Pensions from 2009

The Pensions Debate

Meeting with Directors of the Trustee Company

You may remember in the last Update (No. 10) there was a request for feedback about the idea of trying to get a meeting with the pension scheme trustees. A note was attached, drafted by Godfrey Thomas, asking for your views and it included four potential questions to put to the trustees.

Of the people who responded everyone was in favour of a meeting and a small number expressed an interest in attending. This resulted in Godfrey writing to the Chairman of the Pension Trustee company, Bob Hutton, making the request.

The request appears to have been well received and it resulted in a meeting on Monday 12th January 2009.

The attendees were:
Pensioner & Deferred members: Godfrey Thomas, Peter Weston, Brett Clarbour & Steve McCarthy ( two others could not attend due to sickness)
Trustee Company Directors: Bob Hutton, Roger Southgate & Jean-Francois Gavanou
Atos Origin UK: Margaret Kaleher (Pensions Manager)
Xafinity (scheme administrators): Bernard Jennings
Nabarros (scheme solicitors): Kate Richards & another colleague who took notes

It was agreed that the notes from the meeting could be circulated to our audience when they are available so I will only try and give a flavour of the discussions. Our concerns were clearly taken seriously given the meeting attendees. It was stressed that the trustees could not answer questions on behalf of Atos Origin UK (AO) with whom they had negotiated the 'New Deal' pension arrangements, part of which was the loss of discretionary increases.

The trustees said they had tried to keep the discretionary increases off the negotiating table but AO had insisted their removal was non-negotiable. The trustees could not give a figure for what the annual costs are for providing the lost increases, only that for every £1m paid out as benefits it requires a sum of about £15m in the pension fund.

Trustees still have the ability to increase pensions under the scheme, but in practice this will not happen in the foreseeable future.

AO also insisted that deferred members would not benefit from the one-off 5% increase given to existing staff and pensioners.

AO at one time gave the trustees an ultimatum that unless they accepted the whole New Deal package then they would just force all the existing staff to have new contracts incorporating it. In the event the trustees did get extra concessions from AO.

The trustees were unaware of the £45m sum in AO's accounts which were an accrual against the possibility of paying out further discretionary increases and were then released as result of the New Deal being put in place. Less than 50% of the pension fund is now in equities, quite a lot being put into cash before the autumn stock market crash.

The trustees believe the scheme is at only a small risk of being liquidated or sold off to a third party because that would need the fund to be brought to a level of funding that fully met liabilities, thus requiring very large cash injections from AO.

Some improvements to member communications were discussed.

The door was left open if we want to have a further meeting with the trustees in the future.

As always if you have anything to share then please let me know.

With best regards

Steve McCarthy

Pensions update 9 - posted 29th July 2008 by Steve McCarthy

Pension Increases

In the previous Update I mentioned that a number of formal disputes had been lodged with the Scheme's third party adjudicator. The first of these concerned the wording in the 1998 Scheme Booklet which implied that there would be RPI increases on the full pension in payment. This case has been lost on the basis that the booklet came with a letter saying that the booklet only covered the situation from 1997 onwards when new legislation was introduced. Also the scheme rules (the trust deed document) at the time were also clear that pre-1997 increases were at the company's discretion.

Further work has also gone on to see what earlier versions of the scheme's trust deed document actually said about increases. So far details from the 1995 and 1987 documents have been seen. Unfortunately they both say the company has to agree to any increases.

Pensioner nominated Trustee

Roger Southgate was elected as a trustee a few months ago and had offered to meet up with some pensioner members after his initial training. Unfortunately Roger declined from holding the meeting after he was advised that it would not be appropriate. As a result Roger has provided the following explanation for this Update:

" I was very pleased to be selected from the strong list of candidates for the position of the Pensioner Nominated Trustee. The election of a Pensioner Nominated Trustee was co-incident with Steve McCarthy creating this on-line forum for sharing information to a set of pensioners. However, as I learned on my initial induction training, all Trustees must act at all times in the best interests of all scheme beneficiaries. This is a legal responsibility which disallows individuals from having any partiality towards any separate classes of beneficiary. This is as true for the Company Nominated Trustees as it is for the Member Nominated Trustees. You can be sure that there is now a voice of a pensioner on the Board of Trustees, and as a group we need to provide appropriate communication and be responsive to requests for information. However, I cannot act specifically on behalf of a "pensioner lobby". Against my original expectation, I cannot meet any group of pensioners or provide them with information not available to all beneficiaries. Hence it is totally correct that Steve is free to organise such a group, and I have to be separate, abiding by the guidance for Trustees, as demanded by the Pensions Regulator. I hope this explains why my communicating through this medium has to be content free!

