Pensions
Reuters pension funds resume discretionary increases
Friday 16 March 2012
Pension increases will be paid in line with increases in the UK Retail Prices Index up to a maximum of 2.5 per cent for each of the next 10 years. The increases will be backdated to 1 January 2012, though they are unlikely to reach pensioners before May or June due to payroll deadlines.
Friday’s announcement by trustees of Reuters Pension Fund (RPF) and Reuters Supplementary Pension Scheme (SPS) followed completion of negotiations with Thomson Reuters on the funds’ December 2010 actuarial valuations. The negotiations also included a fresh look at the parent company guarantees for the two defined benefit schemes, which are closed to new members.
Greg Meekings, pictured, chairman of both funds, said: “I am pleased to say that we have maintained our prudent valuation assumptions and we have agreed a plan with the company to make good the deficit at 31 December 2010 over the next eight years. We have also agreed a substantial increase in the level of Parent Company Guarantee…” The guarantee provides additional support from Thomson Reuters in certain circumstances where the principal employer, Reuters Ltd, is no longer able to support the funds.
The additional discretionary increases are consistent with those provided in pensions being earned by current Thomson Reuters employees who are members of the funds. The increases are being funded by the company, which is also funding the deficit incurred since the height of the credit crisis in 2008.
Meekings described the arrangement regarding pensioner discretionary increases as satisfactory and “a generous settlement”. He thanked Tom Glocer, who stepped down as chief executive at the end of 2011, and the Thomson Reuters management team.
“Tom stood by his commitment that the company would find a solution to the provision of discretionary pension increases from the Fund. I’m sure we would like to wish him all the best for his future now that he has retired,” he told fund members.
Pensioners have been vocal in campaigning for restoration of discretionary increases, whose absence over much of the past decade has eroded the value of their pensions.
The Pension Review Group formed in 2004 by RPF and SPS members concerned about the performance of the two funds says that since 2002 the purchasing power of their pensions has fallen by 23.3 per cent. For 2008-2011, Reuters pensioners would have needed an increase of up to 14.4 per cent to cover inflation.
The PRG welcomed the new agreement, which it said provides a degree of certainty of an increase for the next 10 years.
“Obviously, we would have hoped for larger increases each year when the September inflation figures are higher than 2.5 per cent, and also compensation for the loss of value to our pensions over the years when there has been no increase,” PRG chairman Angela Dean said. “However, we have to be realistic and recognise the tough economic climate in which our pension fund has to be managed.”
Meekings, in a talk to The Reuter Society on 6 March, endorsed the contribution made by the PRG over the last eight years, saying “the PRG has served us all very well” and adding that it was “a very valuable group”.
Dean said: “We should also acknowledge the achievement of the chairman of the Trustees, Greg Meekings, and his colleagues on the managing committees in reaching this settlement, as well the support from Thomson Reuters, and in particular from Tom Glocer, to enable a fair deal to be concluded.
“The PRG will not be disbanding, however, and will be monitoring pensions issues both within Thomson Reuters and trends externally.”
RPF, founded in 1893, is one of the oldest pension schemes and by far the larger of the two Reuters plans with net assets of £1,163,753,000 on 31 December 2010. On that date it had 7,774 members comprising 703 active members making contributions and accumulating benefits; 5,450 deferred members no longer making contributions but with benefits left in the fund for payment at a later date; and 1,576 pensioner members, including dependants of members who have died, receiving a pension.
SPS net assets were £178,252,000. The scheme had 191 members, of whom 12 were active members, 62 deferred members, and 117 pensioner members.
● SOURCE Reuters Pension Fund | Reuters Supplementary Pension Scheme | Pension Review Group
Pension talks 'constructive and positive'
Tuesday 15 November 2011
The Pension Review Group has reacted with cautious optimism to a letter from the chairman of Reuters’ two UK pension funds in which he says discussions with Thomson Reuters on a new pension agreement have been “constructive and positive”.
The comments by Greg Meekings, chairman of Reuters Pension Fund and Supplementary Pension Scheme, were in response to an earlier letter from PRG chairman Angela Dean in which she underlined pensioners’ continuing concerns about the declining value of their pensions. RPF, the larger of the two funds, has nearly 8,000 members.
With discretionary annual increases paid in only three of the last nine years the real value of RPF pensions has dropped substantially because of inflation, the PRG said. The group calculates that pensioners would need an increase of 16.7 per cent to bring the value of pensions back to the levels of early 2003. The rise needed will jump to 23.3 per cent if no increase is awarded in January.
Discussions between RPF, SPS and the company aim to produce a new pensions agreement effective from 31 March 2012. The current agreement allows for annual inflation increases only if the fund is in surplus. Both the RPF and the SPS are currently in deficit. The company’s last major injection of funds was in 2006.
The PRG said it was encouraged by comments made last December by chief executive Tom Glocer expressing his concern about the position of UK pensioners and calling on those responsible to find a way of resolving the problem, both now and in the future. “I care a lot about our obligations to our pensioners and all our pension plans around the world,” Glocer said in a talk to The Reuter Society. “We’ll do whatever we need to do.”
The PRG met last month to consider Meekings’ letter and decided to await the outcome of current discussions before taking any further action, in the hope that positive comments so far would translate into an agreement which would guarantee an annual increase in pensions.
The group was established in 2004 by retired staff of Reuters. Its objective is to restore inflation-linked increases and bring certainty to pensioners in future by ensuring there is a sound agreement in place that protects the value of pensions and the security of the pension fund.
● SOURCE Pension Review Group
The comments by Greg Meekings, chairman of Reuters Pension Fund and Supplementary Pension Scheme, were in response to an earlier letter from PRG chairman Angela Dean in which she underlined pensioners’ continuing concerns about the declining value of their pensions. RPF, the larger of the two funds, has nearly 8,000 members.
With discretionary annual increases paid in only three of the last nine years the real value of RPF pensions has dropped substantially because of inflation, the PRG said. The group calculates that pensioners would need an increase of 16.7 per cent to bring the value of pensions back to the levels of early 2003. The rise needed will jump to 23.3 per cent if no increase is awarded in January.
