indeed the government was going to start considering how CPI (instead of RPI) could be forced onto British Steel pension members, but that it would require a new legal instrument to deliver this, so they have had to consider further if it is even possible. And stated that its an exceptional circumstance that its even being considered.
In what way can CH2M/HPS Trustees operate beyond what the government has considered?
To give members an ultimatum like this is quite out of order, especially with the paucity of information provided. Really sinking low.
Stephen - would it help to send summary to Frank Field? (Work and Pensions Committee chairman)
Quote from: finneyb on June 03, 2016, 06:11:31 PM
2. Financial Advice - JLT letter 27 May 2016 2nd para - '....they are there to help make an informed decision but will not provide you with a personal recommendation. If you require a personal recommendation ...... seek an advisor' They are not providing financial advice to members, it is very carefully worded, which begs the question what are the meetings about?
But the letter from JLT in the bundle claims that the information that they will provide is impartial.
QuoteWe are independent from your company and although the fee for our work is paid by the company the information that we provide is impartial.
Given that they are in the same company as one of the trustees then that impartiality is questionable. However, they can maintain the impartiality promise by not actually giving out any information.
Quote from: John Ratsey on June 03, 2016, 08:57:37 PM
But the letter from JLT in the bundle claims that the information that they will provide is impartial.Given that they are in the same company as one of the trustees then that impartiality is questionable. However, they can maintain the impartiality promise by not actually giving out any information.
John
It maybe that all they are going to do is explain the system ie when Halcrow is in administration then HPS goes to PPF and point people to the comparison between PPF and 'new' HPS as set out in the letter, so that the HPS member can make an informed decision. Factual information by definition is impartial, provided they give the whole picture.
Brian
Quote from: Adam Schofield on June 03, 2016, 08:45:10 PM
Surely if this approach proposed by our "Trustees" were legal, every company which has a DB pension deficit would have already done the same. But they haven't.
Adam
The poss answer to your question is that HGL the scheme sponsor will be in administration therefore HPS goes to PPF as would any other DB scheme. But, out of the goodness of their hearts?? CH2 have offered a v slightly better package - pl. see my post just above yours for my thinking why they have done this.
Steel production ie TATA Steel is of national importance and it is unionised hence the Govt proposal ie they want don't want TATA Steel in administration the jobless numbers would be disastrous. Being cynical the Consultation kicks the can down the road until after the EU ref
As Stephen has said previously HPA has a legal advisor looking at the matter. IMO the legal advisor is no lightweight - hope that is of some comfort to you.
Brian
In a circular to CH2M Staff, the following information is provided.
"CH2M will make a payment of £80m towards the pension scheme deficit and also provide a guarantee of £50m towards it too"
CH2M normally qualifies all statements about the future in a way that allows them to do the opposite of what they say, but in this case do not appear to have done so. The £80 million is around 40% of the £204 million they pledged 5 years ago. Does this mean that 5 years from now, this pledge will be reduced to £32 million?
Brian - so is the suggestion that CH2M are going to transfer remaining 4000 staff from the HGL subsidiary company to CH2M proper (and all contracts etc), and then declare HGL insolvent, requiring remaining pension members to transfer to PPF?
PPF and any court would surely laugh at the nonsense of it – you can't transfer all benefits of ownership (staff and contracts) and then ditch the liabilities. That would be fraudulent, and Trustees as individuals could be prosecuted for such behaviour. Trustees hold a degree of personal liability, as previous court cases have demonstrated.
One question which I am unsure of in the 'offer' – for deferred members the proposal under new scheme backdates the use of CPI from the date of leaving (I think). Whereas if the scheme fell into PPF, the starting point for the calculation (90% etc) is at the time the scheme went under. Since I left a few years ago, this means indexation (a mix of 5% and RPI in my case) would be applied. This is a much better starting point than the backdating of CPI that the new HPS3 scheme is offering. At least, that's how I read it. Which is another reason that this 'offer' makes no sense without proper explanations and individual valuations for each member.