After my appointment, when I told friends and contacts involved in the Pensions industry, their general reaction was to question whether I really understood my responsibilities. While I knew it was a very responsible role, I probably was not aware of the full set of skills and experience it would need. I trust myself to deal sensibly with the detailed day-to-day issues raised to the Trustees for decision taking. I was also aware that I would be party to critical decisions on investments to maximise the value of the fund consistent with taking the minimum level of risk. I probably was not aware of my formal responsibility to monitor the behaviour of the Principal Employer and to report breaches of the law to Pensions Regulator, nor would I have expected the degree to which the Trustees have had to be negotiators and to decide how and when to use legal counsel.

In addition to the scheduled quarterly Trustee meetings, there have been regular meetings concentrating on the investment strategy and numerous training sessions covering the responsibilities of Trustees, the rules on individual conflicts of interest, and extensive briefings on investment options. It has required a significant level of commitment, but I am really enjoying being involved in this role, and I am acutely aware of its importance."

Other points

It appears there have been other changes at the Trustees, in particular with the Leni Vincent, the Chair, stepping down. Hopefully we will see the full list of trustees in the next communication from the company. Obviously if anyone has further information let me know.

I would like to make the point that the information I provide in these Updates comes from a small number of people who have been pursuing various issues around the pension scheme. The idea behind the Updates was for people to share information. I hope that this continues for all our benefit. So if you have anything to share then please let me know.

Atos Proposals Pensions update 8 - posted 9th May 2008 by Steve McCarthy

Note from Webmaster - posted 2nd April 2008

Election of Member Nominated Trustee Directors (1 Pensioner Vacancy)

Please be aware that the Voting Papers and Candidate's Election Statements are now out.

The candidates are:-

Frank Arnold
Frank Jones
Steve McCarthy
Bernard Owen
Roger Southgate

The deadline for the return of voting papers is Monday 21st April 2008.

GET VOTING!

Note from Roger Southgate - posted 31st March 2008

I have been meaning to contact CAPnews for some time to let people know about the existence of the “Last Friday Club” here in the North West. This is a lively group who meet up for a drink every month, to discuss (usually) technology, pensions and ailments. The group of 14 chaps in addition to myself who had served with CAP comprises Peter Russell, Brian Mosley, Michael (Mick) Lacey, Les Watt, Wojtek Kwiatkowski, Paul Matthews, Neil Johnson, Mel Earp, Paul Keenan, Richard Lever, John McAnally, John McGrother, Roger Clark and John Hunter – the last two still employed by Atos Origin. Roger now has the lowest CAP staff number in the company. However, I am contacting you now because of the upcoming pensioner trustee election, and to explain my reasons for standing as a candidate. Hence to get the correct readership this communication should be targeted at your Pensions section.

The reason for my candidacy is because the august group mentioned above unanimously proposed that I stood. These are challenging times for private sector pension schemes and I was sufficiently interested not to take much persuasion to accept this challenge. The triple whammy of reduced investment income, upgraded life expectancy and (grotesquely) Gordon Brown’s removal of taxation perks has caused the current crisis for such schemes, while the public sector arrangements remain feather-bedded. It would indeed be difficult to see the safety net of the protection schemes holding firm for long if the liquidity crisis led to serious recession and significant numbers of company failures. It has been my concern for some time that if we see an economic downturn that is off the usual scale of any that we have seen in the last half century, then there could be serious implications for all of us who rely upon our company pension. Therefore the number one issue for me is that our pensions are owned by a successful organisation who has made proper provision for keeping the scheme properly funded, with, as far as possible, resilient investments.