Discussions between RPF, SPS and the company aim to produce a new pensions agreement effective from 31 March 2012. The current agreement allows for annual inflation increases only if the fund is in surplus. Both the RPF and the SPS are currently in deficit. The company’s last major injection of funds was in 2006.
The PRG said it was encouraged by comments made last December by chief executive Tom Glocer expressing his concern about the position of UK pensioners and calling on those responsible to find a way of resolving the problem, both now and in the future. “I care a lot about our obligations to our pensioners and all our pension plans around the world,” Glocer said in a talk to The Reuter Society. “We’ll do whatever we need to do.”
The PRG met last month to consider Meekings’ letter and decided to await the outcome of current discussions before taking any further action, in the hope that positive comments so far would translate into an agreement which would guarantee an annual increase in pensions.
The group was established in 2004 by retired staff of Reuters. Its objective is to restore inflation-linked increases and bring certainty to pensioners in future by ensuring there is a sound agreement in place that protects the value of pensions and the security of the pension fund.
● SOURCE Pension Review Group
Pensioners press for automatic inflation increases
Monday 12 September 2011
The Pension Review Group is once again focusing attention on its campaign to win automatic inflation rises for all Reuters pensioners.
It has contacted the chairman of the Reuters Pension Fund trustees, Greg Meekings, and requested that members should be consulted before he signs a new deal with Thomson Reuters, which he expects to do some time in the next six months.
“Our concern is that pensioners will be presented with a solution … which may not be acceptable to us," the group’s chair Angela Dean said in a letter to Meekings.
Pensioners have had increases in only three of the last nine years, and the value of their pensions has been eroded by almost 20 per cent because of inflation.
A growing number of the 8,000 members of the RPF are becoming extremely elderly and frail, living on small pensions and facing real hardship as inflation bites into what little they get, the group said.
Thomson Reuters is one of the few major companies in Britain to have suspended inflation rises for its final salary pensioners. Most have inflation-proofing written into their pension fund rules.
CEO Tom Glocer has expressed sympathy for the plight of Reuters pensioners. “We … look forward to reaching a solution that meets our common desire to secure pensioners’ retirements,” he wrote to the PRG last year.
The rules of the current pensions agreement, established in 2006, allow for discretionary increases only when the Fund is in surplus. That agreement should have ended in 2010 but will remain in force until a new deal is negotiated with the company, which should be by next March.
● SOURCE Pension Review Group
It has contacted the chairman of the Reuters Pension Fund trustees, Greg Meekings, and requested that members should be consulted before he signs a new deal with Thomson Reuters, which he expects to do some time in the next six months.
“Our concern is that pensioners will be presented with a solution … which may not be acceptable to us," the group’s chair Angela Dean said in a letter to Meekings.
Pensioners have had increases in only three of the last nine years, and the value of their pensions has been eroded by almost 20 per cent because of inflation.
A growing number of the 8,000 members of the RPF are becoming extremely elderly and frail, living on small pensions and facing real hardship as inflation bites into what little they get, the group said.
Thomson Reuters is one of the few major companies in Britain to have suspended inflation rises for its final salary pensioners. Most have inflation-proofing written into their pension fund rules.
CEO Tom Glocer has expressed sympathy for the plight of Reuters pensioners. “We … look forward to reaching a solution that meets our common desire to secure pensioners’ retirements,” he wrote to the PRG last year.
The rules of the current pensions agreement, established in 2006, allow for discretionary increases only when the Fund is in surplus. That agreement should have ended in 2010 but will remain in force until a new deal is negotiated with the company, which should be by next March.
● SOURCE Pension Review Group
Tim Castle elected RPF trustee
Friday 07 January 2011
Tim Castle, a correspondent in Reuters’ London bureau, has been elected a member nominated trustee of Reuters Pension Fund.
He won 1,000 of the 1,265 votes cast, the balance going to Jane Payne, formerly senior technical director. One-fifth of the Fund’s 6,263 members voted in the election, which was caused by the retirement of Janice Watson.
Castle previously served as a trustee from 2002 to 2009. At the Fund’s board meeting on 30 November he was appointed chairman of the RPF investment sub-committee.
● SOURCE Reuters Pension Fund
He won 1,000 of the 1,265 votes cast, the balance going to Jane Payne, formerly senior technical director. One-fifth of the Fund’s 6,263 members voted in the election, which was caused by the retirement of Janice Watson.
Castle previously served as a trustee from 2002 to 2009. At the Fund’s board meeting on 30 November he was appointed chairman of the RPF investment sub-committee.
● SOURCE Reuters Pension Fund
Tom Glocer: We’ll end uncertainty over pension increases
Wednesday 08 December 2010
The plans – Reuters Pension Fund and the Supplementary Pension Scheme – are currently about 90 per cent funded. The company’s last major injection of funds was in 2006.
A more permanent method of increases has got to be the right approach, Glocer told members of The Reuter Society. The issue was what was a fair result. “It’s more an issue of the deficit, and an issue of what the company can contribute. It’s more an issue of what the company can do.
“I’ve told them, find some way so we don’t just leave people with uncertainty… It doesn’t sit well with me and it doesn’t sit well with Thomson colleagues as well.”
Glocer said he was mindful that there had been no inflation increase to pensions in the last two years, adding: “I care a lot about our obligations to our pensioners and all our pension plans around the world.
“We’ll do whatever we need to do,” Glocer said at the Society’s 2oth anniversary meeting in London.
“It’s not some black hole that nobody cares about. I do, the finance director does, and more important, the treasurer does.”
Answering questions put by Michael Cooling, former corporate relations manager, Glocer said he had spent a lot of time on the cultural fit between the Thomson and Reuters sides of the company. “In the longer term it’ll be the cultural dogs that don’t come back to bite.”
The CEO also made these other points:
● The financial services side of the company – the markets division’s 60 per cent of the business – was challenging and banks were not forecasting profit growth next year. Growth on the professional side of the company in 2011 would be somewhat stronger than in markets and the whole of the company could grow by five to seven per cent.
● The adoption of the Reuters Trust Principles by the entire merged company was “a pretty good test of character”.
