Pension trustee and telent establish comprehensive funding agreement for the GEC 1972 (Pension) plan
24 November, 2009
telent and the Trustee of the GEC 1972 Plan (“the Plan”), Stanhope Pension Trust (“the Trustee”), have established a comprehensive funding agreement in order to better secure the Plan’s funding position.
The comprehensive agreement allows telent and the Trustee to strengthen the safety and security of the pension benefits that its 56,000 members have already built up within the Plan. At the same time it allows the company to continue to invest in and grow the business. Importantly, the interests of the company and the Trustee are aligned with this agreement in advancing the security of member benefits whilst enabling the future development of the company.
Key areas of the agreement:
- Fair and balanced for all parties
- Agreement to run for 15 years
- telent will contribute a minimum of £4 million a year into the Plan for the duration
- Money from the existing escrow of approximately £500 million will be paid progressively into the Plan over the duration
- A new escrow will be established, funded by telent for the duration
- The shareholder will not take a dividend until at least 2013
- Protects the company’s growth potential
By 2023, the end of the 15-year period, the combination of expected investment returns and telent’s additional contributions should ensure the Plan is fully funded, sustainable and secure.
At the same time, and in view of its additional obligations to funding current pensions and accrued benefits, telent’s Board of Directors, after serious consideration, has concluded that there is a need to change the way in which employees build up pensions in the future, and is therefore consulting on a proposal to close the GEC 1972 Plan to future accrual. If implemented, this would allow the company to bring certainty to future pension costs. The Plan was closed to new employees in April 2007.
telent is entering into a period of consultation with its UK Employee Forum and with Unite, the recognised trade union of the company’s telecoms fixed network engineering field force, on the proposal to:
- close the Plan to future accrual after 5 April 2010; and
- offer the Plan members the opportunity to join a new defined contribution scheme, the telent 2010 Plan, from 6 April 2010
Approximately 1,300 telent employees are affected by this change.
The consultation period will end on 22 February 2010.
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With annual revenues of over £350 million, telent has decades of experience in supplying a broad range of network and communications services in the UK and Germany. Today wholly-owned by Pension Corporation, the company employs over 2,500 people and has one of the largest engineering field forces in the UK. Customers include: Airwave, BT, Deutsche Bahn, EADS, Merseyside Fire & Rescue, the Metropolitan Police, National Express, Network Rail, Stagecoach, Tube Lines, and the UK Highways Agency.
About the GEC 1972 Plan
The GEC 1972 (Pension) Plan is a defined benefit plan with approximately 56,000 members, 35,000 of whom - former employees of GEC, Marconi and telent companies - currently draw pensions, 900 are active members, and the remainder are deferred members. The Plan’s trustee is Stanhope Pension Trust (SPT), an independent company.
telent - Monica Coull, +44 (0)207 005 6260, email@example.com