In this regard, although they really have no choice, Atos Origin are making all the right moves in setting out an program to meet the funding needs of the scheme. This is not altruistic – the company would probably wish to off-load the risk of running the scheme, but they could not rid themselves of this without finding more cash for the scheme up front to make such a “sale” possible. As time moves on we pensioners will inevitably get further and further away from the people taking decisions regarding our pensions. This is worrying, and will result in more decisions being taken based on the effect on the company profit rather than the needs of pensioners. The current example is the removal by practice, followed by the removal by right, of discretionary increases. This is morally wrong given individuals reasonable expectation that the value of their pensions, if not inflation-proofed, should at least be broadly preserved over their retirement. I can understand, however, that with an under-funded scheme the decision not to award discretionary increases appeared the prudent one. However, my reading of the rules of the scheme is that trustees could not award discretionary rises without the approval of he company (the “Principal Employer”). I suspect the decisions over the last few years not to implement discretionary rises were therefore due to bottom line management by the company rather than the wishes of the trustees.

What I do know is that the elected pensioner trustee cannot be purely a lobbyist for the existing pensioners. He will join a group of trustees who are charged with “ensuring that the scheme is well run and the benefits are secure for all scheme members”. The work done to make the pensioners a more effective lobby group is excellent, and in my opinion necessary, but it needs to be run from outside the group of trustees who must concentrate on their brief to guard the assets so that the reasonable demands of the pensioners, current and future, can be met.

Note from Graham Elliott - posted 17th March 2008

Thought you'd like to see this. I called Susan today and she confirms that the reason Atos Origin want to remove the right for the trustees to recommend an increase is that while that right exists, they have to hold a reserve amount on their balance sheet to cover that possibility. Once the right to recommend is removed, they can release their balance sheet requirement.

So there is no choice. From one point of view we are doing well to get the 5% increase and the £35m. addition to the scheme funds in one go. And although any increase in the next few years is unlikely, they have to bring the fund up to full funding and after that it might be possible for the trustees to persuade them to offer something modest each year.

The trustee ballot goes out at the end of the month. We will all vote for you, Steve!

Graham had the following reply to a number of queries from

"Barber, Susan" [Susan.Barber@atosorigin.com]
copied to "Vincent, Leni" [leni.vincent@atosorigin.com]

which might be of interest

Following the communication issued in February, we are now reviewing all correspondence received over the last few months to ensure that all queries / comments have been responded to. Whilst we believe that the February letter addressed the main issues (i.e. closure of the Scheme to future accrual, enhanced funding to recover the deficit position in 5 years and the removal of the discretionary increase clause), we did not comment on why the pensioner and deferred pensioner categories were not invited to participate in the consultation process, or invited to attend communication meetings.

The Trustee was aware that it could undertake its own consultation with deferred members and pensioners. However, in the late summer/early autumn the Trustee was resisting any change at all to the discretionary increase rule. There was therefore, at that stage nothing to consult about. Then, in November 2007 the Company gave the Trustee an ultimatum that if it did not accept the Company's offer, including removal of the pension increase "discretion" within a short timescale, the Company would immediately initiate an alternative strategy to implement closure of the Sema Scheme without Trustee involvement. If the Company had acted on this threat, the Trustee would have lost the opportunity to secure additional funding for the Sema Scheme (immediate £36.4 million cash injection) and the additional pension increases.

With the above in mind, it was decided that it was not appropriate to consult with the pensioners and deferred pensioners as the best deal had been secured. A communication was issued as soon as was practicable and indeed this was two months before the changes were due to come into effect.

You may be aware that the Company held communication meetings for the active members of the Scheme during February. This was because these employees need to make choices about their future pension provisions and the road shows were designed to address any queries regarding the future. Therefore, it would not have been appropriate for pensioner or deferred members to attend.

I trust you find the above in order.

Pensions update 6 - posted 4th March 2008 by Steve McCarthy

Recent Company Communication

Everyone should have received a letter (undated) from Atos Origin in the last two weeks about the scheme changes. I understand that pensioners and deferred members received different letters. This was probably because pensioners will benefit from the one-off 5% increase on their pre-1997 pension element whilst deferred members will not. The argument on this subject appears to be that since deferred members get inflationary increases added to their deferred pension amounts every year for all their service then it was not necessary to include them. On the other hand the current staff are getting the 5% when they all become deferred members on 1st April. This appears to be part of the incentive to get them to accept the "New Deal" on pensions.