● The resignation of columnist Neil Collins over trading in shares he owned and wrote about on the commentary service Reuters Breakingviews was less damaging than a series of issues in the Middle East. “What he did knowingly and on multiple occasions was to break the rules of the Reuters Principles and Breakingviews as well. I’m quite confident he wasn’t trading on inside information. The facts of the case were pretty straightforward. I worry more about our neutrality and independence in reporting from Israel and the Palestinian Territories because people scrutinise every word from there.”
● The Thomson Reuters Alumni group will be re-established but budgets are really tough for next year and an electronic structure will be built before events can resume, possibly in 2012 or perhaps the second half of 2011. To make it effective there had to be a proper plan to ensure communications between the disparate elements of the Thomson Reuters group.
Photo: Left to right, Reuter Society chairman Stephen Somerville, Tom Glocer and Michael Cooling.
Two contest RPF trustee vacancy
Wednesday 13 October 2010
Two candidates are contesting a vacancy as a member nominated trustee on the management committee of Reuters Pension Fund. They are Tim Castle, correspondent, London bureau, and Jane Payne, former technical manager.
The vacancy on the seven-member board arose due to the retirement of Janice Watson, who had chaired the RPF investment sub-committee, at the end of her term.
Castle is an active member of the Fund who served as a trustee from 2002 to 2009. Payne is a deferred member who worked at Reuters from 1985 to 1991 and from 2001 to 2006 and is now senior technical director with another company.
Voting in the election conducted by Electoral Reform Services closes on 29 October.
The vacancy on the seven-member board arose due to the retirement of Janice Watson, who had chaired the RPF investment sub-committee, at the end of her term.
Castle is an active member of the Fund who served as a trustee from 2002 to 2009. Payne is a deferred member who worked at Reuters from 1985 to 1991 and from 2001 to 2006 and is now senior technical director with another company.
Voting in the election conducted by Electoral Reform Services closes on 29 October.
Tom Glocer: Lack of cost of living pension increase 'an important issue'
Monday 19 July 2010
In a letter to Angela Dean, chairman of the Pension Review Group, Thomson Reuters’ chief executive addressed issues raised by Reuters pensioners and other former staff. Dean had raised matters of concern to members of Reuters Pension Fund and Supplementary Pension Scheme in an e-mail to the CEO.
“As for the important issue of pensions, I am very sympathetic,” Glocer replied. “As you are aware the current Funding Agreement was reached with the RPF trustees in 2006 pursuant to which Reuters paid off the pension deficit and a mechanism was put in place which allowed discretionary inflationary increases when the Plan is in surplus. Fortunately, increases have been granted each year since 2006 other than January 2009 – when fallout from the global financial crisis on Plan assets did not permit the trustees to approve an increase and January 2010 because RPI was negative. We are committed to continuing to work with the RPF trustees on these issues and look forward to reaching a solution that meets our common desire to secure pensioners’ retirements.
“I would like to emphasize that we have the highest regard for our retirees and other alumni in London and around the world, not only as important stakeholders but also for their part in helping to build Thomson Reuters into the global leader it is today. We are currently evaluating options for launching a global alumni program that will support more frequent communication between the company and its alumni and bring current and former employees together in London and our other major centers. It is my sincere hope that this forum, alongside the long-standing Reuters Society, will come to be highly valued by our wider retiree community.”
On the matter of the discontinued pensioners’ lunch, last held in London in April 2008, Glocer said “…it feels inappropriate to me to continue pensioners’ lunches in London for only legacy Reuters pensioners when staff all over the world have given service to Thomson Reuters and its constituent companies. We did look at the cost of organizing similar events in the now numerous locations in which we have a large population of retirees; however, this proved too expensive in the current environment…”
UK pensioners tell Thomson Reuters they feel they are 'a costly irrelevance'
Thursday 03 June 2010
Retired UK staff feel they are marginalised and are regarded by Thomson Reuters as a costly irrelevance, pensioners have told chief executive Tom Glocer.
The chairman of the Pension Review Group, Angela Dean, was denied an opportunity to ask a question at Thomson Reuters’ annual shareholders meeting; the traditional pensioners’ lunches have been “stealthily axed”; and alumni network meetings seem to have been severely cut back, if not cancelled altogether.
Dean, in a letter to Glocer, said: “Reuters UK pensioners have had no cost of living increase for five of the past eight years, resulting in significant erosion of living standards.”
She attended the AGM at Canary Wharf, London on 14 May with the intention of putting the following question openly and directly to the Thomson Reuters board:
"In the past eight years, because of the iniquitous system of discretionary annual awards – a complete change of practice from the previous 30 years – UK pensioners have suffered a real decrease in the value of their pensions, impacting most severely on those reliant on just a small retirement income from the company. If UK retail price inflation continues at the latest March rate of 4.4 per cent, this deficit could be well into double figures by the time of our next review.
“When is Thomson Reuters going to do the decent thing and rescue its British based pensioners from the threat of increasing hardship?"
Although the AGM was held in Toronto, UK shareholders had been assured in the meeting notification that there would be a video link.
“Just before the start of the meeting, we were informed that there was no interactive link to Toronto, though no reason was given, and we would have to submit any questions in writing, and they would be answered in due course,” Dean said.
“The AGM opened with a fleeting acknowledgement to shareholders in London and after that there was no other reference to this invisible group that had made the effort to attend the meeting at 5pm on a Friday. Indeed, one was left with the impression from attending that meeting, of being on the margins; we were a small number of shareholders who were probably only pensioners anyway, who did not warrant the financial outlay of an interactive link, and least of all the courtesy of making those in London feel they were part of the larger meeting and the Thomson Reuters Group.”
Dean said she handed in a written copy of the question but as yet has had no reply.
“Apart from this affront, I was left with the impression that the London shareholders who took the trouble to attend not only were invisible but non-existent. If my recollection is correct there was just one passing reference at the outset to a presence in London,” she told Glocer.
She added: “This kind of treatment does not befit a significant, wealthy international organisation with supposedly altruistic values.”
