Posted: September 21st, 2015
ASSOCIATION OF MIRROR PENSIONERS AGM :
28 SEPTEMBER 2004
Gerald Mowbray our new Secretary has kindly provided the minutes of the AGM:
Minutes of the Annual General Meeting held at 11.0am on Tuesday, 28th September 2004 at St Alban’s Centre, Leigh Place, Baldwin’s Gardens, Holborn, London
David Thompson (Chairman) Gerald Mowbray (Secretary) Eric Newson (Auditor)
Roy White (Treasurer) Ray Weaver
Tony Boram Ken Hudgell Bob Avery
Brian Bass Carolyn Cluskey John Hemple
Michael Pickard Chairman, Mirror Group Trustees Ltd
Iain Urquhart Group Pensions Chief Executive, Trinity Mirror Pensions
Ralph Tomes Secretary, Mirror Group Trustees Ltd
Paul Vickers Secretary & Legal Director, Trinity Mirror plc
1.0 Chairman’s Opening Remarks:
David Thompson opened the meeting by welcoming all members present and guests representing Mirror Group Trustees and Trinity Mirror.
David Thompson then advised the meeting of the sad news of Tony Boram’s wife’s very recent death on 18th September. Sylvia Boram had been very supportive of her husband’s work for the Association, particularly in the difficult early years. David Thompson then gave details for those interested in attending the forthcoming funeral on Thursday, 30th September at Nayland Parish Church. DT will pass on the Meeting’s sympathy and good wishes to Tony Boram.
DT then thanked Trinity Mirror for its generous support of the Association and, in particular, for arranging for the latest Newsletter to be printed and some 6,700 copies distributed to all Mirror pensioners and deferred pensioners earlier this month.
DT then invited Michael Pickard to address the meeting.
2.0 Michael Pickard Address: (now posted on the Association’s website)
Michael Pickard started by saying that it is the sixth time he had addressed the Association. MP welcomed the opportunity to say a few words on the status of Mirror Group Pension Schemes and what is happening in the wider pensions world.
MP then highlighted some of the items included in the recent Pension News distributed during the summer. The over-riding message from the financial information contained in the 2003 Report & Financial Accounts is that last year was very different to 2002 performance. The Old Scheme was now in deficit and the New Scheme value had increased. However, if the schemes had to be (theoretically) wound up now then the future pensions of active and deferred members would be seriously jeopardised.
The important message is that salary-based pensions cannot be unconditionally guaranteed and the security of 100% pensions is totally linked to the prosperity of the employer. However, the Trustees have had a good relationship with the Company over the last few years. MP then described the arrangements under the Rules for any shortfalls to be made up. The Old Scheme had received £30 million from the Company during both 2002 and 2003 as per the Scheme’s Covenant.
MP then referred to the question posed by the Association ” what happens if the National titles are sold off?” The issue can only be properly addressed if any proposal is tabled. However, the key point is that the benefits of any departing members following any sale should only be transferred or preserved on terms that protect the interests of all members. The Board of Trinity Mirror have stated that it would seek professional advice, and if extra funding was required, it would be sought should the National Titles be sold in the future.
MP then gave a review of the various future changes in pension legislation, and the greater responsibilities of trustees, and the setting up of the Pensions Protection Fund next year.
3.0 Paul Vickers Presentation: (now posted on the Association’s website)
Paul Vickers confirmed that the Company continues to take a close interest in the affairs of the Association. PV added that he had been a trustee for nearly 12 years commencing soon after the dark days following Maxwell’s death.
PV then gave information on the Company’s financial health as the long-term security of the Mirror Pension Funds is intimately bound up with the financial well being of the Company. PV gave figures for 2003 and the half-year ending 30 June 2004. The figures reflected improvements on 2002.
PV then advised on the Chief Executive’s (Sly Bailey) Stabilise, Revitatalise, Grow Strategy that was streamlining operations and making large investments in new press plants in Cardiff and the Midlands. PV touched on The Mirror circulation problems following the fake Iraq photographs and the subsequent dismissal of the Editor, Piers Morgan. In hindsight, the Company should have apologised earlier.