Scheme Trustees

It seems that there are 5 candidates for the one position of pensioner trustee. The candidates have all had individual meetings with the UK Pensions Manager and the Chairman of the trustees. As one of the candidates I found the meeting informative with an open discussion on both sides. It was interesting to hear that this website (http://www.capnews.org) is well known to the company, they regularly look at it and therefore also see these emails since they are published on it.

Candidates were given Pensions Regulator information about being a trustee. One was a new document about Conflicts of Interest and how the trustees should handle them. What struck me as significant is that company appointed trustees almost by definition have a conflict of interest when the company wishes to force unpopular changes on a scheme. This is nothing specific to Atos Origin but is the way pension schemes are run under UK legislation. Interestingly the Regulator suggests that ideally the chairperson of the trustees should be independent from the company.

Scheme Changes

Returning to the scheme change to delete the clause about discretionary increases; it appears that the £45m held as provisions in the company accounts are not to do with the management of the scheme and any money that the company had actually earmarked to go into the scheme. Rather it is to do with UK company accounting rules for pensions whereby companies must put provisions on their balance sheets for any possible eventualities. This money when released will become profit but is not actual cash, therefore it is separate from the £36.4m that the company will be putting into the scheme.

Old scheme documents

A few people have been looking at old documents they received when employed by the company. In particular there was a scheme booklet published in September 1988 that clearly says pensions will be increased in-line with inflation up to 5% (with no caveats). Therefore there still is a feeling that maybe the scheme rules were changed sometime after that to make pre-1997 increases discretionary. Hopefully the company will be able to clarify the situation. I would encourage again everyone to look at old documents and let me know if they discover anything significant.

Scheme website

I understand that deferred members have access to a website where they can log on and have access to specific information about their own pension 'account' and maybe more general information about the scheme. At present pensioners have access to no on-line information. I would be grateful if any of the deferred members who receive this email could let me know in detail exactly what information is provided on the website.

Please remember if you want to share anything with others just let me know.

Pensions update 5 - posted 12th Febuary 2008 by Steve McCarthy

Over the last few weeks a good number of you followed up Peter Weston's request (update 3) and sent letters and emails to the Trustees asking for a meeting to understand the changes being made to the scheme. I also know it prompted people to ask various other questions particularly around pre-1997 discretionary increases.

The volume of requests was large enough that after a short time a relatively standard answer was sent out by the Company's pension department. The text is as follows:

On behalf of Leni Vincent and the rest of the Trustee Board, I'd like to thank you for your recent email. The Company has been in formal consultation with active members about far reaching changes to our Final Salary Pension Schemes. Negotiations also took place with the relevant Trustee bodies with the result that an improved set of proposals has been announced to active members and they will be implemented as at 1 April 2008. The impact for active members is the closure of Final Salary accrual and replacement with a Stakeholder pension. These changes do not affect pensioners or deferred members so these two groups were not included in the consultation process. It is the Trustees intention to write to both of these groups to inform them of the changes and to give reassurances about how the closed pension schemes will be operated and funded going forward. This communication will be with you by the end of February.

It is interesting to speculate as to whether the promised communication at the end of the month is a direct result of the number of letters/emails received. The impression gained is that the company and trustees were quite unprepared for the reaction from existing pensioners which is maybe reflected in the statement (bolded by them) that existing pensioners are not affected. Also they seem to have had no plan in place as to how they would communicate the changes to pensioners. Each of us will have our own view about the stopping of discretionary increases by the deletion of the clause in the scheme's deed which enables it. A number of people who have been drawing their pensions for a long time have taken it very badly particularly those whole service was all pre-1997 and had grown used to annual rises. They perhaps understood the claim that the company could not afford it for the past 3 years, however to now find out that the company is saying there will never be any increases in future is profoundly disturbing. Also remember that there has been no official communication about it yet, even though this was effectively decided by the company way back in 2007. The issue about pensioners and deferred members not being affected (and therefore not being consulted) hangs on the concept of whether the discretionary increases could legally be regarded as a benefit because they had been given over many years prior to 2004/5. Some people are looking into this issue and any views you have would be welcomed.

Trustee elections

Applications have now closed for the trustee positions. Following numerous offers of support I have put in an application on the basis that it is healthy for members to have a choice. I suspect that the outcome is likely to be decided by whom the existing staff recognise best since they are the majority of voters. Whatever the outcome I am sure we will all support the successful pensioner candidate.

