Halcrow Pensioners Association

Newsletter No. 38


 Newsletter No. 38 : December 2019

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 or be a former member of HPS who has transferred to the PPF. Membership of HPA is open to all interested HPS / HPS2 members and currently costs £10/year.  If you do not wish to receive the HPA newsletters then please email the webmaster to remove your name from the mailing list.

European Court of Justice Ruling
On 19 December 2019 the European Court of Justice (ECJ) ruled that pension lifeboats within the EU (which includes the PPF) should pay 100% of member benefits in cases of insolvency and if it leaves members below the poverty line. This is the result of a case brought by a German individual Gunther Bauer who has challenged the German equivalent of the PPF over the amount of pension benefits he received when his employer fell into insolvency and he suffered the complete loss of inflation protection with his pre April 1997 and other benefits. Depending on how the insolvency and below poverty line caveats are applied by the PPF and the Government, there could potentially be significantly increased funding implications for the PPF so that they are able to support any resulting increases in pension payments. The PPF has today reported it notes the ruling, that they are discussing it with DWPP (the Government) and that they will make a further statement in due course.  We therefore need to await to hear how the PPF (and the Government) intend to apply the ruling. The HPS2 Trustee would then need to consider the back-to-back implications for its members pension payments.

Members are reminded that the new HPS2 scheme rules include a requirement that if at any point you or your survivors would have received more pension if you had chosen to go into the PPF, HPS2 will pay the amount the PPF would have paid. This provides those members who chose to transfer to HPS2 with back to back protection so that they cannot be worse off than if they had chosen to transfer to the PPF. Watch this space……

HPS2 Investment Strategy
The scheme actuary's review of HPS2 at 31 December 2016 recommended that the scheme assets be split 50:50 between a growth portfolio and a "matching" portfolio (meaning low risk and matching the expected liabilities). However, the HPS2 Trustees Annual Report and Accounts period to 31st December 2018 (available to members at the Halcrow Pensions website) showed that the investment split was about 30% growth and 70% matching. The HPA committee queried this with the Trustee who explained that the shift was agreed in 2017 to take advantage of favourable movement in investment markets. However, HPA remains concerned that this leaves HPS2 less able to capture potential future investment gains which will result in the scheme's funding gap increasing. The situation will become clearer when the next triennial review (effective 31 December 2019) is published.

The Trustee's scheme report revealed that 30 deferred scheme members had transferred out of the scheme. One of these former HPS2 members prepared a note on his experience of the process. You can read it here (highly recommended). HPA is unable to dispense pensions advice and HPS2 deferred members considering this route should seek specialised advice from pensions professionals.

Strike-off Order for Halcrow Group Ltd
Earlier this month the HPA committee was disturbed to see a notice for compulsory strike-off under the filing history for Halcrow Group Ltd at Companies House. A letter was sent to the Trustee asking what measures were being taken to protect the interests of pensions scheme members. The Trustee in a letter dated 11th December 2019 responded:

"The latest update to the filing history for Halcrow Group Limited at Companies House confirms that the compulsory strike-off action has been discontinued with effect 11th December. This change in status is as a result of correspondence between the company and Companies House. The Trustee is assured that the company accounts are close to being filed."

Seasonal Greetings and 2020 Subscriptions
The HPA committee extends seasonal greetings to all readers. The HPA treasurer reminds us that once 2020 arrives then the annual subscription (still only £10) becomes due.

The Future of HPA
The need for HPA continues and among the possible ongoing tasks to look after HPA members' interests are:
1.    To closely monitor HPS2 and watch out for Jacobs trying to evade responsibility for making adequate contributions to the pension schemes. This could soon become a significant risk as the next triennial review could identify the need for increased company contributions.
2.    To examine or comment on proposals for changes to pension-related laws or regulations.
3.    Take opportunities to press for better supervision of pension schemes and their sponsoring companies.

4.    To follow the potential changes in pension scheme rules arising from the Hampshire vs PPF court decision.

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.