● Pension Review Group
The chairman of the Pension Review Group, Angela Dean, was denied an opportunity to ask a question at Thomson Reuters’ annual shareholders meeting; the traditional pensioners’ lunches have been “stealthily axed”; and alumni network meetings seem to have been severely cut back, if not cancelled altogether.
Dean, in a letter to Glocer, said: “Reuters UK pensioners have had no cost of living increase for five of the past eight years, resulting in significant erosion of living standards.”
She attended the AGM at Canary Wharf, London on 14 May with the intention of putting the following question openly and directly to the Thomson Reuters board:
"In the past eight years, because of the iniquitous system of discretionary annual awards – a complete change of practice from the previous 30 years – UK pensioners have suffered a real decrease in the value of their pensions, impacting most severely on those reliant on just a small retirement income from the company. If UK retail price inflation continues at the latest March rate of 4.4 per cent, this deficit could be well into double figures by the time of our next review.
“When is Thomson Reuters going to do the decent thing and rescue its British based pensioners from the threat of increasing hardship?"
Although the AGM was held in Toronto, UK shareholders had been assured in the meeting notification that there would be a video link.
“Just before the start of the meeting, we were informed that there was no interactive link to Toronto, though no reason was given, and we would have to submit any questions in writing, and they would be answered in due course,” Dean said.
“The AGM opened with a fleeting acknowledgement to shareholders in London and after that there was no other reference to this invisible group that had made the effort to attend the meeting at 5pm on a Friday. Indeed, one was left with the impression from attending that meeting, of being on the margins; we were a small number of shareholders who were probably only pensioners anyway, who did not warrant the financial outlay of an interactive link, and least of all the courtesy of making those in London feel they were part of the larger meeting and the Thomson Reuters Group.”
Dean said she handed in a written copy of the question but as yet has had no reply.
“Apart from this affront, I was left with the impression that the London shareholders who took the trouble to attend not only were invisible but non-existent. If my recollection is correct there was just one passing reference at the outset to a presence in London,” she told Glocer.
She added: “This kind of treatment does not befit a significant, wealthy international organisation with supposedly altruistic values.”
● Pension Review Group
Tony Winning elected SPS pension fund trustee
Thursday 08 April 2010
Tony Winning, a member and former chairman of the Pension Review Group, has been elected a trustee of the Reuters Supplementary Pension Scheme (SPS), the smaller of the two Reuters UK final salary pension funds. He succeeds Michael Cooling as a member-nominated director of the SPS trustee company for a five-year term.
Winning, 65, who lives in London, worked for Reuters editorial for 32 years as a correspondent and editor. He served in four continents and ended his career as Editor Asia based in Singapore.
Winning, 65, who lives in London, worked for Reuters editorial for 32 years as a correspondent and editor. He served in four continents and ended his career as Editor Asia based in Singapore.
Barry May elected pension fund trustee
Monday 21 September 2009
Barry May, editor of The Baron, has been elected a trustee of Reuters Pension Fund.
A former correspondent, editor and manager and a member of the ● Pension Review Group, he received 487 of the 1,311 votes cast by RPF members. Three other candidates contested the election: Timothy Castle (433 votes), Michael Edwards (291) and Willyum Howard (100). Some 20.3 per cent of RPF members voted in the election, which was conducted by Electoral Reform Services, an independent supplier of ballot and related services.
The RPF managing committee comprises seven trustees. The two others previously elected by Fund members are Peter Fanning and Janice Watson. Trustees nominated by the company are Greg Meekings (chairman), James Hardman, Graeme Ramsey and Martin Vickery.
● SOURCE Reuters Pension Fund
A former correspondent, editor and manager and a member of the ● Pension Review Group, he received 487 of the 1,311 votes cast by RPF members. Three other candidates contested the election: Timothy Castle (433 votes), Michael Edwards (291) and Willyum Howard (100). Some 20.3 per cent of RPF members voted in the election, which was conducted by Electoral Reform Services, an independent supplier of ballot and related services.
The RPF managing committee comprises seven trustees. The two others previously elected by Fund members are Peter Fanning and Janice Watson. Trustees nominated by the company are Greg Meekings (chairman), James Hardman, Graeme Ramsey and Martin Vickery.
● SOURCE Reuters Pension Fund
No inflation-linked increase for ex-Reuters UK pensioners
Monday 07 September 2009
Tom Glocer says Thomson Reuters cannot provide an inflation-linked pension increase to its former Reuters UK pensioners this year.
In a letter to the Pension Review Group, Thomson Reuters' CEO writes, "We do not believe we can unilaterally provide a discretionary increase at this time for the participants in the two former Reuters pension plans."
He was responding to a letter from PRG chairman Angela Dean which pointed out that senior company executives had recently had financial rewards worth many millions.
"It is hard to believe that the Company cannot afford a modest increase to the pension funds to ensure Reuters pensioners are fairly compensated, particularly in view of the financial performance of Thomson Reuters over the last year and predictions for 2009," Dean said.
Glocer replied "... To begin by addressing your request directly, we do not believe we can unilaterally provide a discretionary increase at this time for the participants in the two former Reuters pension plans (the Plans). We explain this position in the remainder of this letter.
"As you are aware, the Reuters Pension Fund (RPF), the larger of the two legacy Reuters Plans, is an unusual and very old hybrid plan which combines elements of both defined contribution and defined benefit plans. In fact, during the 100 year plus history of the RPF, Reuters never took a contribution holiday despite years of pension surpluses as we followed the practice that company contributions were fixed. Consistent with this position, it was the Plan Trustees and not management of the company that held the power to determine investment strategy, surplus or deficit status and, importantly, how to provide inflationary increases, if any, to participants.
"After a series of revisions to pension laws, a thorough review of the unusual Reuters Plans and the appearance of a deficit in the Plans, the company and the Plan Trustees entered into a Funding Agreement in 2006 pursuant to which the company made a £153m contribution to the RPF, and an undertaking to contribute an additional £40m. This served to cover Plan deficits, and thereby permit the Trustees to consider whether to make inflationary increases. The Trustees, using their discretion under the Plans and the 2006 Funding Agreement, did, in fact, grant increases of 2.7% in 2006, 3.6% in 2007 and 3.9% in 2008. In addition, consistent with the company's commitment to the retirement security of its former employees, Thomson Reuters entered into a parent company guarantee of Reuters obligations under the Plans soon after the completion of the Reuters acquisition, and fulfilled Reuters commitment to contribute another £40m to the RPF.
