Newsletter No. 13
HALCROW PENSIONERS ASSOCIATION
Newsletter No 13 : January 2016
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Halcrow Companies Financial Position
The overdue 2014 annual reports of the various Halcrow companies were signed off by the Halcrow directors on 6th January 2016, signed off by the auditors on 8th January and sent to Companies House where they became publically accessible on 16th January (click here for the list of Halcrow companies from where the reports can be downloaded at no cost).
The reports contain statements of potential significance to members of HPS. The key paragraphs from the Halcrow Holdings are reproduced here with perhaps the most important statement being:
The ultimate parent, CH2M HILL, having previously indicated that it required a restructuring of certain of the Group's obligations, continues to analyse its options going forward. The, Board believe that the Group's operations can bring long-term economic value to CH2M Hill, which is committed to the business operated by the Company and the Group as an important part of its global strategy. However, the ultimate parent has indicated that this is constrained by the obligations of the Company and the Group, in particular its pension liabilities. If those obligations cannot be restructured in a mutually beneficial way, then one option for the ultimate parent would be withdraw its funding for the Company and Group.
This appears to be a loaded gun (it is an American company!) pointed at the pension scheme trustees. In simple words: Limit your financial demands or we will make the company bankrupt (in which case the HPS would end up with the Pension Protection Fund). The Halcrow Holdings report indicates that activities in the UK, Ireland and Europe made a profit before taxation of £23.25M, but the other geographical segments all made losses.
Pension Scheme Financial Status
The reports also contain the Company's estimate of the status of the pension schemes that it currently supports. The original pages of the Halcrow Group report relating to pensions are here. It should be noted that the information in the report covers all the pension schemes supported by the Company, but the Halcrow Pension Scheme is the main scheme (the HPS assets were reported by the trustees as £428.7m at 31 December 2014 - about 86% of the scheme assets reported by the Company but the proportion of the liabilities may be different). The company appears to have used the 2011 triennial review of HPS as a basis for its calculations although that report has yet to be released to scheme members, probably because a new funding plan has not been agreed.
The company's interpretion of the combined pension scheme funding status is summarised by this graph which shows that the deficit appears to have almost tripled in size since 2010 (the last accounts prepared by Halcrow). 
A 13% increase in liabilities between 2013 and 2014 is surprising and highlights the absence of up-to-date information from the HPS trustees about the overall scheme status. The triennial review for 31st December 2011 has not yet been published while the 2014 HPS triennial review is due for submission by 31st March 2016. The 2014 HPS report to members is also overdue.
What is HPA Doing?
HPA has established contact with Martin Jenkins who is a lawyer specialising in pensions and who is advising on action to be undertaken.
Corporate Trustee
The HPS trustees propose to change the HPS structure to use a corporate trustee. There are administrative advantages to this arrangement but readers may be interested to study the advantages and disadvantages discussed here.
HPA Awareness Campaign
Please make all friends and acquaintances who might have an interest in the Halcrow Pension Scheme aware of the current situation and of HPA's existence. Use the link at the bottom of the email newsletter to send a copy to anyone else. It is better that they get informed more than once rather than not at all. If changes to the HPS are proposed then there may be a limited time available to react.
Subscriptions Reminder
The arrival of a new year means that the HPA treasurer is looking forward to receiving member's annual subscriptions, which remains at £10. Payment methods are described here. The need to build up financial reserves remains as pressing as ever. However, the subscription paid by new members joining after 1st October includes the following year.
Membership Database
One of the motions passed at the AGM was to collect location data for members in order to identify which MPs might be best targeted in the event that parliamentary support is needed (the Pensions Regulator may be more responsive to MPs than it is to pension scheme members). A field has been added in the newsletter subscriber database. All newsletter recipients are therefore requested to check and update their data using the link to their personal preferences at the bottom of the email newsletter. If you have any difficulties please contact the webmaster.