Newsletter No. 43
HALCROW PENSIONERS ASSOCIATION
Newsletter No. 43 : December 2020
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.
The HPA committee wishes all readers the most enjoyable Christmas obtainable in the current circumstances and hopes that 2021 will bring better news.
2021 HPA Subscriptions Holiday
Normally this newsletter would be reminding readers that their subscriptions for the forthcoming year will be due for payment. However, we are currently living in a period of surprises and, to continue this trend, the HPA committee decided at a recent meeting to have a subscriptions holiday for 2021 so please do NOT send your £10 to the treasurer. Those who are paid-up members on 31st December 2020 will automatically remain as paid-up members up to 31st December 2021. Any membership subscriptions received from existing paid-up members during 2021 will be credited against future years but subscriptions for new members will be treated as being for 2021.
The HPS2 Triennial Review
We recently checked the status of the HPS2 Triennial Review with the Trustee and were advised that discussions with Jacobs were continuing but should be completed before the end March 2021 which is the statutory deadline after which the Pensions Regulator should take enforcement action (but seemed to be happy to keep watching CH2M kick the HPS ball down the road). We will comment on the outcome of the review in due course when it is made available.
The 2019 Jacobs UK Ltd Annual Report and Financial Statements
The most recent annual report for Jacobs UK was published at Companies House on 30th November. The Jacobs report covers the year up to 30 September 2019 so the transfer of HPS2 is not included in the period. However, Note 32 on page 80 relating to post balance sheet events discusses the post-Sept 2019 transfer of HPS2 to the sponsorship of Jacobs UK Ltd with HGL liabilities taken on by Jacobs UK Ltd in December 2019 with all trade and the majority of HGL assets transferred to Jacobs UK Ltd in October 2019.
Prior to sponsorship of HPS2 being transferred to Jacobs UK, the company sponsored three other closed defined benefit pension schemes: Jacobs Engineering UK, Babtie Group and Allot & Lomax. Note 29 of the annual report provides extensive financial data about these schemes but they appear to be in relatively good financial health compared to HPS2 with expected company contributions in the year to September 2020 being £900k, £400k, £200k respectively. It will be interesting to see HPS2 being discussed in same level of detail as these three schemes in 2020 accounts when published.
The 2019 Halcrow Group Ltd (HGL) annual report and financial statements should have been submitted to Companies House by 30 September 2020 but is not yet available. This report will be of interest as the period includes the transfer of the HPS2 sponsorship to Jacobs UK and should clarify what remained of HGL at the end of 2019.
The Pensions Superfund
There was mention in the news about the Pensions Superfund being interested in taking over the Arcadia pension schemes (which we understand is about to enter PPF assessment). What is the Pensions Superfund? It's explained here and the objective is to use the economies of scale to achieve better returns and thus be able to meet the future pension obligations. Unfortunately for HPS members, this Superfund was only established in 2018 and thus not an option for HPS.
Halcrow Pension Scheme No. 2 Investment Strategy
Page 15 of the 2019 HPS2 Trustee's Annual Report and Accounts includes the statement "In November 2019, the Trustee decided to re-weight the Scheme's equity allocation more towards global equities with less in UK equities. The Scheme's equity allocation will be reweighted from 50% UK, 50% overseas to 30% UK, 70% overseas. This is to be implemented in several tranches, the first occurred in December 2019 and moved one-third of the way." It is surprising for a global organisation to have had such a large reliance on UK growth and, if this bias towards UK equities has been the situation for many years, then it helps explain the sub-par financial health of HPS / HPS2 and contrasts with the approach taken by the Pensions Superfund.
The Ex-Halcrow Diplomat
Many of you will recall seeing the report about Stephen Ellison the British diplomat who saved a drowning woman in China (also this). An HPA member recognised the name and face as being someone who had previously worked in Burderop Park and then worked for Halcrow/CH2M in China. He evidently liked China enough to take another job there and the excellent PR he generated for the British government has probably more than offset any reprimand for not having an approved risk assessment before jumping into the water.
The Future of HPA
The need for HPA continues and among the possible ongoing tasks to look after HPA members' interests are:
1. To keep HPA members informed about HPS2 and other pension-related matters.
2. To closely monitor HPS2, the HPS2 Trustee and Jacobs UK (the scheme sponsoring company) to ensure that adequate contributions are made to the pension schemes. This could soon become a significant risk as the ongoing HPS2 triennial review could identify the need for increased company contributions.
3. To examine or comment on proposals for changes to pension-related laws or regulations.
4. Take opportunities to press for better supervision of pension schemes and their sponsoring companies.
5. To follow the potential changes in pension scheme rules arising from the Hampshire vs PPF and Bauer court decisions.
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.