"With respect to the manner in which discretionary increases are to be considered, the Plans and the 2006 Funding Agreement provide that following the close of each year, the scheme actuary is to perform a funding review to assess whether there was a surplus or deficit at the close of such year. If a surplus is determined to exist, the Trustees are empowered to use up to 40% of such surplus to provide a discretionary increase on Relevant Pensions (as defined), subject to a maximum of the change in RPI in the year to the preceding September, capped at 5%. This mechanism was put in place as it was understood between the parties that the primary objective should be to secure members' benefits and that the granting of any discretionary increase should not be materially detrimental to that primary objective.
"It should thus be clear that the ability to authorize any inflationary increase is dependent on the investment performance of the Plans which is managed by the Trustees of the Plans, and not the company. As 2008 was an "anno horribilis" for the investment community, it is not surprising that the Plan Trustees have determined that no inflationary increase is possible at this time.
"We are committed to working with the Trustees of all the company's plans to find solutions which honor the contributions made by generations of Reuters and Thomson employees in building the current company. While Thomson Reuters is prepared to consider alternative arrangements with the Trustees, these discussions must await the expiration of the current 2006 Funding Agreement."
Following is the full text of the PRG's letter to Glocer:
Dear Mr Glocer
I am writing to you as Chairman of the Pension Review Group (PRG) which as you are aware, has been campaigning for a number of years to restore the annual inflation-linked pension increases for pensioners of the UK Reuters Pension Fund and Reuters Supplementary Pension Scheme.
We are delighted to see that Thomson Reuters has achieved such successful financial results for 2008, and that the outlook for this year is positive. However, for Reuters pensioners the prospect for 2009 is somewhat gloomy as, in view of the current global financial problems, we do not anticipate an increase to our pensions this year. This will mean that since 2002, the overall value of our pensions will have fallen by 13%, as measured by the increase in the Retail Prices Index.
The agreement between the Trustees and the Company for providing discretionary increases depends on there being a funding surplus, and if the financial markets continue to perform at their current level, the likelihood of future pension increases would seem remote, so our pensions will suffer an even greater loss in value. This is a serious concern for the pensioners we represent.
By contrast, we understand that pensioners who are members of the Defined Benefit Scheme in Thomson, receive a guaranteed annual increase and are not subject to the uncertainties of a funding agreement formula.
Thomson Reuters is still the only FTSE 100 company that fails to pay an annual index-linked increase to some of its pensioners who are members of a defined benefit scheme. The principle of an annual inflationary increase applies, in law, to pensions earned since 1997 and to all UK state pensions. Surely a company of this stature and wealth should not be uniquely out of step in applying this principle, and thereby penalising the very people who were instrumental in building the success of Reuters and are now most vulnerable?
Following the merger of Thomson and Reuters, the companies were involved in an exercise to equalise the benefits of the different groups of employees. We believe it is only fair that this principle of equity should be applied to pensioners.
We note that senior executives at Thomson Reuters have recently been awarded significant financial rewards worth many millions, which include compensation for former Reuters staff to recognise differences in company pension benefits. It is hard to believe that the Company cannot afford a modest increase to the pension funds to ensure Reuters pensioners are fairly compensated, particularly in view of the financial performance of Thomson Reuters over the last year and predictions for 2009.
We would ask that the Company review its position regarding inflationary increases for Reuters pensioners, and consider injecting sufficient money into the funds to enable the payment of such increases on a yearly basis.
The situation for pensioners is increasingly difficult as they can no longer rely on their savings to mitigate the effects of a decrease in the value of their pensions, so they are doubly penalised. The assurance of an annual inflationary increase, instead of the yearly uncertainty that a discretionary award brings, would go a long way to protecting us from a permanent decline in real incomes.
I hope you will give our request serious consideration and look forward to hearing from you.
Yours sincerely
Angela Dean
Chairman, Pensions Review Group
● Reuters Pension Fund members are reminded to vote by 14 September in the election for an RPF member-nominated Trustee. You can vote by post or online. The poll closes at 2:00 pm BST on that date so don't leave it until the last minute!
● SOURCE Pension Review Group
In a letter to the Pension Review Group, Thomson Reuters' CEO writes, "We do not believe we can unilaterally provide a discretionary increase at this time for the participants in the two former Reuters pension plans."
He was responding to a letter from PRG chairman Angela Dean which pointed out that senior company executives had recently had financial rewards worth many millions.
"It is hard to believe that the Company cannot afford a modest increase to the pension funds to ensure Reuters pensioners are fairly compensated, particularly in view of the financial performance of Thomson Reuters over the last year and predictions for 2009," Dean said.
Glocer replied "... To begin by addressing your request directly, we do not believe we can unilaterally provide a discretionary increase at this time for the participants in the two former Reuters pension plans (the Plans). We explain this position in the remainder of this letter.
"As you are aware, the Reuters Pension Fund (RPF), the larger of the two legacy Reuters Plans, is an unusual and very old hybrid plan which combines elements of both defined contribution and defined benefit plans. In fact, during the 100 year plus history of the RPF, Reuters never took a contribution holiday despite years of pension surpluses as we followed the practice that company contributions were fixed. Consistent with this position, it was the Plan Trustees and not management of the company that held the power to determine investment strategy, surplus or deficit status and, importantly, how to provide inflationary increases, if any, to participants.
"After a series of revisions to pension laws, a thorough review of the unusual Reuters Plans and the appearance of a deficit in the Plans, the company and the Plan Trustees entered into a Funding Agreement in 2006 pursuant to which the company made a £153m contribution to the RPF, and an undertaking to contribute an additional £40m. This served to cover Plan deficits, and thereby permit the Trustees to consider whether to make inflationary increases. The Trustees, using their discretion under the Plans and the 2006 Funding Agreement, did, in fact, grant increases of 2.7% in 2006, 3.6% in 2007 and 3.9% in 2008. In addition, consistent with the company's commitment to the retirement security of its former employees, Thomson Reuters entered into a parent company guarantee of Reuters obligations under the Plans soon after the completion of the Reuters acquisition, and fulfilled Reuters commitment to contribute another £40m to the RPF.
