Halcrow Pensioners Association

Newsletter No. 28


 Newsletter No 28 : December 2017

This is a newsletter of the Halcrow Pensioners Association. More details of HPA's objectives, organisation and its activities are here. You have been sent this newsletter because you may be a member of the Halcrow Pension Scheme or its successor, HPS2. Membership of HPA is open to all interested HPS / HPS2 members and currently costs £10/year.  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.

Update From HPA Committee
The HPA committee wishes you all a happy 2018. The webmaster apologises for the long delay since the previous newsletter. The committee would welcome volunteers for the committee in general and newsletter preparation in particular. There's actually quite a lot of news to report. Notifications of the 2018 pensions have been sent out and those HPS2 members with a substantial component of pre-April 1997 contributions who are receiving pensions will have probably noticed that the increase is small compared to the current rate of inflation. However, the HPA membership subscription has not been increased and the HPA treasurer notes that the 2018 subscription will be due on 1st January. Payment details are here.

Jacobs Purchase of CH2M
We have been aware for some time that some of the senior CH2M staff who held substantial share holdings were wanting to sell their shares but there wasn't the internal demand for those shares. There was a rumour in January 2017 that CH2M was talking to Atkins but that came to nothing as Atkins was bought by SNC Lavelin. News then emerged at around the end of July 2017 that Jacobs (who had previously taken over Gibb and Babtie in UK) had agreed to buy CH2M in a deal which valued CH2M at $88 per share - more than 50% uplift on the prevailing share price and a good return on the investment in legal and other costs to reduce the Halcrow pensions liability. Jacobs announced on 18th December 2017 that the acquisition had been completed (on 15 December). $150M per year cost reduction is anticipated to be achieved though integration. It will be interesting to see which of the remaining former Halcrow offices survive.

The HPS2 trustees have published a statement on the HPS2 website which says: "We can confirm that, as expected from our initial discussions with HGL, the takeover has not of itself changed the arrangements in place for funding and operating the scheme.  We understand there will now be some integration of CH2M and HGL with Jacobs, and we are continuing our dialogue with HGL and CH2M to understand more about this. The guarantee we have from CH2M remains in place to provide additional support to the scheme, but we will explore with CH2M whether it remains the right company in the joint Jacobs/CH2M group to stand behind the scheme with HGL as the businesses become more integrated."

British Steel Pension Scheme
Halcrow Pension Scheme members are probably aware of the negotiations over the future of the British Steel Pension Scheme. It was announced in August 2017 that an RAA had been agreed in which Tata Steel would be relieved of future liability for the pension scheme in exchange for £550M plus a 33% stake in Tata Steel UK. The terms of the RAA and the implications for pensions appear to be very similar to that for HPS. However, the whole exercise has been conducted with considerable transparency which casts further doubt on the need for the secrecy which surrounded the changes to HPS.  

Complaints to the Pensions Ombudsman
HPA is aware that several complaints have been submitted to the Pensions Ombudsman regarding the consequences of closure of HPS. In July 2017 the Ombudsman announced the decision on one of the complaints (it was not upheld). Decisions on the other complaints are awaited and, given the time taken, it might be reasonable to assume that they (or the potential consequences of any decision) are being considered carefully. HPA will provide further news when it arises.

Presentation by PPF to the Occupational Pensioners Alliance
In October 2017 two senior PPF staff gave a presentation to the Occupational Pensioners Alliance (OPA) explaining the role of the PPF. One of the HPA committee members attended the meeting and gained the impression that the PPF was more thorough than the Pensions Regulator (a position which was demonstrated by the PPF's negotiations for extra funding for Toys R Us pensions scheme). The slides for the presentation are available here. It was learnt that the transfer of schemes into the PPF can take up to two years so HPS isn't overdue.

Adjustments to Pensions in Payment
The HPA committee has been contacted by two HPS2 members who had been advised by the HPS2 administration that their pension had been overpaid due to a calculation error and therefore a reduction was proposed to be made over several years to make the adjustment (ie not only a reduction in future pension payments to reflect the correct amount but a further reduction to repay the amount overpaid). Needless to say, reductions in pensions are not welcome news, particularly when added to the reduced annual increases. Given the hardship that has imposed on pension scheme members it could be hoped that the trustees could persuade the company to write off these debts. HPA would be interested to know how many people have been significantly affected by these adjustments. There appears to be a 6 year deadline from when the mistake should have been discovered with reasonable diligence.

Previous Newsletters
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.