Quote from: Adam Schofield on June 04, 2016, 02:38:09 PM
Brian - so is the suggestion that CH2M are going to transfer remaining 4000 staff from the HGL subsidiary company to CH2M proper (and all contracts etc), and then declare HGL insolvent, requiring remaining pension members to transfer to PPF?
PPF and any court would surely laugh at the nonsense of it – you can't transfer all benefits of ownership (staff and contracts) and then ditch the liabilities. That would be fraudulent, and Trustees as individuals could be prosecuted for such behaviour. Trustees hold a degree of personal liability, as previous court cases have demonstrated.
Adam,
My response to the first part of your post is below - the second part is above my pay grade
Pl see:
1. JLT letter 27 May 2016 mid way down page 1 '2. Remain in the HPS, which will be transferred into PPF '
2. JTL letter 27 May 2016 2nd page para 1 ' HPS will be transferred to PPF shortly'
3. JTL letter 27 May 2016 2nd Page para 2 ' active members will be transferred to the CH2M Hill 2013 Group Personal Pension Plan '
For HPS to be transferred into PPF HGL must be in administration. On paper it appears to be insolvent, which is what the auditors basically said, so there should be no problem in closing HGL down. Of course, financial transfers inside Group companies can be opaque as we have seen with the likes of Amazon etc.
If active members ie current employees are going into CH2M Hill 2013 Group Personal Pension Plan then it looks to me as if the staff are being transferred to CH2M employment contracts.
CH2 may be relying on HPS members' lethargy to get their own way. I understand their thinking, it's certainly a tack I would try.
HPS members are not being forced into PPF, if they go it is their choice; CH2 are giving them an option albeit little better than PPF.
HPA must be a real PITA !
Brian
Brian et al,
I will attempt to explain the 2nd part of my post with an example, because I would like others to confirm whether I am barking up the wrong tree or what.
Say John Smith left Halcrow in 1999 with 20 years service, with a forecast pension (in 1999) of £10k all at 5% indexation, and is now a deferred member until 2020. Since 1999 his pension has been recalculated at 5% – and is therefore currently worth £22.9k and will be worth £27.9k in 2020.
Under the new Scheme rules, CPI would apply from 1999 to 2020, which (assuming 1% for 2016 to 2020) results in a final pension of £14.3k in 2020. (I haven't applied the CPI caps because its too complicated for this example).
Under PPF, the starting point for pension calculation is when the Assessment is approved, but then factored by the 90% cap. John therefore has a pension of (£22.9k * 90%) = 20.6k. No further PPF cap would apply. Then also add 4 yrs future CPI inflation 2016 to 2020 leads to a final pension of £21.4k.
Therefore John is 50% better of under PPF. However, the new scheme states you will not be any worse off, so lets assume that the Trustee honours this statement. But my point is, I don't know what these values could be for me. The letter strongly indicates we would be better off under the new scheme, but provides no valuations to demonstrate this. We also have not been provided independent financial advisors to be able to assist us in making this assessment.
Comments (& corrections) please!
sorry - I forgot to add the 1% uplift offered to deferred members on transfer. But it doesn't change the issue.
Adam,
This is my thinking as a lay person.
The £22.9k is the pension that the new scheme and PPF will use as a baseline.
CPI in the new scheme applies to future increases to this baseline ie CPI upto 5% for service between 1997 and 2005; CPI upto 2.5% for service after 2005 according to the Factsheet received from CH2. NB My factsheet is for members over normal retirement age - you will have a different factsheet, but I suspect that the CPI arrangements are the same.
Suggest that you call TPAS www.pensionsadvisoryservice.org.uk/ it's a free service and I've found them very helpful in the past, they could probably answer your question over the phone.
