About Plan

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.

From a practical and legal perspective, this means that the Trustee has discharged most, and in some cases all, of its obligations to all members and for all ongoing pensioners this responsibility has passed to Legal & General who will also be responsible for associated administrative activities.

However, since the Plan has not yet received all recoveries expected from the global Nortel insolvency process, the Trustee will retain the obligation to distribute these additional recoveries to all eligible members, which is expected to happen in 2019.

Once this further distribution is 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

Download Trust Deed and Rules

 

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 and further expected recoveries.

Click here to view latest version of the SIP dated December 2017, which was approved by the Trustees on 27th November 2017. This document references the Investment Policy Implementation Document which can be found here.

 

Report and Accounts

The Trustee prepares report and accounts on an annual basis. The accounting period for the 2018 accounts was from 1 April 2017 to 31 March 2018, and these were approved by the Trustee on 8 October 2018. The full set of accounts for this year can be viewed by following the link below and previous years going back to 2009 can be accessed from the Archive Section of the website.

Report and Accounts as at 31st March 2018

 

Governance

Following his appointment as Chairman in June 2007, David Davies carried out a review of the Governance of the Plan.

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.

 

Investment Committee

The Investment Committee is a forum established under Trustee authority with the purpose of dealing with and overseeing the management of the Plan assets.

The Committee has no formal decision making powers but is tasked to review and make recommendations to the Trustee on all investment matters. As noted above, the Investment Committee’s responsibilities are now restricted to remaining Plan assets and future recoveries and may well be dealt with by the Trustee Board as a whole. It is constituted as follows:-

  • 1 Independent Chairman of the Trustee Board
  • 1 Independent Trustee Director
  • 1 Company nominated Trustee Director
  • 1 Member Nominated Trustee Director
    and by invitation:
    Investment Adviser from Mercer

 

Administration Discretions & Benefits Committee (ADB Committee)

The Administration Discretions & Benefits Committee, under delegated authority of the Trustee, was responsible for overseeing the correct administration of the Plan, reviewing quarterly management accounts, cashflow statements, exercising discretions under the Plan/PPF Rules in relation to benefits and also dealing with the first stage of complaints via the Internal Disputes Resolution Procedure (IDRP). It was constituted as follows:

  • 1 Independent Trustee Director (appointed Chairman by the Trustee Board)
  • 3 Member Nominated Trustee Directors

The obligations of this committee have now been largely discharged following the buyout process but any remaining obligations will now be dealt with by the Trustee Board as a whole.

 

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 Company 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.