DT thanked both MP and PV for their informative presentations and opened the Meeting for any questions to the Trustees or the Company representatives.
The following answers were given to questions from the Floor:
There was a 3% decline in circulation following the publication of the fake Iraqi photographs.
Overall circulation was circa 1.85 million copies.
MGN Trustees do not have the power as WH Smith’s, to demand the make up of pension schemes deficit. Noted that WH Smith directors’ liability fears deterred interested venture capitalists.
MGN pension schemes are not moving out of equities to bonds because of the need to meet both 3% and 5% annual pension increase rules. The present membership profile is likely to require the pension schemes to remain active until at least 2094.
The existing Covenant ended at the end of 2004 and required a revaluation in January 2004 and now continues thereafter for life of active members (8-10 years). The short-term pension schemes security (8-10 years) is 100% and long term 30%-40% unless the Company remains profitable (100%).
A question on Rule 372, re backdating 25-year service benefit for early retirement members, was not discussed at the Meeting.
The Canary Wharf lease is for 25 years – and not 10 years.
After being thanked for their attendance, presentations and answering the several questions from the Floor, the Company and Trustee representatives left the meeting at 11.50am.
4.0 Chairman’s Report:
DT opened the members-only meeting by reiterating that the MGN Trustees do not have the power to fully protect our future pensions. Furthermore, the Company’s image in the marketplace is not as strong these days. Thus a strong AMP is necessary to maintain an active watching brief on future company and pension developments.
The present Committee had made it a priority task to attract more members so that the financial status of the SMP enabled it to seek professional assistance when required in any fight to preserve its members pensions. The recent Newsletter was the first to go out to all pensioners and deferred pensioners. There were also recruitment posters now on display in the main Trinity Mirror centres. In addition, the Pensions Office is now giving out to all new retirees and leavers a welcome letter from the AMP Chairman
A meeting has been arranged in Glasgow on Monday, 4th October for Scottish members to attend. Harry Conroy, ex SDR&SM NUJ FOC and then NUJ General Secretary, has been co-opted onto the Committee and is organising the meeting. The AMP Chairman, Secretary and Treasurer will attend. The MGN Trustee officers will also be attending and giving similar presentations as those today. It is intended that this meeting will become an annual event and closely follow the London AGM.
A similar event is being considered for Manchester next year.
DT asked for the Committee to have a broader representative base and appealed for more ladies to join the Committee. He also appealed for more obituary information for other than ex journalists.
DT confirmed that AMP membership was open to all pensioners, deferred pensioners, pension members or supporters.
In response to a question on the Newsletter being published twice a year, DT replied that this was being considered. DT then paid tribute to Brian Bass and Carolyn Cluskey for their efforts in putting together the latest, very Mirror-style Newsletter. It had received a good response from readers. However, the costs and effort involved needed to be considered when deciding on more frequent Newsletter publication.
It was agreed that the available PA system in the hall was not required for future meetings.
On the question of annual or lifetime subscriptions, DT would put this question to the new Committee when it met early next year.
5.0 Treasurer’s Report:
Roy White referred to the full AMP Financial Statement for the year ended 31 March 2004 that had been published in the recent Newsletter. In summary, the General Account was £10,906.82 in credit and the Fighting Fund stood at £12,611.63. There were no questions arising and the accounts were formally approved.
RW then advised that 338 new members had been recruited since the latest Newsletter was published and some £4,400 received for the Fighting Fund. Prior to September, membership had been falling.
The suggestion of an annual sweepstake to raise monies for the Fighting Fund was left for the new committee to consider.
6.0 Secretary’s Report:
GM reiterated the appeal from the Chairman for all members to help strengthen the AMP to meet any future pension threats by them contacting colleagues on the benefits of membership. Whilst the membership decline has now been arrested as reported by the Treasurer – thanks to the wider distribution of the recent Newsletter -the need for both an increased voice and further fighting funds was still critical.