If you have any information you would like to share please send it in.

Best regards

Steve

Pensions update 4 - posted 25th January 2008 by Steve McCarthy

Further to Update 3 sent out earlier today, Peter Weston's message reflects the views I have received from numerous pensioner and deferred members about the current situation.

Firstly, we have not been consulted about the changes to the scheme Secondly, so far we have not had any communication about the changes.

The main change that affects us is the removal of the clause in the pension trust deed that gives the right for the trustees to ask the company to agree to annual pension increases for pre-April 1997 service.

So far no-one seems to understand the whole situation surrounding this since it is bound up with the accounting provisions made by the company and with the extra money the company is putting into the scheme.

If you have contacts still in the company why not see if they know anything more about it which we can then share.

One can be under no doubt that the pension scheme changes are significant for the company because after the agreement with the trustees the company issued a press release for its investor community. I have copied it below and you can see it at Atos Press Release.

Scheme Documents Thank you to those of you who have been in contact after the request to look for old copies of pension scheme documents. Unfortunately so far the results only show that pension increases were discretionary. However please keep on looking.

Email register

Please keep on passing the message on to other ex-work colleagues who are likely to be scheme members and may want to be kept up to date. We now have about 70 people on the list. Perhaps you have recent email addresses for some of the people whose email addresses on Mike West's list no longer work - Andy Buchan, Peter Bayer, Mark Remnant, Peter Brown, John French, Mark Tellyn, Mark Jackman, Ian Grimwade, Mike Parish, Maeve Power, George Brown, Ben McCafferty, Roger Teal, Tom Ormiston.

If you have any information or views you want to share with others please let me know.

Best regards
Steve McCarthy

Pensions update 3 - posted 25th January 2008 by Peter Weston

All of you know that the Trustees are in the process of agreeing changes to the pension scheme. Depending on your own personal position it may or may not have a significant impact on your income over a period of a number of years. As a pensioner member I believe that I should be treated on an equal basis as other members. The company is holding a series of meeting explaining the situation to the active members I believe that trustees should ensure that we are treated in a similar manner.

I have therefore written to the trustees requesting a meeting - see Letter to Trustees (.pdf document).

I think that it would help if others made a similar request so I am asking you to send the same sort of letter/email to each of the trustees requesting a meeting. If nothing else it will give both Trustees and pensioners to come to an understanding of the situation as seen by both sides.

If you agree with the request I would be grateful if you could send a letter/email to the trustees:

I understand that the email addresses of the trustees are as follows:

leni.vincent@atosorigin.com
james.loughrey@atosorigin.com
bernard.owen@atosorigin.com
bob.hutton@atosorigin.com

I have sent copies of my letter to Leni Vincent by post just as belt and braces approach. You may or may not wish to do the same.

Her address is

Leni Vincent
4 Triton Square
Regents Place
London NW1 3HG

Further pensions update - posted 11th January 2008 by Steve McCarthy

Pension Update 2 (.pdf document)

Pensions update - posted 8th January 2008 by Steve McCarthy

On 19th December 2007 Atos Origin gave existing staff a document with details of its final decisions on the future of the scheme which is now to be completely closed on 1st April 2008. This was after the consultation which took place with existing staff over the late summer period. (Details of the staff consultation response can be found on below )

The main statements of significance for pensioner and deferred members were as follows:

1. Funding the Scheme deficit - An initial lump sum payment of £36.4m from the Company followed by monthly payments to eliminate the remaining shortfall over a maximum of 5 years. (This is improved from the original intent of £30.4m and 8 years)

Note: the last published scheme valuation from March 2005 had a shortfall of £51.5m. A new valuation at December 2006 is due to be published shortly. Can we assume the company has the new valuation and that the shortfall position has improved which is why the company has increased its 'offer'?

2. Discretionary increases for pre- April 1997 service - Removal of the discretion but with a one-off 5% increase to all pension earned in respect of service prior to 5 April 1997 for not only pensioners but also all members who are still in employment on 1 April 2008. The Trustee retains the ability to ask the Company to make improvements to benefits in the future under other provisions of the Scheme’s governing documentation.

