In a message to all colleagues today, John Pluthero (Cable&Wireless Executive Chairman - UK) said:
"For those of you who read the press coverage over the last few days regarding our UK defined benefit pension scheme, I wanted to provide some accuracy to the coverage. I'm afraid the reporting was, as usual, a little bit sensationalist.
This, I think, is what you want and need to know:
- The PLC, our business and I personally are absolutely committed to meeting all our obligations to our various pension schemes.
- The defined benefit scheme is currently in surplus which means we have an accounting credit in our P&L but we continue to make substantial cash contributions into the scheme for the 900 colleagues who are active members of the scheme.
- We have 5,000 pensioners, 10,000 deferred pensions (i.e. in a few years time they will start drawing a pension) and about 900 active members (i.e. people paying into the defined benefit scheme currently). The total pension fund assets stand at £2.1 billion and there is a current accounting surplus of £200m although this fluctuates over time.
- Quite unlike the notion of ‘offloading’ our pension fund, our conversations with pension advisors are designed to establish whether there is scope to underwrite (i.e. guarantee to you and me) that all future obligations will be met by attaching the liability to a balance sheet much bigger and stronger than ours (i.e. someone like an insurance company).
- The pension scheme is managed by independent trustees who have a right of veto over any company proposals and who are obliged to act only in the interests of the members of the scheme. We cooperate closely with the trustees and indeed the current discussions with pension advisors are a trustee-led process. A cornerstone of our approach to any potential transaction will be that we will not short change members and we will ensure that their benefits are secure for the long term.
So, this is quite straightforward - we are not seeking to change pensioner’s rights and entitlements but simply to explore whether it is possible to secure the benefits with an insurance company at an acceptable cost to the company".
