Overview
PPF Assessment and Buyout
Our sponsoring company, Nortel Networks UK Limited, was granted an Administration Order on January 14, 2009. This automatically triggered the commencement of the Pension Protection Fund (PPF) assessment process which purpose is to determine if a pension scheme has sufficient assets to collectively provide members with benefits which are better than can be provided by the PPF. The Trustee actively participated in the subsequent global Nortel insolvency process which eventually resulted in an agreement on how to divide the available assets between Nortel’s creditors worldwide. This agreement became effective in May 2017.
The PPF determined in August 2017 that the recoveries received by the Plan had resulted in there being sufficient available assets to collectively provide members with better benefits than would have been available under PPF rules. This ‘Section 143’ determination became binding in November 2017.
During 2018 the Trustee, in conjunction with its professional advisers, conducted a competitive buyout process to choose an insurer who was judged as most suitable to provide the benefits for the available assets.. At the same time, the Plan was able to offer most members some options on how to utilise their personal share of the available assets.
In October 2018 the Plan formally left PPF assessment and the Trustee entered into an agreement with Legal and General Assurance Society Limited (Legal & General) to provide ongoing pension benefits to most existing pensioners/dependants and also to deferred members who elected to secure a future pension from their chosen date of retirement. A number of deferred members chose to transfer their benefits to alternative approved providers and some members with smaller pension benefits were able to give up their ongoing pension for a one-off lump sum. A second distribution to all eligible members was made in June 2021.
From a practical and legal perspective, this means that the Trustee has discharged most, and in many cases all, of its obligations to all members. For all ongoing pensioners this responsibility has passed to Legal & General who will also be responsible for associated administrative activities.
The Plan has now received all recoveries expected from the global Nortel insolvency process and a third and final distribution is now in progress. We are pleased to confirm that all small one-off payments from the Plan have now been made to eligible members and we have started the process of securing final benefits for remaining Plan members with Legal & General.
Once all further distributions are complete, the Trustee will then proceed to complete the formal winding-up of the Plan and will be discharged formally from its role and responsibilities.
Trust Deed and Rules
This is the legal document that established the Plan and governs how it operates. The latest Trust Deed and Rules was signed on 18 December 2008. Once the Plan has left PPF assessment, it commences winding up. The commencement of winding-up and the securing of benefits outside of the Plan means that the Trust Deed and Rules have more limited application from October 2018. However, they will still govern any remaining Trustee duties relating to the remaining distribution mentioned above and the completion of the winding-up process.
You can download the latest Trust Deed & Rules (which runs to over 160 pages), by clicking the link below or you can request a paper copy from the Trustee Support Team who can be reached on 01707 607601 or by email at nortel-trustee@willistowerswatson.com
Statement of Investment Principles (SIP)
This sets out the principles governing investment decisions for the Plan. Each pension scheme has to have a SIP, in accordance with the Pensions Act 1995 (“the Act”) and subsequent legislation.
The Trustee is responsible for determining the Plan’s investment policy but during PPF assessment was obliged to take into account the PPF’s view on investment strategy.
The SIP covers the Investment Objectives, Risk Management and Measurement, Strategic Asset Allocation, Day to Day Management of the Assets, Additional Assets, Realisation of Investments and Socially Responsible Investments and Corporate Governance.
Although the vast majority of Plan assets have now been distributed as noted above, the SIP is still relevant to remaining Plan assets.
Click here to view latest version of the SIP dated December 2023, which was approved by the Trustees on 17th December 2023. This document references the Investment Policy Implementation Document which can be found here.
Annual Engagement Policy Implementation Statement
Please follow this link for details of how the Engagement Policy in the SIP has been followed during the period ended 31 March 2023.
Report and Accounts
The Trustee has prepared its latest set of accounts on an 18 month basis which covers the period from 1 October 2021 to 31 March 2023. These accounts were approved by the Trustee on 25 October 2023. The full set of accounts for this period can be viewed by following the link below and previous sets of accounts going back to 2009 can be accessed from the Archive Section of the website.
Report and Accounts as at 31 March 2023
Internal Dispute Resolution Procedure
With effect from 1 May 2020, the Plan’s Internal Dispute Resolution Procedure (IDRP) will move from a two stage process to a single stage process. This means that all cases will be considered by the full Trustee board without the need for you to go through the existing two stage process where complaints are first heard by the ADB Committee and then, if required, a further hearing by the full Trustee board. Many schemes these days operate a single stage IDRP, and while the two stage process has served the Plan well over many years, it was felt appropriate to move now to a single stage in order to ensure complaints are dealt with as efficiently as possible as the Plan moves closer to securing residual benefits for eligible members and completing its winding-up. If you have already submitted a stage 1 application to the ADB Committee before May 12, 2019, you will be given the option of continuing under the two stage IDRP, or to move to the new single stage process. Please follow this link to go to the new IDRP Procedure
Governance
The Plan operates using sub committees to take on various functions and report back to the main Trustee Board. Details of the main sub committees appear below.
Administration Discretions & Benefits Committee (ADB Committee)
The Administration Discretions & Benefits Committee, under delegated authority of the Trustee, is responsible for overseeing the correct administration of the Plan, reviewing quarterly management accounts, cashflow statements and exercising discretions under the Plan Rules in relation to benefits. It is constituted as follows:
- 1 Independent Trustee Director (appointed Chairman by the Trustee Board)
- 3 Member Nominated Trustee Directors
Buy-Out Committee
The Trustee established the Buy-Out committee (BOC) and delegated certain actions and responsibilities to the BOC in accordance with the Trustee’s Articles of Association and Trust Deed and Rules.
The BOC will works closely with its advisers and the rest of the Trustee Board and is constituted as follows:-
- 1 Independent Chairman of the Trustee Board
- 1 Independent Trustee Director
- 1 Member Nominated Trustee Director
Trustees
Please see the Trustee Board page
Conflicts of Interest
In accordance with the Pension Regulator’s guidance, the Board has adopted a policy to deal with conflicts of interest.