Newsbrief No 52

Contents. 15th September 2003.

1. Subscriptions 2003-2004.

2. Priorities in the Event of Scheme Termination.

3. AGM Reminder.

Subscriptions 2003-2004.

The subscription level for this year was thoroughly debated at the AGM in October 2002. It was overwhelmingly voted to return to the original higher level of subscription. The reason for this is solely the increase in the rate for legal costs incurred.

Regrettably in the ensuing interval between October 2002 and May 2003 it was entirely overlooked that no reminder of this return to the higher rate of subscription was mentioned in any Newsbrief. The Committee, especially those responsible for communications, sincerely apologise to Members for this omission. They realise that it has caused some outrage, and resignations from the Association.

All members who have written in, or resigned, over this inexcusable mistake will be contacted by the Association.

Priorities in the Event of Scheme Termination.

Under current Pensions Law, where a Scheme terminates because the Employer has become insolvent the assets are distributed in accordance with a Statutory Order. Pensions in payment take top priority, and the fund is used to buy annuities from an insurer to secure these payments.

Those Members who are not yet drawing their pension share the remaining assets and where these are insufficient they face a reduction in their benefit. This can mean that Members with many years of Membership receive very little, whilst every pensioner regardless of length of service receives a full share.

The Government has been lobbied by those who have suffered in this way, and has recently announced proposals to change this situation.

The first proposal is that Employers who run final salary schemes should pay an annual levy into a Pension Protection Fund. This fund would be available to top up a scheme because the Employer became insolvent, so that Members could be sure of getting at least 90% of their benefit.

As this may take some time to set up, an interim measure is proposed that where a scheme terminates the fund should be distributed in a different order. This affects Pensioners as the suggestion is that pensions in payment would continue to be top priority, but not the annual increases that would be due.

Clearly, this proposed change reduces Pensioners rights in order that more monies are left in the scheme to be shared out for the Members who are not yet drawing their Pension. Furthermore, pensions earned in respect of salary in excess of £60k pa would drop to a lower priority below the pensions due to those not drawing them. Members may wish to lobby MPs to ensure any changes in the law give more Security rather than less.

AGM 2003 Reminder.

The AGM 2003 will take place at the Concorde Centre Heston on Thursday16th October at 2pm. The Committee of ABAP 15th September 2003

Any Member receiving on e mail only who has not had a 2003/04 Membership card please notify ABAP Committee contact as shown on ABAP website.