"With respect to the manner in which discretionary increases are to be considered, the Plans and the 2006 Funding Agreement provide that following the close of each year, the scheme actuary is to perform a funding review to assess whether there was a surplus or deficit at the close of such year. If a surplus is determined to exist, the Trustees are empowered to use up to 40% of such surplus to provide a discretionary increase on Relevant Pensions (as defined), subject to a maximum of the change in RPI in the year to the preceding September, capped at 5%. This mechanism was put in place as it was understood between the parties that the primary objective should be to secure members' benefits and that the granting of any discretionary increase should not be materially detrimental to that primary objective.
"It should thus be clear that the ability to authorize any inflationary increase is dependent on the investment performance of the Plans which is managed by the Trustees of the Plans, and not the company. As 2008 was an "anno horribilis" for the investment community, it is not surprising that the Plan Trustees have determined that no inflationary increase is possible at this time.
"We are committed to working with the Trustees of all the company's plans to find solutions which honor the contributions made by generations of Reuters and Thomson employees in building the current company. While Thomson Reuters is prepared to consider alternative arrangements with the Trustees, these discussions must await the expiration of the current 2006 Funding Agreement."
Following is the full text of the PRG's letter to Glocer:
Dear Mr Glocer
I am writing to you as Chairman of the Pension Review Group (PRG) which as you are aware, has been campaigning for a number of years to restore the annual inflation-linked pension increases for pensioners of the UK Reuters Pension Fund and Reuters Supplementary Pension Scheme.
We are delighted to see that Thomson Reuters has achieved such successful financial results for 2008, and that the outlook for this year is positive. However, for Reuters pensioners the prospect for 2009 is somewhat gloomy as, in view of the current global financial problems, we do not anticipate an increase to our pensions this year. This will mean that since 2002, the overall value of our pensions will have fallen by 13%, as measured by the increase in the Retail Prices Index.
The agreement between the Trustees and the Company for providing discretionary increases depends on there being a funding surplus, and if the financial markets continue to perform at their current level, the likelihood of future pension increases would seem remote, so our pensions will suffer an even greater loss in value. This is a serious concern for the pensioners we represent.
By contrast, we understand that pensioners who are members of the Defined Benefit Scheme in Thomson, receive a guaranteed annual increase and are not subject to the uncertainties of a funding agreement formula.
Thomson Reuters is still the only FTSE 100 company that fails to pay an annual index-linked increase to some of its pensioners who are members of a defined benefit scheme. The principle of an annual inflationary increase applies, in law, to pensions earned since 1997 and to all UK state pensions. Surely a company of this stature and wealth should not be uniquely out of step in applying this principle, and thereby penalising the very people who were instrumental in building the success of Reuters and are now most vulnerable?
Following the merger of Thomson and Reuters, the companies were involved in an exercise to equalise the benefits of the different groups of employees. We believe it is only fair that this principle of equity should be applied to pensioners.
We note that senior executives at Thomson Reuters have recently been awarded significant financial rewards worth many millions, which include compensation for former Reuters staff to recognise differences in company pension benefits. It is hard to believe that the Company cannot afford a modest increase to the pension funds to ensure Reuters pensioners are fairly compensated, particularly in view of the financial performance of Thomson Reuters over the last year and predictions for 2009.
We would ask that the Company review its position regarding inflationary increases for Reuters pensioners, and consider injecting sufficient money into the funds to enable the payment of such increases on a yearly basis.
The situation for pensioners is increasingly difficult as they can no longer rely on their savings to mitigate the effects of a decrease in the value of their pensions, so they are doubly penalised. The assurance of an annual inflationary increase, instead of the yearly uncertainty that a discretionary award brings, would go a long way to protecting us from a permanent decline in real incomes.
I hope you will give our request serious consideration and look forward to hearing from you.
Yours sincerely
Angela Dean
Chairman, Pensions Review Group
● Reuters Pension Fund members are reminded to vote by 14 September in the election for an RPF member-nominated Trustee. You can vote by post or online. The poll closes at 2:00 pm BST on that date so don't leave it until the last minute!
● SOURCE Pension Review Group
RPF trustee ballot papers circulated
Wednesday 19 August 2009
Ballot papers for the election of a member-nominated trustee to the managing committee of Reuters Pension Fund have been circulated.
Four candidates are competing for the position. They are
● Timothy Castle, correspondent, UK Online, London Bureau
● Michael Edwards, former tax director
● Willyum Howard, programme manager
● Barry May, former deputy managing editor.
The RPF managing committee comprises seven members. Three are elected and the remaining four are appointed by Thomson Reuters.
The deadline for receipt of votes by Internet or by post is 2:00 pm on Monday 14 September. The election is conducted by Electoral Reform Services.
Four candidates are competing for the position. They are
● Timothy Castle, correspondent, UK Online, London Bureau
● Michael Edwards, former tax director
● Willyum Howard, programme manager
● Barry May, former deputy managing editor.
The RPF managing committee comprises seven members. Three are elected and the remaining four are appointed by Thomson Reuters.
The deadline for receipt of votes by Internet or by post is 2:00 pm on Monday 14 September. The election is conducted by Electoral Reform Services.
Pension increase ruled out for this year
Thursday 14 May 2009
Thomson Reuters has turned its back on members of its UK pension funds and ruled out any inflation-linked increase for 2009, their fourth pay freeze in the past seven years.
The bad news, which effectively means that Reuters Pension Fund and Supplementary Pension Scheme pensioners are 13 per cent worse off, was confirmed at the Thomson Reuters annual general meeting in London on 13 May.
Pension Review Group chairman Angela Dean asked CEO Tom Glocer when the newly merged company would “do the right thing by its pensioners and pay them index-linked increases, as do other FTSE 100 companies with defined benefit schemes, and as did the old Thomson company for its UK pensioners?”
Glocer ducked the question and passed it to former Reuters chairman Niall FitzGerald, who speaks for “legacy Reuters issues” on the new Thomson Reuters board of directors.