Note (particularly for deferred pensioners): when you draw the pension your post-April 1997 service is increased every year by RPI because this is a statutory provision, however your earlier service is not. This means your pension is in two parts, one part index-linked, the other part not. Up until 2004 the company had applied index linking to the whole of the pension.

The company made the following statement on this subject; "This remains an important part of the proposal for the Company because the removal of the right for the Trustee to ask the Company for this increase under this specific rule means that we can release a provision we have made for this in the Company accounts of around £45m."

Does anyone understand what this really means ? It sounds like the company will suddenly be releasing £45m into the accounts which will just increase its profits by this amount. But why did they make this provision in the first place since they had no obligation to make pre-1997 increases. Maybe this is how they can fund the £36.4m they intend to put into the scheme as a one-off payment plus fund the 5% increase.

Other points

The Consultation process - it has been raised as to why the company did not consult with pensioner members. It seems that the new pension law introduced in 2006 only says that 'active members' should be consulted (i.e. current employees in the scheme).

Feedback - if you have comments on any of the above which you would like to share with others, please send them to me and I will send out further emails on the subject.

The email register - the number of pensioner and deferred members is gradually increasing, now at about 50 in total - however there is a long way to go. It has been very much helped by using the email lists kept by Mike West and Bob Brock. Please think again about other ex-colleagues you know who might be interested. You can easily email them suggesting they look at http://www.capnews.org/pensions.html where they will find details about joining the list.

Steve McCarthy

Pensioner Members Get Organised - posted 10th December 2007

All members (active, deferred and pensioner) of the Atos Origin (Sema) Pension Scheme should have received the latest Autumn 2007 Newsletter from the pension Trustees. In the document it makes clear that at last the Company/Trustees are having to recognise the input of existing pensioners to the management of the scheme. Like all the recent communications and initiatives in the past few years this has only happened because of new government legislation.

Shortly all members will be receiving details for the nomination and election of new Trustees, one of whom will have to be an existing pensioner, with the other two being active members.

In order to share information, particularly for pensioner members and deferred members, it seems like a good idea to pull together a register of members. This may enable cooperation between members which may be beneficial both in terms of electing a pensioner trustee and in terms of future input to the Trustees by potentially having a common voice.

What's the Idea ?

Initially to build up a register of pensioner members and deferred members just based on email addresses.

What can it be used for ?

To circulate information about the scheme, in the first instance relating to the election of a pensioner trustee. Without any sharing of information there could be quite a large number of candidates putting themselves forward. There is no intention to stifle anybody's democratic rights but it may be better if just a small number of candidates put themselves forward with members being reassured before the election that good quality candidates are standing.

In the future representation may be useful regarding issues like; the stopping of discretionary pre-1997 pension increases, and how the scheme may be managed if the company decides to offload it to a third party.

Who will do it?

The idea for the register came from Steve McCarthy (1980 to 2003 - CAP, Sema, Schlumberger Sema) and he has offered to set it up initially.

Will it work ?

To be effective the register it needs to be as large as possible. There are nearly 700 pensioner members and about 3000 deferred members. The only way to do it is by 'viral marketing', i.e. everyone passes on the message to everyone else they know who is in the scheme.

What to do next

If you are interested in being on the register just send an email to steve.mccarthy@virgin.net

It would also be appreciated it if you could pass the message on to every other Atos Origin pensioner and deferred member that you know.

Pensions Consultation - Reports - posted 12th November 2007

CAPnews has obtained a copies of the reports following the consultation process with members (EXCLUDING THOSE IN PENSION PAYMENT!)

Pensions consultation Interim Report(.pdf file)

Pensions consultation final Report(.pdf file)

Independent Consultants Report(.pdf file)

Changes to the Pension Scheme - posted September 2007

CAPnews has learnt that Atos Origins are proposing changes to the Sema Pension Scheme.

The company is in the process of consultation with its members (apparently contributing members, not pensioners). The attached letter Atos Letter (.pdf file) and the proposals Atos Proposals (.pdf file) throw more light on the Pesions Debate.

You should all now have had the Atos Origin Summary Funding Statement (complete with typos and page numbering errors!!!). Presumably this has come about in part by our "campaign" - not that that gets us any pension increases.

Also as of end November 2006 you should also have received the Autumn 2006 Newsletter (at least we have had some effect in making Atos inform us if not giving us any rises).

