CHC Scotia Pension Scheme News letter.

[outhouse]

Seems during the Takeover by First Reserve Corporation and the ensuing meetings between the trustees, CHC and independent legal advisors that CHC has agreed to shorten the period that the DEFICIENCY in the scheme is to be repaid.

So is one to believe that once again our pension pot of gold has been dipped into to provide financing for an ailing company. I like many others went through a difficult time after that thief Maxwell stole the previous pension fund and the troubles getting the money back, I hope that this is not to be repeated. On an up the money did arrive last month.

outhouse

[Whirlygig]

So is one to believe that once again our pension pot of gold has been dipped into to provide financing for an ailing company.

Under UK company law, that is now illegal. However, pension schemes regularly have deficits and surpluses. This mainly occurs with defined benefit schemes (i.e. your pension will be 2/3 your final salary). For these schemes, actuaries (who are people that find accountancy too exciting) estimate final salaries for staff (i.e. could be 40 years time), retirements ages, lifespan of retirees. All these could alter over the years, meaning that the fund is over/under.

When a surplus occurs, some pension schemes will have a "holiday" i.e. the employer and the current employees don't have to pay into it (or a reduced percentage). If there's a deficit though (meaning the actuaries weren't very good!), then the employer only has to make it up.

During a takeover, the buying company will want their own auditors and actuaries to look at the books and this is probably how it arose; that the new actuaries thought the fund in deficit.

Upshot? Nowt to worry about!

Cheers

Whirls

[outhouse]

Once bitten twice shy.

Thanks Whirls, as expected for the very nicely put explanation, seem to remember a similar explanation at the beginning of the Mirror Group explanations for that deficit at the beginning of the saga. However that being in the past and laws supposedly put in place to prevent a similar occurrence and a more transparent view of pension fund management, how can one get a copy of the financial report of the present situation and the ongoing agreements (seemingly three years) to allow CHC to make up the as yet unknown deficit? More detail on the actual situation and the present status of the fund would be nice.
Not having a lot to do just now other than enjoy the present run of nice weather, the BBQs in the evening and the enjoyment of friends and the glass of Red, a little investigative work would be a nice diversion.

outhouse

[SASless]

Pay Holidays for pension schemes never made sense to me.


It would appear to me....being just a simple ol' helicopter pilot (operative word being simple)....payments into the pension fund should come just like the light bill in good times and bad.

Relying upon a business to make up deficits during "bad times" just doesn't make sense.

Just as is currently happening in the USA....most ordinary investors are down eight percent or so on their investment funds while costs and inflation are going up. Business entities are confronted with rising costs for operations and by current law would now have to increase their contributions to a pension scheme at exactly the worse time.

Sounds like bad business to me!

But then again "business" would like to get out of the pension business altogether.....thus the attraction of self funded pensions with perhaps a bit of company match and a five year vestment requirement.

[quichemech]

Outhouse, why don't you have a chat with the employee trustee, there must be one and if you ring H/R they can probably give you a name.

It was my understanding that the fund has been in deficit for a while and the company have a programme in place to make up that shortfall. As someone who is obviously already lucky enough to have retired you are probably in the safest position along with thse of us with frozen assets. The guys still working are the ones who would need to worry most IMHO.

However it's nice to see that the company will accelerate the deficit programme (that is if I read the letter right).

[Variable Load]

I'm with quichemech on this one. The deficit (i.e. a shortfall in overall funds to cover ANTICIPATED future costs) was identified some time ago. The Company put in place a timetable to cover that deficit i.e. to pay more money into the fund. It could have done what I believe Bristow did and wind up the fund.

The First Reserve takeover has obviously led to a review and they decided that the time allocated to recover the deficit would be shortened. Unless I am missing something, this has to be a good thing - right?

There is no dipping in to funds, nor is this a company pension holiday. Quite the opposite!

Me thinks you are getting paranoid in your old age outhouse

[outhouse]

Many thanks all, me thinks maybe I was getting a little paranoid in my old age.

outhouse

[slip and turn]

Methinks outhouse that you weren't getting even the slightest bit paranoid in your old age but that your wisdom and eyesight continueth to fail you not

Why has the deficit not already been made up? Strikes me your newsletter simply says someone is caught holding a baby post-2004 new regulations and they ain't yet fixed it but they are responding to pressure to do so...

Generally in defined benefit schemes, those who are already retired are far better protected than those who are not, but your kind of cynicism is extremely healthy, and thereby the rest of us should be forewarned.