FitzGerald noted that the RPF and SPS were in deficit at the end of 2008. This meant that under the terms of the 2006 funding agreement between old Reuters and the pension fund trustees, there could be no inflation increases this year.
FitzGerald reminded that there had been increases in the three years since the funding agreement, when Reuters put in £230 million to shore up the funds and wipe out their deficits at that time. If the funds returned to surplus by the end of this year, the trustees would be in a position to resume increases, he said.
The funding agreement between RPF/SPS and the company runs out in 2010, when it will be renegotiated. When Thomson took over Reuters last year, it said it was standing by the agreement.
Allan Ferguson, another Reuters UK pensioner who attended the AGM, said he understood that former employees of Thomson “get cost of living increases automatically”.
FitzGerald replied that Thomson Reuters had many pension schemes in many different countries. “Some have automatic indexation, some don’t. I really can’t add anything to what I said.”
David Thomson, chairman of the board and head of the Canadian company which has the controlling interest in Thomson Reuters, ended on a more conciliatory note by saying “we will take into serious consideration your concerns”.
The Pension Review Group wrote to CEO Glocer in April, ahead of the AGM, setting out the concerns of RPF/SPS pensioners and asking the company to resume annual inflation increases, which was very much the custom and practice prior to the first freeze in 2003.
The PRG letter, which the company has acknowledged but not yet provided a substantive reply, noted that Thomson Reuters was doing well and paying Glocer and other senior executives multi-million dollar salaries and bonuses. Pensioners, meanwhile, were getting poorer.
The PRG intends to publish the full text of its letter and the company’s substantive reply, when it arrives. The question asked by the PRG chairman at the AGM was as follows:
At a time when the new Thomson Reuters company is forging ahead, and its top executives from old Reuters are earning multi-million dollar salaries and bonuses, why are Reuters pensioners suffering yet another pay cut?
Elderly members of the Reuters UK defined benefit schemes are facing their fourth pension freeze in seven years, which means they are 13 per cent worse off. And this at a time when any savings they might have are producing greatly reduced returns.
When will Thomson Reuters do the right thing by its pensioners and pay them index-linked annual increases, as do other FTSE 100 companies with defined benefit schemes, and as did the old Thomson company for its UK pensioners?
The bad news, which effectively means that Reuters Pension Fund and Supplementary Pension Scheme pensioners are 13 per cent worse off, was confirmed at the Thomson Reuters annual general meeting in London on 13 May.
Pension Review Group chairman Angela Dean asked CEO Tom Glocer when the newly merged company would “do the right thing by its pensioners and pay them index-linked increases, as do other FTSE 100 companies with defined benefit schemes, and as did the old Thomson company for its UK pensioners?”
Glocer ducked the question and passed it to former Reuters chairman Niall FitzGerald, who speaks for “legacy Reuters issues” on the new Thomson Reuters board of directors.
FitzGerald noted that the RPF and SPS were in deficit at the end of 2008. This meant that under the terms of the 2006 funding agreement between old Reuters and the pension fund trustees, there could be no inflation increases this year.
FitzGerald reminded that there had been increases in the three years since the funding agreement, when Reuters put in £230 million to shore up the funds and wipe out their deficits at that time. If the funds returned to surplus by the end of this year, the trustees would be in a position to resume increases, he said.
The funding agreement between RPF/SPS and the company runs out in 2010, when it will be renegotiated. When Thomson took over Reuters last year, it said it was standing by the agreement.
Allan Ferguson, another Reuters UK pensioner who attended the AGM, said he understood that former employees of Thomson “get cost of living increases automatically”.
FitzGerald replied that Thomson Reuters had many pension schemes in many different countries. “Some have automatic indexation, some don’t. I really can’t add anything to what I said.”
David Thomson, chairman of the board and head of the Canadian company which has the controlling interest in Thomson Reuters, ended on a more conciliatory note by saying “we will take into serious consideration your concerns”.
The Pension Review Group wrote to CEO Glocer in April, ahead of the AGM, setting out the concerns of RPF/SPS pensioners and asking the company to resume annual inflation increases, which was very much the custom and practice prior to the first freeze in 2003.
The PRG letter, which the company has acknowledged but not yet provided a substantive reply, noted that Thomson Reuters was doing well and paying Glocer and other senior executives multi-million dollar salaries and bonuses. Pensioners, meanwhile, were getting poorer.
The PRG intends to publish the full text of its letter and the company’s substantive reply, when it arrives. The question asked by the PRG chairman at the AGM was as follows:
At a time when the new Thomson Reuters company is forging ahead, and its top executives from old Reuters are earning multi-million dollar salaries and bonuses, why are Reuters pensioners suffering yet another pay cut?
Elderly members of the Reuters UK defined benefit schemes are facing their fourth pension freeze in seven years, which means they are 13 per cent worse off. And this at a time when any savings they might have are producing greatly reduced returns.
When will Thomson Reuters do the right thing by its pensioners and pay them index-linked annual increases, as do other FTSE 100 companies with defined benefit schemes, and as did the old Thomson company for its UK pensioners?
Pension increase in 2009 ‘uncertain’
Thursday 25 September 2008
Prospects for an increase in Reuters UK pensions next year to keep pace with sharply rising prices are still very uncertain, the Pension Review Group said.
After three years of inflation-linked rises for RPF and SPS members, the chances of making it four years in succession are overshadowed by the turmoil in world financial markets.
The group noted that CEO Tom Glocer, announcing this year’s 3.9 per cent increase in April, pledged: “Honouring our pension commitments is something we take very seriously and will continue to do so.”
It added: “However, UK pensioners will remember the three lean years between 2003-2005, when increases were stopped and we lost around 7 per cent of our pensions to inflation. Under pressure from the SPS/RPF trustees and the Pension Review Group, the company shored up the pension fund with an injection of capital and agreed to a resumption of increases in 2006.
“But these remain discretionary and have to be justified each year. The decision on whether any increase can be paid in 2009 will follow a check on the financial position of SPS and RPF as at December 31. If there is a big enough surplus of assets over liabilities, the trustees can recommend an increase.”