GM believed that the aim of at least £30,000 in the Fighting Fund was required to ensure that legal and other professional resources could be secured in the event of any future threat to the welfare of the Mirror pension funds. As voiced earlier from members at the meeting, the most likely threat is from any change in ownership of Trinity Mirror or its MGN subsidiary.
GM then referred to the updated AMP website organised by Ray Weaver and the facility for members to use the “Your Page” on the website for contacting colleagues, advertising holiday accommodation or items for sale. RW confirmed that members had now started to use the message board facility. As membership grew, GM considered that the availability of the website would become more important as a communication means between the AMP and its membership.
GM then advised that the next AGM is to be held on Tuesday, 27th September 2005. The venue and time is as this year’s AGM.
9.0 Election of Officers & Committee for 2004/2005:
Ray Weaver proposed, seconded by Monty Court, David Thompson be re-elected as Chairman and Gerald Mowbray as Secretary – agreed unanimously.
Ray Weaver then proposed, seconded by Arthur Saxby, Roy White be re-elected as Treasurer – agreed unanimously.
David Thompson proposed that the following committee members who had expressed their willingness to continue in their present roles be re-elected:-Bob Avery, Brian Bass, Carolyn Cluskey, Harry Conroy, John Hemple and Ray Weaver. Agreed unanimously.
Arthur Smith and Martin Skyrme did not wish to continue on the Committee and were thanked for their committee support during the last two years.
Roy White proposed, seconded by David Thompson, that Eric Newson be re-elected as Auditor – agreed unanimously.
The Chairman then appealed for more members to join the Committee and thus widen its representation.
The following members were elected unanimously at the Meeting:-Monty Court and Crawford McAfee.
The Chairman invited any others interested in joining the Committee to contact him after the meeting. The Chairman then thanked the outgoing Committee for its support during the last year.
The meeting ended at 12.15pm with a vote of thanks to the Chairman.
After the meeting had ended the following members volunteered and were co-opted onto the Committee:-Patricia Smyllie, Bill Rowntree and Arthur Saxby.
Estimated 103 members attending.
Address by Michael Pickard, Chairman of the Trustee Board
Thank you very much David, good morning ladies and gentlemen.
It is five years to the day since I first had the privilege and pleasure of addressing the annual meeting of the Association of Mirror Pensioners. I am sure that I am not alone in thinking how quickly time seems to pass these days!
Anyway I am delighted to be here, for the 6th time now, to say a few words not only about the Mirror Group Pension Schemes but also about some of the happenings in the pensions field in the wider world.
In my address over the last two years in particular, I commented on the unprecedented rate of changes in the pensions arena. Well, it probably will not surprise you that I can say the same yet again this year.
Some of what is going on is unhappy and causing pain, pain that many of you know from the consequences of what went on under Maxwell.
You will have no doubt read that in the last year, there have been more high profile examples of schemes getting into financial difficulty, where it looks as though many members will not get anything like their full pension expectations. Turner and Newall is the latest name to hit the headlines for all the wrong reasons: apparently the United States parent company is not in a financial position to put any more money in, or is and will not, and the pension scheme is seriously underfunded.
Further headlines have been made from changes in pension scheme legislation. Since we last met, there have been new laws made which will affect pension schemes. This year’s Finance Act contains a new taxation framework that will come into effect in 2006. And there is a huge Pensions Bill currently going through parliament, with over 300 clauses. This will bring new laws and new responsibilities for the way pension schemes operate.
The avowed intention of all these changes is greater security and greater simplification. I am not sure that everything will be quite so easily achieved.
Whilst all these changes in the law, these external influences, are important – it emphasises that the Mirror Group schemes cannot of course carry on in isolation – what matters most of all to you is the Mirror Group schemes. And in particular their financial health. So that is what I will now deal with, returning to the wider world in my concluding remarks.
