20th Feb. 2000
Enclosed is the agenda from the pension forum plus 2 other documents which were given to us.
Item 2.
The presentation by Geoff Henry was not very impressive. Tried to justify that the decisions that were made after the 1996 valuation were correct although in hindsight these were not questionable.
I tend to disagree with this statement as it was obvious to most people that the contributing members were declining and extra funding would need to be thought off for the future.
The 1999 valuation was probably going to produce a deficit of 55 million. Although this sounds horrendous to us it appears that it is not such a great problem.
Items
Good presentation by Peter Lofthouse. There needs to be at least a 4% difference between inflation and dividends to maintain the status quo. Up to 1998 this has been more than 4% and for most of the time has been up to 12%, hence the good supiasses that have been produced. At present due to low inflation and low dividends, this figure is about 2 to 3 % and it looks like that for the near future. So extra funding will probably be required.
Investments in the new fund are split 85% shares and 15% gilt's. Old fund has a higher % of gilt's. Which have a low return at present. New tax rules from the treasury have cost the fund 90 million.
Item 4
Your questions.
1. The value of your pension will fall in real terms due to no index linking and the fact that any rises are discretionary and subject to there being surpluses being available.
2. The short answer to this was NO.
3. They say that they can back up this statement and that comparisons used to be shown in past annual reports.
4. This Question was not asked.
5. The rules of the fund state that the representation is 50% shipowners 50% union.
6. About 40% of liabilities in new fund and 60% in old fund.
7. The chief ex said that a very tight rein is kept on him by the trustees but he needs to pay reasonable salaries to keep good staff.
8. The object of this forum was to get better dialogue with the members and this meeting and the ones later in the year are for that reason, also it is hoped that these forums will continue in the future.
9. The law states that any company pension fund that has a shortfall on its funds , then the company must make up the shortfall. At present the MNOPF has no shortfall.
Item 5
The valuation certificate has to be signed off by the end of March, which means that decisions on the early retirement scheme and increased contributions will have to be made by that date.
The shipowners state that they don't feel that members would take an increase in contributions but this is not the opinion of the union.
Council are discussing a change in the union rules to allow affiliate members to speak at BGMs on pension matters.
NUMAST is developing a web site but it could be a while before it is operational as they are in the middle of changing their computer system.
P&0 have 40% of the contributing members and are actively encouraging members to change to the P&0 fund.
The next meeting in Wallasey could be interesting as the decisions from the triennial valuation will be known then.
I may have missed some points but hopefully other people may pick up on them.