Graham Elliot (see letters) wants to "shame" Atos. Read his letter and if you have any suggestions please e-mail him at gje@ntlworld.com.

Below is the original letter regarding the non pension increase for two years, the initial acknowledgement and Entegria's informative reply in full. Note the penultimate paragraph.

Also below you will find further information and other correspondence

Original A R Trice Letter

Sema Pension Scheme Administration
42 - 62 Greyfriars Road
Reading
Berks
RG1 1NN
13 May 2006

Dear Ms Kemp

I am in receipt of your letter dated April 2006 informing me of the second year running (coincident with the scheme coming under Atos Origin) in which no discretionary increase is to be applied to my pension.

Naturally I am disappointed and the fact that the UK stock market (Footsie 100) has risen by around 25% in the last year seems to be in conflict with the phrase used in the letter "continuing difficult market conditions" given as the reason.

However on a more serious note I would like an explanation of why "the Company" (see paragraph 2 of the letter) has made this decision and not the Pension Fund Trustees. I enquired by phone many months ago of your office for a list of the current Trustees of the Scheme, but I was not given the courtesy of a reply.

I am now formally asking you to write to me with the current names and positions of the current Trustees of the Sema Pension Fund and their contact address.

If there have been any organisational or legal changes implemented in respect of the Pension Scheme since Atos Origin acquired part of Schlumberger and hence the remnants of Sema, I would like details of such changes.

This letter is written on behalf of a number of colleagues similarly concerned with these matters, who along with myself, look forward to receiving your reply.

Yours sincerely

Arthur R Trice

Letter with Atos Origin logo out of Pensions Admin, Reading dated 30th May 2006.

Dear Mr Trice

Atos Origin (Sema) Pension Scheme - 2006 Pension Increase.

I refer to your recent letter regarding your benefits in the above Plan.

I can confirm that your enquiry has been forwarded to representatives of Atos and the Trustees.

If I can be of any further assistance please do not hesitate to contact me.

Yours sincerely

Jenni Kemp

Pensions Administration

Reply to A R Trice Letter from Integria

26th July 2006

Dear Mr Trice

Atos origin (Sema) Pension Scheme - Pension Increase.

I refer to your letter dated 6 May and note your concerns regarding the lack of increase on the pension attributable to pre 6 April 1997 service.

Your letter was presented to a recent meeting of the trustees and I have been requested to respond to you in my capacity as secretary to the trustees of the scheme.

Atos Origin acquired Sena from Schlumberger in 2995 and renamed the Sema Pension Scheme the Atos Origin (Sema) Pension Scheme.

The Rules of the Scheme do not provide for compulsory increases on pensions accrued for service before 6 April 1997 other than to meet any statutory increases required. Discretionary increases may be awarded by the trustees, on the advice of the Scheme Actuary and with the consent of the Principal Employer (now Atos Origin).

Awarding discretionary increases, which increase the Scheme's liabilities, cannot be done without compensating finance from Atos Origin. For the Trustees to do so, without additional funding, would breach the rules laid down by the Pensions Regulator that could lead to the trustee's being heavily punished.

I am taking the opportunity to enclose the latest Actuarial Valuation based on the scheme's funding position at 1 April 2005. This sets out in detail the current deficit situation that the trustees and Atos Origin are attempting to resolve.

It should be noted that there are a number of contributory factors that are linked to the way in which the pension scheme funding position is assessed. This includes not only the investment return, assumed and achieved, but also the effects of members living longer.

You will note from report (page 27) that the scheme deficit has been substantially reduced due to the improved investment performance and extra funding from Atos Origin.

Atos Origin is providing substantial funding to the Scheme to provide support to all benefits being paid. Regrettably the company has not been able to provide the additional funding required to provide the discretionary benefit which relates to the pension increase for pre April 1997 service.

The trustees discuss this matter with Atos Origin on an annual basis but have to bear in mind the company's ability to sustain its contribution for the good of all members and their beneficiaries.

I trust you will understand the position the trustees are faced with and be assured that the decision not to award discretionary increases is not taken lightly.

Please note that the trustees will be issuing a Newsletter to all members of the scheme the first of which will be in the autumn. It is hoped that the newsletter will help keep members better informed on how the scheme is operated, changes and its financial status. In addition you will also be receiving a new annual statement called a Summary Funding Statement, the first of which will be issued before 22 September. Again, this statement is desighned to provide you with more information about the sceme finances.

