Posted by JIM WILSON on 25 October 2000 at 10:35:26:

A friend of mine in HSBC has offered to put some specific questions to one of their technical specialists on pensions for their opinion. I thought I might as well give it a go as it is atleast free - I can't guarantee how useful the output will be though.

My summary of the Site (Situation) is as follows:

a) 2 schemes in one fund - sounds very flaky; plainly the legislation did not expect this to happen & my friend found this very strange - HSBC themselves had moved from Non-contrib pensions to money purchase but the funds are totally separate. (is the M scheme actually money purchase - not I guess?)

a2) what the above arrangement means (ie movement of money - avoidance of funding payments - avoidance of otherwise statutory increases ?? etc)

b) change to Deeds (whatever they are called) - is this pukka ??

c) "mis-selling" of "N" to "C" ? (& promise of increases) - companies always deny giving advice but plainly some people may be worse off by the move and from my memory the promise of increases was quite a major factor

d) can we get the increases defined properly and funds split ??

f) IBM's record in the States (ie where they are coming from as a corporation) - is this relevant ?

Any other major bullets ??

At least it would (will I hope) be an opinion for free - plainly the minister does not want to enter into giving opinion and OPRA will do their own thing in their own way - it is plainly a complex area & I guess the new laws have not been fully tested (which is what I would say IBM is doing)so professional advice would be useful at some stage.

I guess I need to get a summary of the 3 schemes (N, C and M) and the summary of the Trust document to him as back-up.

The point about this exercise is that the HSBC will not spend any time researching our exact circumstances so the more precise the questions the more useful the answers.

Posted by Pete Warren on 25 October 2000 at 16:33:28:

In Reply to: Questions to put to a Pension Specialist posted by JIM WILSON on 25 October 2000 at 10:35:26:

My two penny worth:

A) IBM have stated that the two plans are one fund, therefore cash can be transferred without penalty as it is the same fund.
A2) M plan IS money purchase.
B) Change to the trust deeds in February to retrospectively allow the transfers that had already taken place. Members should have been informed TWICE before action.
D) If indeed the M & C Plan money are found to be separate funds then for IBM to remove surplus they have to contact members and possibly make any pension from the fund index linked BEFORE surplus can be removed.


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