Pension news (Summer 2010)
News From the Chairman
Welcome to the Summer 2010 edition of the IPS Newsletter
Dear members, what a difference a year makes!
When I wrote to you a year ago in the Spring 2009 newsletter, we were in the eye of the storm, in the middle of what can be deemed the worst financial crisis since the second world war. The Scheme’s assets were £3,572m and its funding position was 86% coverage of the liabilities.
Six months later, the December 2009 newsletter noted that we were seeing some evidence of economic recovery and signs of green shoots. The Scheme’s funding position had improved to 90% coverage.
For the Summer 2010 newsletter, I am delighted to announce to you that, at 31 March 2010, the Scheme’s funding position has improved to 93%, i.e. back to the level in March 2008.
However there is no time for complacency; the recent and serious troubles in the Euro zone are leading to another crisis of confidence in the markets, and we must remain alert to further problems.
In this edition of the newsletter, we provide you with an update of the financial situation of the Scheme as well as the Summary Funding Statement for March 2010, as required by the Pensions Regulator (pages 5 to 8)
You will see from the analysis that our assets were £3,883m in March 2008 and £3,879m in 2010. Superfi cially that may seem like a fl at performance (although that would still be good considering the global credit crisis) however that is not the full story for our Scheme. As a mature scheme with c.90,000 pensioners and deferred members and only c.900 actives, we get virtually no more member contributions to the Scheme. We are therefore a substantial NET PAYER of benefi ts each year and consequently will, unlike very active schemes, naturally erode our asset base year by year. In the last two years the Scheme’s net payments (benefi ts less contributions) were £350 million. Taking this into account means that the effective increase in performance of the Scheme assets was 9% between 2008 and 2010 which is a very good performance from a scheme that is unable to take much risk in its investment strategy.
We also confi rm the annual pension increase applicable from 1 April 2010 was 3% (unless another guarantee applied). I ask that you pay particular attention to the information provided in this newsletter on commutation, pension revaluation and the free tax advice offered by TOP for the elderly.
Finally, it is with great pleasure that I announce the nomination of Nigel Casson-Moss as a Member Nominated Director of the Invensys Pension Scheme. Nigel brings a wealth of experience and expertise to the Board, especially related to IPS: you might remember that Nigel was General Manager of the Scheme from 2004 to 2008. A more detailed biography can be found on page 13.
Kathleen O’Donovan
Chairman of the Trustee of
the Invensys Pension Scheme
Click here to download the the Summer 2010 IPS Pensions News
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