R Hartt, Field Services; R Mills, Pensioner; S Requena-Rueda, Coventry; D Slack, Field Services; C Walton, Pensioner; P Wharton, Marconi Selenia.
It was noted that Peter Wharton had mistakenly been shown to be present at the meeting, but otherwise there were no comments.
Dawn Hampton said that she would ensure that the October 2004 PCC meeting minutes were approved by the legal department for display on the Marconi Pensions web site. (Post meeting note: the October minutes are now displayed on the external Pensions Office web site.) Vic Webster then queried why the minutes appeared to be so long in being issued to the PCC reps. Ken Buckley, secretary, apologised for the longer than usual time he had taken to forward the first draft October 2004 minutes to the Pensions Office. This was due to personal reasons.
The Board had agreed that the Terms of Reference of the Strategy Group could be given to the PCC members. Mick Elliott noted that any working party of the Strategy Group would not make decisions, but rather would report their findings to the Board. Pat Moloney and Vic Webster added that in some cases, the Board might direct the Strategy Group to consider certain proposals prior to the final one(s) being passed to the Board for approval.
The Report and Accounts for the year ending April 2004 had been distributed to PCC reps since the October meeting.
This was presented by Pat Moloney. He reported on items covered in the Investment Committee meeting of the 25 November 2004 and the Trustee meeting of the 7 December 2004. A summary is shown below. A more detailed report was handed out to the PCC members present.
Dawn noted that the impact on the Plan and the effect on individuals of the Disability Discrimination Act is currently under review. This includes any possible effect on Death in Service benefits.
With regard to the Pension Protection Fund, the levy will consist of a scheme based element, related in some way to membership numbers, and a risk based element, although the way in which risk will be assessed is not yet clear. Dawn handed out a Pensions Office note giving more detail of their understanding to date of the key points of the Pension Protection Fund.
Steve Radford thought that whilst we may review our own Plan rules in respect of concurrency, he personally saw no reason to change, even if concurrency was legally permitted. Vic Webster pointed out that the new legislation would give scope for avoiding situations where someone who had been put on a lower salary in later years would lose out on a pension based on final salary.
Mick Elliott pointed out that the new Lifetime Allowance may allow someone with long service to continue paying AVCs without reaching the two thirds of final salary pension cap. Steve thought that the most significant effect of the new Finance Act was on AVCs, as the existing Inland Revenue restrictions were effectively being relaxed.
Sean Leahy expressed great concern at the possible implications of the Joint Working Group task 'Exploration of the possible funding consequences of alternative funding strategies in various future scenarios'. He was concerned that this may lead to an alternative pension scheme (e.g. not based on final salary). Vic said that this was not in the current remit of the JWG. This also led to some discussion on the significance of the assumptions made in the triennial Actuarial Review.
John Leaney reported that following the training survey, the Directors have now had their individual training needs assessed and been given their training profile. Vic pointed out that while it was not a requirement of new regulations that all Trustee Directors should be familiar with all aspects of pension funds, the Trustee believes that it is good practise to look continually at raising the skills and knowledge of Directors. It should be adequate to know where to get information when it is needed. Pat noted that a trustee would be expected to seek professional advice where relevant. Vic added that before John Brew left as Board chairman, he said that he had chaired a number of pension plans, and he was complementary about the level of knowledge of the GEC Plan Trustee Directors.
Dawn Hampton apologised on behalf of Pensions Office that this agenda item, which was to review the 2003 - 2004 Report and Accounts, would be deferred to the next PCC meeting.
The purpose of this item was to find a replacement for Mick Elliott whose tenure as a MND will end in April 2005. The PCC chairman, Peter Dronfield, on behalf of all the PCC members, thanked Mick for his efforts and service as an MND.
Mick then queried the wording of the agenda item, as it didn't specifically say 'election' of a new MND. Mick said that bearing in mind there were some active PCC members absent from today's meeting, he wanted to be sure that everyone eligible had been given the opportunity of being put forward for the position. Sean said that speaking for the Coventry site, he had discussed the situation with Sergio Requena-Rueda who was satisfied for us to proceed. Steve Radford said that he didn't know if the two actives from Field Services who were absent today were interested (Robert Hartt and Dave Slack). John Leaney said that he was not aware that they were interested.
Sean Leahy was then nominated as an MND candidate by Amanda Lilley, and seconded by Pat Moloney. Peter Dronfield then nominated Andy Barker, and was seconded by Ken Buckley.
The two candidates then gave a brief resume of themselves. Those PCC reps in attendance then had a secret ballot of the two candidates, and Andy Barker was duly chosen as the PCC's nomination to the Board to replace Mick Elliott.
John Leaney said that in the past, the PCC had discussed that non MND Trustees might attend the PCC meetings. At the last Directors' meeting, they had been given the option of coming to our PCC meetings.
Pat Moloney noted that questions were regularly asked of PCC members on SERPS, S2P and APPs, where people had to make quite complex decisions. Pat didn't claim much understanding of these and asked if a presentation could be made in the PCC forum on these subjects. Mick queried if it was the role of the PCCs to do this, but Vic thought that it ought to be a responsibility of the company to give such training/awareness, as it was a company decision to contract into SERPS/S2P.
Dawn said that this had been identified as a training need for some staff in MPO and that MPO was looking to see if the DWP could do this. Steve asked if training was given at Stafford, could the PCC reps be offered the option of sitting in.
John Leaney warned everyone about the danger of giving financial advice.
Dawn said that in this year's pension statements, they were looking to see if it would be possible to include some information about the state SERPS/S2P pension. Peter Eykelenboom added that three out of four pensions questions he was asked seemed to relate to SERPS/S2P, and he would like to be in a position to inform (but not of course advise).
Graham Band noted that following the recent Trevor MacDonald TV program on the PPF, he had been asked lots of questions about it. Dawn said it was difficult to give complete information, as it is being released in dribs and drabs. Ian Wood suggested looking at the two web sites http://www.thepensionservice.gov.uk/ and http://www.dwp.gov.uk/ for more information. John Leaney added that there were 114 sections in the new PPF legislation.
Dawn noted that the forthcoming newsletter is expected to include the salient features of the Report and Accounts for the last year.
This was planned for Wednesday 6 April 2005 at the Grange, Coventry. It will include a session on the Report and Accounts for 2003/4, deferred from today's meeting.
(Sergio to make the arrangements).
Ken Buckley 20/1/2005
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