Distribution of Assets of Halcrow Trust

[Bill Mitchell]

Perhaps I've missed something but was rather surprised to get a letter from Halc Trust with a fairly cryptic (to me) message about the posibility of assets being distributed, by implication, to retired members of HPS. Does anyone have the background to this beyond what is said in the letter and what is intended by the information collected on the returnable form included with the letter.

[John Ratsey]

The Halcrow Trust held 73.88% of the Halcrow shares (see the sale document linked to in the news section http://www.halcrowpensioners.org.uk/pages/news.php and now has to dispose of that wealth (less capital gains tax) in accordance with the Trust deed (available here http://www.halcrowpensioners.org.uk/pages/news/halcrow-trust.php).

You are one of the lucky ones: Since you have been sent a form they think you are eligible in accordance with the strict definition that the Trustees have decided to use for the declaration on the form (ie "retired" meaning having gone straight from Halcrow employment to retirement). I consider myself to be a retired Halcrow employee having worked for the company for over 30 years and now being in receipt of a Halcrow pension. However, I did enter into other employment during the past few years because Halcrow had run out of suitable work for me and I didn't want to be a burden on the company by being paid to do jobs I didn't enjoy and wouldn't do very well. However, even in my retirement I still work for Halcrow when they need me and give them preference over others.

And while I'm grumbling about the wording on the application form (available here http://www.halcrow.com/News/latest-news/Halcrow-Trust-notice-to-UK-and-non-UK-retired-employees/ for anyone who hasn't seen it), why did the Trustees choose to not invide widows / widowers although they are explicitly mentioned as beneficiaries in the Trust deed. One reason I am still working is that I have no confidence in the long-term ability of HPS to meet its obligations. As you will see in the HPA news section, some pensioners (but not the HPS trustees) tried hard to get some of the sale proceeds diverted to funding the pension deficit rather than letting shareholders walk away with a big profit.

John

[vicscott]

I don't know the criteria that the trust used to decide who were legitimate beneficiaries nor the formula used  to establish amounts to be distributed but having retired 15 years ago after long service I did not anticipate any significant payment. I must say I am surprised and delighted at the amount allocated to me in the recent '' Option over Loan Notes''  advice letter and am extremely grateful. Unfortunately, it is is not transferable and the taxman will take a large bite.
However, I have to survive to May23 to finally qualify. Here's hoping!

[John Ratsey]

I heard last evening of people receiving letters advising of an allocation. The formula is said to be based on years of service which I had assumed would be after the formation of the Halcrow Trust, but perhaps I'm wrong. I sent in a claim and got this reply:

The Trustees will be making the distribution within the terms of the trust. They currently intend that all employees on the payroll at 31 October 2011 with a minimum of twelve months service at that date, and employees who left Halcrow to go directly into retirement in the period between 5 November 1990 (the date of the formation of the Trust) and 1 November 2011, and have been identified by the Trustees in advance of the distribution, will be included in the distribution. 

No further information will be provided in relation to the eligibility criteria or the method of calculation of any payments at the time of distribution or in response to individual questions.

I fail on the "directly into retirement" criterion so I don't expect to see a penny.

For those who do receive the payout, I suggest you invest it wisely ready for the day when CH2M Europe gets turned into a bankrupt shell that can no longer afford to prop up the Halcrow pension fund. I have difficulty in convincing myself that the CH2M shareholders are a bunch of philanthropists who will happily allow the company to keep pouring money onto a black hole.

John

[Jane Tordoff]

For all those lucky ones -  1 Loan Note is worth £1. 

[John Gardner]

Has legal opinion been obtained on the criteria used by Halcrow Trust for the distribution of Assets to individuals?
John Gardner

[vicscott]

Just reflecting on the position of the Halcrow Trust and the HPS Trustees on their positions re the takeover and distribution of Halcrow Trust Funds.
Having made the deal, the HT trustees would in effect be handing back cash to the purchaser if they had then allocated monies into the HPS and thus removed that liability from the new owner (albeit better safeguarding our pensions). The HPS liability is part of the price paid by CH2MHill together with the liabilities of the other minor pension schemes plus some £40m of borrowing/overdraft.
HPS trustees having tried and failed to achieve a guarantee from Halcrow/CH2MHill (and HPS have no leverage other than a moral one) might have realised that it was in our interest to see the deal through and rely on the financial strength and integrity of a bigger player.
Potentially obstructing the deal by opposing it in court would could have led to a worse scenario (such as administration) given Halcrows precarious financial state. In any case, the court judgement that the firm's covenant was improved gave the Pensions Regulator and HPS no legal basis for intervention. 
The main reason we should feel hard-done-by was because the Halcrow Board failed to secure a direct injection of cash into HPS as part of the purchase deal or obtained legal guarantees to fund the HPS. But you can only do so much from a position of weakness.

[John Gardner]

Vic,
My understanding is that CH2MHill have no legal liability to help HPS therefore I can not see how the Trust could have relieved CH2MHill of non existant liabilities. What has in fact happened is that by distributing the Halcrow sale proceeds to individuals the Trust have handed the Inland Revenue tens of millions of pounds which would have been much better spent in supporting HPS. This is a waste of Halcrow's assets which the Trustees should have been protecting.
John Gardner

[John Ratsey]

My understanding from looking at the Trust Deed http://www.halcrowpensioners.org.uk/media/Halcrow_Trust_Rules_1990_(OCR_version).pdf  is that the trustees have the power to make changes. They could have made the Halcrow Pension Scheme a beneficiary if they wished to do so and thereby deprived the government of some welcome revenue. The trustees appear to have deviated from the beneficiaries designated in the Trust Deed through the exclusion of widows / widowers so they can't claim that changes are no possible.

The total lack of transparency in the distribution is disappointing, to say the least.

John

[vsbedi]

Does this apply to people who have left Halcrow before 31 Oct 2011. Are they going to get any benefits as other employees. Nobody from the local office is giving an answer to this. I joined Halcrow - Noida(India) in Oct 2009 and left in Jun 2011. Can someone reply on this.

[John Ratsey]

Unless you can convince the trustees that you left Halcrow to go straight into retirement then you are not eligible for the distribution.

John