With the world credit crunch causing extreme market volatility, there is no guarantee there will be enough, or indeed any surplus from the funds’ investments to increase pensions, the PRG said.
“No decision is expected much before the second quarter of 2009, although it is hoped that if we do get an increase, it will be backdated to January 1, like this year.”
The PRG wants the company to guarantee annual index-linked increases in the pension. It added:
“We keep in close touch with the trustees and other interested parties and will continue pressing the company to grant its former UK employees what the majority of FTSE 100 final salary pensioners take for granted – the security of a pension which keeps pace with inflation.”
● SOURCE Pension Review Group
After three years of inflation-linked rises for RPF and SPS members, the chances of making it four years in succession are overshadowed by the turmoil in world financial markets.
The group noted that CEO Tom Glocer, announcing this year’s 3.9 per cent increase in April, pledged: “Honouring our pension commitments is something we take very seriously and will continue to do so.”
It added: “However, UK pensioners will remember the three lean years between 2003-2005, when increases were stopped and we lost around 7 per cent of our pensions to inflation. Under pressure from the SPS/RPF trustees and the Pension Review Group, the company shored up the pension fund with an injection of capital and agreed to a resumption of increases in 2006.
“But these remain discretionary and have to be justified each year. The decision on whether any increase can be paid in 2009 will follow a check on the financial position of SPS and RPF as at December 31. If there is a big enough surplus of assets over liabilities, the trustees can recommend an increase.”
With the world credit crunch causing extreme market volatility, there is no guarantee there will be enough, or indeed any surplus from the funds’ investments to increase pensions, the PRG said.
“No decision is expected much before the second quarter of 2009, although it is hoped that if we do get an increase, it will be backdated to January 1, like this year.”
The PRG wants the company to guarantee annual index-linked increases in the pension. It added:
“We keep in close touch with the trustees and other interested parties and will continue pressing the company to grant its former UK employees what the majority of FTSE 100 final salary pensioners take for granted – the security of a pension which keeps pace with inflation.”
● SOURCE Pension Review Group
3.9% UK pensions hike confirmed
Wednesday 14 May 2008
Reuters’ UK pension funds have confirmed a 3.9 per cent discretionary increase for 2008. The figure is based on the change in the rate of inflation in the UK over the year to September 2007.
Retired staff on pensions from Reuters Pension Fund and the Supplementary Pension Scheme will receive the extra money on 15 June. It will be backdated to 1 January. The increase applies equally to pensions in payment and deferred pensions.
It is the third year in a row that pensions paid by the RPF and SPS final salary schemes have been increased in line with inflation, after increases on pensions earned before 1997 were suspended for the three years 2003-2005.
Inflation protection resumed in 2006, with pensions rising 2.7 per cent in 2006 and 3.7 per cent in 2007.
Update newsletters issued by the managing committee and trustees of the two funds said: “The increase to these pensions required the Company’s specific consent which was granted this year as a goodwill gesture, but should not be seen as a precedent for future years.”
They said the discretionary pension increases have only been possible because of the financial health of the schemes and with the company’s consent. “The position next year may be different,” they cautioned. “While the Trustees hope there will be more good news about discretionary pension increases in future, there are no guarantees this will be the case.”
Retired staff whose pensions are paid in overseas currencies have had their total pension increased in line with their local inflation.
The 3.9 per cent increase was first announced by CEO Tom Glocer at the Retired Members’ Luncheon in London on 25 April.
● SOURCE RPF and SPS Update newsletters
Retired staff on pensions from Reuters Pension Fund and the Supplementary Pension Scheme will receive the extra money on 15 June. It will be backdated to 1 January. The increase applies equally to pensions in payment and deferred pensions.
It is the third year in a row that pensions paid by the RPF and SPS final salary schemes have been increased in line with inflation, after increases on pensions earned before 1997 were suspended for the three years 2003-2005.
Inflation protection resumed in 2006, with pensions rising 2.7 per cent in 2006 and 3.7 per cent in 2007.
Update newsletters issued by the managing committee and trustees of the two funds said: “The increase to these pensions required the Company’s specific consent which was granted this year as a goodwill gesture, but should not be seen as a precedent for future years.”
They said the discretionary pension increases have only been possible because of the financial health of the schemes and with the company’s consent. “The position next year may be different,” they cautioned. “While the Trustees hope there will be more good news about discretionary pension increases in future, there are no guarantees this will be the case.”
Retired staff whose pensions are paid in overseas currencies have had their total pension increased in line with their local inflation.
The 3.9 per cent increase was first announced by CEO Tom Glocer at the Retired Members’ Luncheon in London on 25 April.
● SOURCE RPF and SPS Update newsletters
CEO declares 3.9% pension increase
Friday 25 April 2008
Tom Glocer announced a 3.9 per cent inflation-linked increase for members of Reuters’ two UK pension funds.
The announcement to more than 600 people at this year’s Retired Members’ Luncheon in London affects members of the Reuters Pension Fund and the Supplementary Pension Scheme.
The increase is in line with the rise in the UK Retail Price Index for September 2007. It is likely to be paid in June and will be backdated to January.
This is the third year in a row that pensions paid by the RPF and SPS final salary schemes have been increased in line with inflation, after increases on pensions earned before 1997 were suspended for the three years 2003-2005.
Inflation protection resumed in 2006, with pensions rising 2.7 per cent in 2006 and 3.7 per cent in 2007.
Glocer spoke about the importance of the Thomson Reuters takeover and its significance in underpinning the company’s commitment to the pension funds.
"Honouring our pension commitments is something we take very seriously and will continue to do so," he said.
He also paid tribute to Patrick O’Sullivan, Reuters welfare officer for retired staff, who is standing down as organiser of the lunch, originally an annual event and now held every two years.
O’Sullivan said that after planning every luncheon for more than 20 years he was looking forward to enjoying the next one as a guest.
Reuters’ host for the Grosvenor House hotel event was Steve Clarke, head of PR, enterprise. Keith Stafford, former editorial training manager/training editor, responded on behalf of pensioners.
Peter O’Neill‘s photo shows Pat O’Sullivan (left) with Tom Glocer.
