Newsletter No. 23
HALCROW PENSIONERS ASSOCIATION
Newsletter No 23 : August 2016
You have been sent this newsletter because you may be a member of the Halcrow Pension Scheme. If you are not a member then please use the unsubscribe link at the bottom of this email to remove your name from the mailing list or email the webmaster to remove your name.
HPA's Updated Advice Regarding the Options Selection
Members of the Committee met our solicitor and a QC on 23 August, and the primary purpose of this newsletter is to update members on the current legal position, and to explain how that affects the options that Halcrow and the trustees have put forward. After taking the legal advice we believe that there are some avenues we can explore further. They may or may not lead somewhere, but we cannot offer any guarantees of success. What is clear, however, is that our legal options will not have effect before 31 August.
The trustees and the companies want you to make your decision before then. Our lawyers say that we must be cautious about offering advice as to the way you make your decision. In particular we are not in a position to provide any financial advice and do not purport to do so. However we can offer some views on the legal parameters within which your decision will take effect.
Option A: Confirm that you want to transfer to the new pension scheme
The result will be that you become entitled to the benefits that the new scheme provides. The literature that the trustees and the companies have provided says that, in all cases, the new scheme benefits will be better than the benefits that the PPF will provide. If they are not, they say that the new scheme benefits will be improved at least to the PPF level. We are not inclined to take that on trust, and our lawyers are checking the formal documents that govern the new scheme (the trust deed and rules). What is clear, however, is that for these purposes the PPF level of benefits is fixed in accordance with the PPF legislation as at the transfer date, so if the PPF level of benefits improves in the future, the improvements will not be passed on to HPS2 members. You will have to take a view as to whether the PPF level will be improved in the future, and even if it is, whether the improvements will outweigh the additional benefits that HPS2 provides and that the PPF currently does not.
The promise of the new scheme’s benefits is as secure as the ability of the new scheme to pay them. If it has insufficient money you will be left with a promise to pay which cannot be honoured. We are told by the trustees, however, that the new scheme will itself be eligible for entry into the PPF, so if Halcrow and CH2M failed to provide it with sufficient money (because they were insolvent) then we would all be back at square one and facing PPF entry. If there is any legal avenue to explore, by definition it can only be directed at improving the position of members who transfer to the new scheme.
Option B: Confirm that you do not want to transfer to the new scheme
We have not seen the RAA itself. We have asked for it, but we have not been given a copy. But if it follows the pattern our lawyers anticipate, the only company with an obligation to fund the HPS will be a company that is designed to become insolvent. When it does, the HPS will enter a period of assessment by the PPF to ascertain whether it is capable of recovery (which, of course, it will not). Benefits will be reduced to the PPF level during the assessment period and once the assessment period ends, which will not take long, you will be paid by the PPF instead of the HPS at PPF levels. Neither the trustees during the assessment period, nor the PPF after transfer to the PPF, have any option but to pay benefits at the level set under the Pensions Act 2004. To improve benefits would require a change to the law.
Option C: Do nothing
This has the same effect as Option B. The trustees cannot transfer your entitlements to the new scheme without your consent. That follows from the High Court judgment handed down by Asplin J. It follows that if you do nothing your entitlements will be reduced to the PPF level as soon as the straw-man sponsor of the HPS becomes insolvent and the HPS enters a PPF assessment period. They will only be improved if the Pensions Act 2004 or the secondary legislation applicable to the PPF are amended.
Option D: Send a rejection letter
The trustees (and their supporting Pensions Team) have made it plain that a decision not to make a decision will be regarded as a decision not to transfer. In other words, it will be treated as if you had accepted Option B, and all that follows from that.
Our advice, however, is that if you wish to transfer to HPS2 you should also give a positive indication to do so in a letter. We would suggest the following wording: “Although I am concerned and disappointed that: (a) I have not been allowed to see the RAA in this case and have not received any detail as to how it came to be negotiated; and (b) members of the Scheme were not separately represented during this process, I consider that the options provided present me with no alternative but to transfer”.
It remains our firm view that our rights to a fair hearing have been traduced. We have a legal right to express our point of view before our entitlement to benefits under the HPS is denied by the operation of the RAA mechanism that we are now being presented with. Sadly, given the time pressure, we must all make a decision before 31 August and there is no legal avenue available to us that provides a realistic prospect of delaying this date further.
We remain committed to pursuing any legal (or other) means open to us to address the justice of our case, and we will keep you informed as to our progress. Meanwhile, our solicitor has written to Sackers and to tPR and we await a response to both letters.
Please Spread the Word About HPA
Given the current situation which has major implications for HPS members' future financial security, HPA wants to reach out to as many members of HPS as possible. The ongoing media campaign should help in enhancing awareness but please dredge through your individual memories and make all former colleagues who might have an interest in the Halcrow Pension Scheme aware of the current situation and of HPA's existence. HPA endeavours to represent all members of HPS, not just those in receipt of a pension. The underlying reason for forming HPA still exists and could well continue long into the future. This will be a subject for discussion at the next AGM but, at present, the committee expects HPA to remain open for business.
If you haven't been with HPA from the start or want to remind yourself of previous events then you can browse through the previous newsletters for which there is a full list here.