HTH
Brian
Dear All, I spoke this afternoon to Tony Apps (who has a vested interest in this through his wife, of course), who also happens to be my financial adviser. I outlined my situation - joined Halcrow beginning January 1988 (in the middle of a pensions contributions holiday), transferred in eight years' worth of LG Superannuation Fund contributions, left Halcrow in March 1998. We discussed the level of faith that one can place in CH2M. The PPF as a fallback makes the acceptance of the CH2M offer (see note below) a no-brainer if (and only if) there is no uncertainty attaching to the PPF option. Personally I'm not convinced that the PPF itself would be free of risk, given the number of final salary schemes for which it is having to pick up the liability. My inclination, therefore, is to go with the CH2M offer but as somebody else already noted, to leave it as long as possible before informing them of my choice. I don't trust CH2M further than I can spit, frankly. https://www.ch2m.com/newsroom/news/seventh-year-ch2m-hill-named-to-ethispheres-worlds-most-ethical-companies begins to look somewhat hollow; perhaps our lawyer could fire that suggestion back at them and ask how an ethical company can justify disregarding a covenant that it signed.
Stuart Brown
Note: I gather that the alternative was the European operation being cast adrift and going into complete administration. That doesn't surprise me: the European consulting market is stupid these days, with fee rates being undercut right, left and centre. One of the reasons I decided to hang up my boots and compose music instead.
HPA has written to William Brierly, the Chief Ethics and Compliance Officer at CH2M HILL Inc, asking about the ethics of stating to the reviewers of the covenant that they would continue with the 2008 recovery plan, and making further statements to the press to this effect, then threatening to renege on this promise. He has replied, asking us to first consider the offer they made on 31st May and write again before he would reply (a delaying tactic). We immediately replied, pointing out that the offer is merely a choice between two unpleasant alternatives compared with the recovery plan, and repeating our request that he look at their ethical conduct to date, not any plans they have for further unethical conduct. No answer yet.
I have also contacted Ethisphere to ask about the procedure to expose companies that abuse the awards they are given. No reply as yet. You might also like to visit their site and ask them the same question. You may be aware that two of the documents submitted in court in 2011 referred to CH2M being an ethical company, in order to justify the belief that would continue to support HPS.
Brian (and others?) – the Booklet does not state that the indexation from time of leaving to time of transfer will use the old HPS system – it states that Inflation will be used for the full period. It also says full details of benefits are set out in the Trust Deed and Rules of the new scheme, but oh dear, that's not provided. The Fact sheet for Deferred members does suggest that the old HPS indexation might apply for that period, but its quite vague. To say it's unclear is an understatement. So my point holds – unless Halcrow provide sufficient information to inform us otherwise.
Another thought. What happens if New HPS goes to the wall in 2 years time, for whatever reason (Brexit, or CH2M pull out, or whatever, take your pick). Then New HPS would get capped by 90%, and we would be worse off than if we chose PPF now. There is no guarantee that New HPS will be any more secure than Current HPS is alleged to be.
Quote from: Adam Schofield on June 07, 2016, 08:54:10 PM
Brian (and others?) – the Booklet does not state that the indexation from time of leaving to time of transfer will use the old HPS system – it states that Inflation will be used for the full period. It also says full details of benefits are set out in the Trust Deed and Rules of the new scheme, but oh dear, that's not provided. The Fact sheet for Deferred members does suggest that the old HPS indexation might apply for that period, but its quite vague. To say it's unclear is an understatement. So my point holds – unless Halcrow provide sufficient information to inform us otherwise.
Another thought. What happens if New HPS goes to the wall in 2 years time, for whatever reason (Brexit, or CH2M pull out, or whatever, take your pick). Then New HPS would get capped by 90%, and we would be worse off than if we chose PPF now. There is no guarantee that New HPS will be any more secure than Current HPS is alleged to be.
Adam,
As I see it you suffer the PPF 90% cap unless you are over normal pension age when you transfer regardless of when you transfer.
Brian
Quote from: finneyb on June 08, 2016, 03:18:29 PM
Adam,
As I see it you suffer the PPF 90% cap unless you are over normal pension age when you transfer regardless of when you transfer.
Brian
Adam/Brian,
The PPF Revaluation guidance is here:
http://www.pensionprotectionfund.org.uk/DocumentLibrary/Documents/PPF_Revaluation_Guidance.pdf (http://www.pensionprotectionfund.org.uk/DocumentLibrary/Documents/PPF_Revaluation_Guidance.pdf)
The relevant paragraph is:
"Revaluation for the period between the day after pensionable service ended and the day before the assessment date is calculated in line with a scheme's admissible rules. Revaluation for the period from the assessment date until normal pension age (NPA) or early payment is calculated in line with the statutory levels of PPF compensation."