If you wish to take this matter up with Atos Origin you should address your letter to: Pensions Manager, Atos Origin IT Services UK Limited, 4 Triton Square, Regents Place, London NW1 3HG

Yours sincerely

David Moretti
Secretary to the Trustees of the Atos Origin (Sema) Pension Scheme

Other Information

Graham Elliott has obtained a copy of the last Atos Origin (Sema) Pension Scheme Trustee Report and Financial Statements which he has kindly forwarded to CAPnews (Any pensioner may request a copy of the 37 page report dated 31st March 2005 by writing to Cherri Hedley, Pension Admin Services, Entegria Ltd, 42/62 Greyfriars Road, Reading, RG1 1N.).

It is not possible to reproduce the report on this web site, however here are some interesting extracts

"The assets of the scheme were valued as at 1st April 2003 at £151.9M against potential liabilities of £260.6M"

"The last actuarial report as at 1 April 2003, in accordance with minimum funding regulations (MFR), identified that the Scheme's assets represent 86% of the Sceme's liabilities, hence there is a deficit to the scheme of £25.4M. In the light of the announcements that the MFR funding measure is to be abolished in 2005, The Trustee does not expect the minimum funding requirement to have a material impact on its strategy beyond the short term."

"After careful and considered deliberation the Principle Employer did not award any discretionary increase in the pre April 1977 pension, in excess of GMP, as at 1 May 2005. The post April 1997 element of pension was increased by 3.1%"

As at 31st March 2005 there were 1,474 current members, 2,792 deferred members and 548 pensioners.

Other Correspondence

The following e-mail was received from Grant Lyon.

Mike,

Two of the current employee nominated trustees are:

Paul Matthews & Bob Hutton.

Their e-mail addresses are:

paul.matthews@atosorigin.com

bob.hutton@atosorigin.com

The fund is being managed by a company called Entegria.

I have not yet retired but take a keen interest in this as my time is not far off.

Regards

Grant Lyon
Senior Project Manager
Atos Origin
Norcliffe House
Station Road
Wilmslow, UK

Thanks Grant

From: Fred Iles

Has anyone received their 2006 pension review?

Again, a pathetic and derisory increase by Atos Origin. Mine amounts to an increase of about 0.5% overall.

Churning out the usual cop out gibberish about "difficult market conditions". The stock market has made very substantial gains over the past year!!

Anything we can do about this? Perhaps, if we just sit back and take it, AO will simply make it the norm for future years. I know from a friend that BT has awarded increases in line with inflation, despite having a fund deficit of greater than £5bn.

Fred.

From: Fred Iles

I have also sent a letter to Atos. A copy is attached, although I have removed some info specific to my situation in LT and my address details.

I have received a response from Pension Admin which states that the letter has been forwarded to representatives of Atos and the Trustees.

I feel that if only a few of us make a fuss then it will probably not count for much. Maybe we each need to show our discontent with the treatment we have received.

Fred.

Fred's letter

Atos Origin Pension Admin Services
42/62 Greyfriars Road
Reading Berks.
RG1 1NN

15th May 2006

Your ref: SEMA\Ann.Inc06

Dear Jeni Kemp

Atos Origin (Sema) Pension Scheme - May 2006 Pension Increase

Further to your letter dated April 2006.

I was appalled once again to receive what appears to be the same lame excuse as last year -"due to continuing difficult market conditions, and following due consideration by the company…...no discretionary increase will be applied to your pension this year". The stock market, property and commodities have all made very substantial gains in the past year!! The fund should have benefited greatly from this!! Perhaps this decision is due to the attitude towards pensioners by the company or poor investment? I know from a friend that other pension providers have had the integrity to award increases in line with inflation despite major shortfalls in their pension funds, e.g. BT.

What part do the trustees have in deciding on discretionary increases? Are any of the trustees current pensioners? If not, then it appears that this group of people is not represented in any way and, arguably, neither the company nor existing employees have any vested interest in awarding pensioners any increases. Can you please provide me with names and contact details of current trustees? Could you also tell me where I can obtain a copy of the latest pension fund report?

Yours sincerely

F J Iles