17th September 2011
Angela Dean
Chairman, Reuters Pension Review Group
Dear Angela
Thank you for your letter of 30th August. I have now consulted both with the trustees of RPF and
SPS and the company regarding the questions you raise and the most appropriate way for me to
respond.
I can understand the anxiety that may be being caused by the time that the negotiations with the
company are taking. As I mentioned previously, there is a good reason for this. Both the trustees
and the company wish to conclude an agreement in relation to pension increases
contemporaneously with concluding the 31/12/2010 valuation, and in line with the period envisaged
under our current agreement. This is due to be completed before 31/3/2012. We are on track to
achieve this. Doing so earlier may be possible and may alleviate anxiety but will not make any
financial difference to members. Any new agreement in relation to pension increases would be
effective from 01/01/2012 and it is intended would take account of inflation during 2011.
The trustees are acutely aware of the impact on members of inflation. We are also very focussed on
ensuring the overall financial health of both RPF and SPS to ensure the security of members’
pensions. Our primary role is to safeguard all members’ interests and of course we have trustees
who are directly elected by members. Consequently we don’t think it would be appropriate to
formally consult with the PRG or any other group. Of course the PRG is free to make its views and
opinions known to individual trustees, several of whom are PRG committee members, and I would
encourage you to do so.
Turning to the information requested in your letter. As you are probably aware legislation places
explicit Disclosure requirements on trustees; listing information that must be provided to members
as a matter of course and information that must be provided on request. Other than the categories of
statutory information detailed in the Disclosure legislation, there is no general requirement to
provide other, “non-statutory”, information to members. In the interests of transparency, we are
happy to provide some, but not all of the non-statutory information you have requested. Please note
that this information is confidential and not in the public domain. Prior to releasing to you I would
therefore appreciate your agreement and assurance that it will only be disclosed to PRG scheme
members and will not be posted on your or any other website. In all cases we will supply the same
data for both RPF and SPS. I have summarised below.
Member information and demographics
- We do not think it would be appropriate to provide such detailed demographics and would
refer you to our Report and Accounts and the latest actuarial valuation report which provide
overall demographics. We will supply you with a copy of our accounts for the year ended 31/12/2010.
Fund valuations and liabilities
- We will provide you with the last 3 actuarial valuation reports (2001, 2004, 2007).
- We cannot provide a latest forecast deficit; it is subject to many variables and the outcome
of valuation negotiations. However we did publish a funding check deficit for RPF as at
31/12/2010 in our June newsletter of £106m. This was calculated using assumptions
previously agreed by the trustees and company for the purpose of assessing whether RPF
could provide a discretionary pension increase in 2011. We will also send you a copy of
RPF's current statement of funding principles which explains in more detail how this figure
has been calculated. There is no such equivalent funding check for SPS, but I can advise that
SPS will have a substantial valuation deficit.
Pension adjustments and inflation
- We will provide you with annual discretionary increases paid and equivalent RPI over the
period 1993-2010.
- We will provide you with the capital costs for RPF and SPS of RPI, LPI 5%, and LPI 2.5%
over 5, 10, and 20 years, and lifetime.
- We don’t think it appropriate to provide projections of the CPI vs RPI impact on liabilities.
In any event these are dependent on the outcome of our negotiations with the company.
I hope that this letter demonstrates our good faith in being appropriately open with your group
whilst not compromising the negotiations being undertaken by the trustees. I would be very happy
to follow this up with a telephone call or face to face meeting should you wish. Claudia will
forward the aforementioned information before the end of the month once we have received the
assurance requested.
Finally I would like to emphasise that discussions with the company have thus far been constructive
and positive.
Yours Sincerely
Greg Meekings
Chairman, Reuters SPS and RPF pension schemes.