So the way I read it, revaluation (first stage, to enter the PPF) would use RPI (and any applicable salary linkage) if entering from HPS, BUT possibly CPI if entering under HPS2.1 rules (though this is far from clear).
Agree, the PPF 90% cap and age cap would apply in both cases, unless they change by the time HPS2.1 enters. But I think you may be able to mitigate some of this if a proportion is taken as a commuted sum???
Has anyone requested clarification from HPS on Adams point about the revaluation between date of leaving and date of transfer? I am deferred still below pensionable age (2020) and not so far from Adam's 'John Smith' illustration so it makes a big difference to me. I think it is a question re HPS2 not the PPF whose rules are fairly clear as Steve posted above. Then there is the question of the 'additional' pension until government pension kicks in (in my case 66 not 65).
Tony - I have just sent an email requesting clarification on this issue to the pensions team. Plus other clarifications, including request that all members are provided with the new Trust Deed and Rules of the new scheme, so that we can read what we are signing up to. Seems only reasonable. Call it 'due diligence'.
Stephen - its the benefit at time of transfer to the new pension scheme that is unclear, not the choice for transfer to PPF. The Booklet makes it clear that under the New Scheme the indexation for the time between leaving employment and transfer now is also being changed to CPI. Whereas under PPF this would not be the case, as you note.
The HPS admin team has sent out a 15 page Q&A document dated 09 June 2016.
For ease of reference it is here (http://www.halcrowpensioners.org.uk/media/HPS_Q_A_09Jun16.pdf).
Those are valid questions which are best directed to pensionsteam@ch2m.com unless already answered in the 09 June Q&A.
Quote from: John Ratsey on June 01, 2016, 12:16:00 PM
Halcrow Group put their offer in the post yesterday so it has started to fall through the letterboxes.
Here (http://www.halcrowpensioners.org.uk/media/HPS_Offer_31May2016_OCR.pdf) 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).
I was concerned to find out that as my contributions were before 6 April 1997 I will no longer receive an annual pension uplift. This in effect means that in real terms the value of my pension will decrease each year by inflation! I'm sure there are many HSPS or HPS members in this situation, but have not noticed any mention of it within any of the discussion streams.
Am I interpreting this correctly?
I will also be affected by the decision for no increase, as my payments were all before 1997. Those in the same situation will be on a "fixed income".
Quote from: billf on June 14, 2016, 09:52:21 AM
Am I interpreting this correctly?
Yes, and I'm sure we have discussed this point somewhere and it was mentioned in Newsletter 18 (http://www.halcrowpensioners.org.uk/pages/news/newsletters/newsletter-no.-18.php). The information sent out to HPS members only gives comparison with PPF terms and provides no comparison with the existing HPS terms. In my case about 3/4 of my pension accrual is pre-April '97 which means that under the proposed offer my annual pension increase would be about CPI/4.
I recall that the actuaries would assume that I would be getting about 23 further years of pension and, any small difference compounded over 23 years becomes a very big difference. Assuming that CPI is 2% pa then I calculate that £10,000 of pension now would increase to £15,460 after 23 years if all indexed at CPI while it would only be £11,160 at the CPI/4 which the proposal would give me. That's better than staying at £10k but still represents a substantial loss of income. Can someone check my sums?
Stop Press:
We are extremely pleased to advise that three members of the HPA committee, and Martin Jenkins, have been invited to meet with Nicola Parish and her team at the office of the Pension Regulator. She is Director of Case Management, and has been closely involved with the BHS case. The meeting is to discuss the role of tPR in the case, and a report that they are preparing on the HPS. We expect the meeting to be held next week.
We believe this is probably as a result of a phone call from Robert Buckland, MP.
John,
I come up with (10,000* 1.02^23 =) £15,769 and (7500+2500*1.02^23) £11,442, which are near enough to your figures to say that either set of numbers gives the correct impression.