A good starting point for reviewing the Mirror Group schemes is to highlight some of the matters that were set out in Pensions News that were issued a couple of months or so ago. At the same time I shall attempt to clarify a few issues, because following publication of the full Annual Reports and Financial Statements, your Association’s officers forwarded some very well focused questions, one of which in particular I shall also refer to.
As I say, my starting point is what was in Pensions News. But I am mindful that although the revenue accounts relate to 2003, and the investment figures relate to 31st December 2003, the Actuary’s Report showed the financial position as at 31st December 2002, which is almost 21 months ago now.
The over-riding messages from the figures in the 2003 Report and Financial Statements, reproduced in Pensions News, are :
(i) Firstly, the investment values for both the main schemes had a much different, and better, performance than the previous year. For the Old Scheme, cash demands to pay pensions meant that there was an excess of expenditure over income, which was just about matched by investment returns. For the New Scheme, the Scheme value increased by over 25%, from £104 million to £131 million.
(ii) But asset values cannot be considered in isolation from the liabilities. So the second message is that, for both the Old Scheme and the New Scheme, more money is required from the employer – yet again in the case of the New Scheme. Although equity markets have improved since the end of 2002, in his Valuation the actuary averaged the investment values over the previous three year period – a process known as ‘smoothing’. This means that with the bumper year 2000 falling out of the averaging, when it comes to interpreting the 31st December 2003 position the upward pressure on employer contributions is likely to continue.
(iii) The next message is that, if suddenly the Schemes had had to be wound up on 31st December 2002 – which of course they were not, so we are talking about a theoretical situation – then the amounts available for actives and deferreds, after providing fully for the pensioners, would have been very restricted indeed.
(iv) What this means, and this is perhaps the most important message of all, is that no final salary-based pensions can be unconditionally guaranteed. The long-term, 100%, security of final salary-based pensions is very much linked to the prosperity of the employer. That is to say, the ability of the employer to top up the Scheme’s finances.
This is so, notwithstanding the Pensions Protection Fund that is going to be introduced in the near future. This fund will only give protection up to a certain ceiling, and will not give any substantial pension increases.
So how is your Trustee Board – and the Employer – reacting to all this change and to the financial pressures? Well, and this is I believe crucial, the Trustee looks for a collaborative effort, not a confrontational one. I am glad to say that in terms of jointly addressing the issues I believe we are pushing at an open door. And in terms of agreeing a solution, the experience over the last few years has been very encouraging. But we cannot be complacent.
When there is a deficit, it is not realistic to suggest that Trustees should say to an employer: “we must have an early injection of substantial funds to cover all the shortfall”. That is no good if it prejudices the employers’ short-term financial position, or its overriding obligation to its shareholders. It also has to be borne in mind that determination of contributions to pension schemes is governed by Trust Deeds and Rules.
In relation to contribution obligations, for the New Scheme, the relevant rule reads, and I quote:
“The Employers shall pay the balance of contributions necessary (after taking account of the contributions payable by the Members) to fund the benefits under the Scheme as agreed from time to time between the Principal Employer and the Trustees (after taking the advice of the Actuary, who shall have consulted with the Principal Employer and the Trustees). The Principal Employer shall determine how such balance of contributions shall be shared between the Employers. Any of the Employers may pay an additional contribution or contributions to the Fund provided that this would not prejudice Revenue Approval.”
That is all a bit of a mouthful. But the central message is that all three parties – Trustee, Employer, Actuary – have got to work TOGETHER to plan the best way forward.
This partnership extends to investment policy too. It is important that the Trustee establishes the employer’s appetite for risk, and gets agreement for any investment policy that offers higher rewards but with higher risk, for example, investing in equities rather than fixed interest.
Returning to contributions, the contribution position for the Old Scheme is a bit more complicated, because any shortfall has to be put into the Old Scheme’s back-up scheme, the Past Service Scheme, which was set up in 1992, and the relevant rule is complex.
