Response from Hammonds 30th Aug 2011

Thank you for your further email. My comments are set out below:

1 The scheme (and hence, in effect, the members) have the benefit of a guarantee from a Tokyo listed company. I assume that you have passed this to the solicitor you have consulted. This means that members should suffer no financial loss. Does your solicitor disagree?

2 I note that you have also consulted a "pensions administrator" who has indicated that the members' inability to invest or add to funds is a potential loss. They are missing the point. The scheme is winding-up. It can accept no further contributions. In addition, the scheme has the benefit of a guarantee and members' benefits are being bought out in full. The only way members could invest or add to these funds would be to transfer them to some form of defined contribution pension contract and so expose the funds to (a) investment risk until they retire and (b) the risk that annuity rates harden (as they have consistently done over many years) so weakening the purchasing power of their fund. It would be a somewhat unusual action to take in the circumstances.

3 Assuming members suffer no loss, the members' complaint relates to the time it is taking to conclude the winding-up of the scheme and issue individual policies to them. As I have stated many times, we share this frustration. Whilst the delay is frustrating, I reiterate - there is no loss. Do members understand this?

4 Members are, of course, free to initiate whatever action they consider appropriate. However, as the concern is about timing, member action will simply add to the time it takes to conclude the winding-up of the scheme. You are already familiar with how long a Pension Ombudsman investigation can take. Multiple actions would probably further increase timescales , as in all likelihood the buyout could not complete whilst investigations by regulatory authorities are ongoing. In short, member action is likely to further lengthen the process rather than speed it up and as such would seem to be self defeating. Do members really want to spend money on this?

I am awaiting confirmation on the status of the data and will update you when I know more.