What I think is more informative is to relate numbers to today's prices. That means the 3/4 portion of £10,000 pension that is currently worth £7,500 would only be worth (£7500*(1/1.02)^23 =) £4,756 at today's prices in 23 years time. In other words you would be (7500-4756 =) £2,744 worse off at today's prices. However few engineers of our vintage would only be on a Halcrow pension of £10,000. Those currently on £30,000 would be £8,231 worse off and those currently on £40,000 would be £10,975 worse off than they are today (pre tax).
On the plus side it would put those currently paying 40% tax on part of their pension into the 20% tax bracket!
What I have not checked is the 75% assumption. Also the assumption of 2% inflation could be wildly out if the £ devalues because we leave the EU. We could go back to the days of double figure inflation!
I am in a similar situation to Stuart Brown, except that on joining Halcrow in 1989, I transferred in ten years worth of local government superannuation contributions. I received a written offer from Halcrow (which I still have) and on that basis chose to move my pension from a very secure scheme to the HPS. Presumably, because I moved this money prior to 1997, and actually left Halcrow in 1996, I can expect no further increases to my pension and it will be allowed to whither away to nothing through inflation. I must say that I do feel cheated.
Given my situation, I don't see much difference between the HPS offer and going into the PPF. On the one hand there is the pitiful 2.5% increase, which will make little difference to my decision, whereas the PPF should be a more secure option given CH2M's track record to date (I have zero confidence that they will stick to any promises).
I agree with much of what's been said already, in particular the fact that we shouldn't be expected to make this decision without the missing financial information and that there is insufficient time to make such a life-changing decision. If, in the first instance, we can get more time agreed that would be a very good place to start.
Quote from: John Ratsey on June 01, 2016, 09:52:25 PM
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.
Just sifting through my old emails and when they made me redundant they sent a copy of my contract for my lawyer, it is with CH2M Hill - no mention of Halcrow at all. I wonder of they screwed up and sent me the wrong contract?
Given that it's less than 4 weeks before the pensions team need to receive choices forms back at BP by 5 August, some of us will have to be posting forms quite soon now that overseas post has become ridiculously slow.
Therefore can I ask HPA to give everyone a summary of where we are with regard to discussions with the PR and PPF and whether any legal action is to be pursued. At the moment it's impossible to work out what's happening since it appears to be just a load of waffle. So give us all a clear picture of what you're doing please and then maybe we can decide whether to wait for legal action or just to go ahead with a choice and stick with it. What I don't want to do is to hold off thinking that HPA is going to suddenly save the day through legal means only to be left in the lurch by your goodselves as well as by CH2M.
Yes, I agree with Philip. Time is ticking on and we need to know what best to do and when. At the very least, it would be good to get an idea of the likely timetable for any action that may be taken.
I have just sent a question to the pensions team.
"The letter from the Pensions Regulator dated 24 June 2016 refers to, in item 38, the new scheme having an equity stake in HGL. This is stated as minimum 25% and maximum 45%. Item 39 goes on to explain this as 'ensuring that members and the PPF share in any upside from the continued operation of the HGL business'. The material that you have sent out is silent on this point. Please clarify and explain."
Anyone here understand it? Why is all the other material silent on this?
Even if it's correct a 45% stake seems ludicrous. CH2 Group / management will have no incentive to run the business ... it will be a continuation of the current position where the business is just there to serve a pension fund. Why would CH2 agree to this? And how does the new scheme exercise due diligence on its equity stake. If HGL starts paying large sums back to CH2 as "fees" they can easily bleed HGL so that the fund gets nothing.
And yet the Pensions Regulator thinks it's worth something.
I was informed HPS rules and the new scheme rules are being made available at Halcrow.com/pensions and just checked and they have been uploaded.
Also, for those abroad and trying to work out how to respond when there is still further information to be supplied I was told they are happy to receive a scanned copy of the option form which they will hold as a record of my intent. Thereafter they need hardcopy and they would liaise with me should this not be received before the deadline. Please check yourself though, to be sure this does apply to all and wasn't just a one off concession.
The HPA today launched legal proceedings. Details will be released on Tuesday.