But the gist is that the Principal Employer has the determining power, but only after consulting the Actuary and the Trustees. In turn the actuary has to consult the Principal Employer and Trustee but also there is a covenant governing the position.
So again it is necessary for the actuary, employer and trustee to work together to take the scheme forward in a financially secure way.
I have gone into this question of responsibility for setting contribution rates not only to put it on record, but also because I am mindful that there was publicity a little while ago about the authority – or indeed power – of Trustees when there was a mooted take-over of W H Smith, the high street retailer. It was evident that those Trustees had more power than in many schemes, including Mirror Group’s.
This leads me on to a question posed by your Association, which was what is the position of the Schemes if the national titles were sold off? The likelihood of that happening is not one for the Trustees to speculate on, so you will not perhaps be surprised at the answer I gave to your officers, which was, and again I quote:
“Whilst individual members may naturally wonder what the implications might be if Trinity Mirror make any corporate disposals, the issue can only be addressed if any proposals were tabled. But the key point is that the benefits of any departing members following any sale that took place should only be transferred or preserved on terms that protect the interests of all members.
“The Board would seek professional advice, and if extra funding was required, it would be sought.”
Moving on to legislation, there is a vast field of new and proposed legislation. Most of it will have much more impact on active members than pensioners, but there are two or three matters I would like to highlight.
The first is the Pensions Protection Fund I touched on earlier. This is going to be built up like an insurance or pension fund: it is not going to be funded on a “pay-as-you-go” basis.
The intention is to start with charging employers with a levy based on a pension scheme’s size and membership numbers. Then, once the PPF’s staff have information on each Scheme’s finances, and this will be a few years ahead, there will also be a levy based on the Scheme’s financial strength. In simple terms, the stronger the scheme – that is to say, the less likely that a scheme will make a call on the PPF – then the smaller the contribution. So it will be a risk-based levy.
The protection the PPF will give will vary according to whether an individual has reached normal pension age or not. For those who have not reached normal pension age the amount of protection will be capped at £25,000 p.a. (before cash options), but without providing for pension increases in respect of service prior to April 1997.
I do not think there is going to be a limit for those past normal pension age, but future pension increases would also be severely curtailed, so there will definitely be a downside.
Under present circumstances, I cannot conceive of a situation where Trinity Mirror will be anything other than a contributor to the PPF. But like all contributors to what is essentially a compensation arrangement, where the ‘well-behaved’ pay for the failures of others, I expect that Trinity Mirror will wish to ensure that their contributions are no more than they need to be.
So I have no doubt there will be some well-focussed discussions when the Trustee gets together with employer to agree something else to come out of the new laws: what is to be known as a ‘Statement of Funding Principles’. This will essentially be a new kind of formal plan as to how a final salary pension scheme is to be funded, so that what is to be known as a ‘Statutory Funding Objective’ can be satisfied.
Amongst the differences between this and the current arrangements, are that the new Regulator will get involved if the Statutory Funding Objective is not being met, or if the Trustee and Employer cannot agree.
All this I have described is but some of what is intended to strengthen the security of final-salary based pension schemes. Let us hope this will have more success than the Maxwell-inspired changes that were implemented nearly a decade ago now, where plainly the envisaged protection has not been universally achieved.
I did mention earlier about other changes. These are more of a governance nature, rather than direct financial ones, that are going to be introduced. Examples are the strengthening of the requirements for member-nominated trustees. These will not affect Mirror Group because, putting the Chairman on one side for this purpose, already 50% of the trustees are member-nominated. This time yesterday, I was going to say that the minimum requirement in future is going to be one-third, with no facility for an employer to opt out. At Brighton yesterday the Minister said that the requirement is going to be 50%.
There are to be further regulation as to the knowledge and understanding expected of Trustees. Although we like to think that through training and focussed reading, coupled with their interest and personal qualities, new trustees Mirror Group Trustees will, over a relatively short period, acquire the necessary skills to make a good contribution, the new Pensions Bill is bringing in a certain element of compulsion.
