The following letter was sent to Paul Early following his presentation at the Dexodus AGM.
HEWLETT PACKARD PENSION ASSOCIATION
14th April 2022
Mr Paul Early
Chairman
Hewlett Packard Pension Plan Trustees
Dear Paul,
THE DEEPENING CRISIS FOR PRE-1997 SERVICE PENSIONERS
Introduction
Firstly, we would like to thank you for your informative and helpful presentation to the members of Dexodus.
We would also like to express our thanks to you and your Board for your efforts in representing, in particular, the interests of pre-97 pensioners.
While we have no detailed insight into the specific approaches and tactics taken to influence the decision outcome this year – we acknowledge your statement that it has been your strongest efforts to-date. It is our perception that whatever tactics have been used, it has most likely been with more robust data and emphasis than previously available to you.
Having said this, we also think it relevant to refer to your communication of 7th February in which it is stated: “…once again I’m afraid our response is that we have no power or influence over whether discretionary increases are granted.”.
The above quote is important to us – because we believe that the trustees have, or should have, more influence than has been the case in the past. We feel that the Trustees have a unique opportunity to increase influence, to change the perceptions of company executives, and potentially to establish a new pension policy and decision practice from the company, which has publicly stated that it is returning to the ethical policies and practices that epitomised the company in the past.
While we understand the strong hand of power held by the company and appreciate that the Trustees have no formal involvement in discretionary decisions, we believe that you have the potential to exert significant informal powers of influence and persuasion. We think that this is possible through effective use of our past work, interpretation of the Pension Regulators Code of Conduct, the precedent set by the 2022 decision outcome, reaffirmed company ethics, and in the context of the deepening crisis for our members.
While our views are clearly open to debate – we firmly believe that the right mindset is a critical aspect in finding constructive ways forward, and that the Trustee Board has significantly untapped informal power and influence, as well as formal influence through the application of the Regulators new Code of Conduct.
Continuing our journey
You may recall that in our letter acknowledging the 2022 discretionary decision outcome, we also expressed our view that we, both HPPA and the Trustees, obviously have much further to travel before reaching a fair and acceptable financial future for our members.In our letter we stated that we view the 2022 decision outcome as the first step on our journey to a better future, and our vision and goal of achieving a reparation settlement, as well as sustainable discretionary increases over our members’ remaining lifetimes.
We also believe it is an inherent aspect of the role of Trustees to aspire towards achieving this kind of vision and goal – acting and behaving in the true interests of members, which is an inherent part of the overall duty of care.
Clearly, this is a challenging goal, but we are steadfast in our belief that various alternative solutions are possible with the right mindset, strong determination, and creativity across all the stakeholders involved. We hope and believe that the environment can be created that delivers the positive outcomes we would all like to see.
Dialogue on finding solutions to the deepening crisis for pensioners with pre-1997 service
We are all fully aware of the impending cost of living crisis, with RPI forecast to exceed 10% in the next few months. This starts right now at the beginning of April with significant increases in energy, Council Tax, food and service cost.
This will be a devastating development for many of our members, and clearly the recent 3% pension increase will only partially alleviate the situation (on an after-tax basis), particularly as this follows 14 years without any increase whatsoever. It is no exaggeration to say that many members will inevitably find themselves in extremely difficult financial and degrading circumstances in the near to medium term. Few would argue with the fact that our members face the most difficult financial situation for several decades – through no fault of their own.
We therefore suggest that it is important that we now re-start the dialogue between HPPA and the Trustees as early as possible, by exploring potential ways of dealing with the crisis faced by our members. We would request that representatives of the HPPA meet with the Trustees in the near future to discuss our views, and to present to you additional information which could be suitable for your future discussions with the company. The fact that the fund is in surplus is clearly advantageous.
We sincerely hope that this proposal meets with your support, given the exceptional circumstances in which we find ourselves. We look forward to hearing from you, and will be pleased to meet with your team in the next few weeks.
Yours sincerely
The HPPA Team