For example, there will be a statutory duty for trustees to have “knowledge and understanding” of the:
Law relating to pensions and trusts
Principles relating to funding of schemes
Principles relating to investment
Any other prescribed matters
The upshot of all this is that trustees are going to have a bigger burden in future. In one sense this is no bad thing, because the more educated and informed the trustees are, the better it should be for the members. And it is the members that pension schemes are all about.
But it will no doubt put extra pressure on trustees, particularly those who have got demanding jobs. However, I believe that the Mirror Group pension schemes’ members are well served by those who have been either elected by the membership or appointed by the company. Long may this continue.
I am mindful that there is a lot more I might have covered, but I think it will be best if I close now, hoping that I have achieved my main objective of highlighting the main issues that you need to know about, and at the same time perhaps sparking some thoughts that might lead to some questions being addressed to the platform.
Thank you very much.
PAUL VICKERS-TRINITY MIRROR’S COMPANY SECRETARY
REPORT TO THE MIRROR PENSIONERS AGM SEPTEMBER 2004
I am very pleased to be here.
Always pleased to come as the Company’s representative and to confirm that the main board of Trinity Mirror takes a close interest in the affairs of the Association.
I have also had the privilege of being a trustee for nearly 12 years – which goes back to the dark days after Maxwell’s death and before the Global settlement.
The main reason I come is to give you news about the Company’s health.
This is important, as Michael has said, the long term security of the fund is intimately bound up with the financial well being of the Company.
As in previous years I will give you a few details of our financial results for the half year to the end of June 2004 and for the full year to December 2003.
Some of you will already know these figures, either as shareholders or from the press.
You will understand that although these figures are already a little out of date, they are the most recent that I can give you as I can only give figures that we have already announced to the Stock Exchange.
The operating profit for the ½ year was £120 million, which was 20.6% up year on year.
The operating profit for the full year was £212.5 million, which itself was 11.5% up year on year.
Turnover for the half year was £572.7 million, which was 5.6% up year on year and for the full year was £1,095, million One billion and 95 million – up 1.2%.
The operating margin on the regional newspapers rose from 23.5% to 27.7%.
Sly Bailey appointed 18 months ago. We have dubbed the current phase as Stabilise Revitalise Grow” which we believe will ensure that the Group as a whole is worth more than the sum of its parts.
a) Streamlined operations
b) So called “expert functions” – finance HR, IT reporting through to the centre.
c) “Manufacturing” – all the presses reporting into one division – use for all titles
d) Invested £90 million in new press plants in Cardiff and the Midlands.
e) Spending another £8 million on inserting equipment so that Midlands can print the National titles.
Despite this investment we have been able to continue to pay down debt. reducing it by £81 million to £523 million.
We have also made great steps towards stabilising the Circulation of the national newspapers. The Mirror had maintained as market share of 20.3%.
Then we had the fake photos.
Lots has been said about the saga and I don’t want to add too much to it other than to make a few points.
1. The first is that they were published in good faith, having been subjected to rigorous normal journalistic processes.
A huge amount has been said by armchair pundits with the benefits of hindsight about the things that could or should have been done.
Having conducted our review I can say that I don’t believe that in the real world more could have been done or would have been done by other newspapers.
2. Why didn’t we apologise earlier?
This is where I will apply hindsight and say we probably should have done.
It wasn’t until a press conference held by the Queen’s Lancashire Regiment that we were given anything close to proof that they were fake – we immediately apologised.
3. Why did we fire Piers?
This is simple, although quite sad.
The bald fact is that whatever the rights or wrongs of the decision to publish he was responsible for publishing fake photographs. The credibility of the paper suffered and would have continued to suffer had he stayed.
He was a great and inspiring editor but we believe that he had reached the end of the road.
The good news is that we have now appointed Richard Wallace, who we believe will be at least as good as Piers if not better.
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