The Halcrow Pensioners’ Association is to launch a legal challenge against the deal between The Pensions Regulator and Halcrow.

Represented by Irwin Mitchell, the lawyers will be aiding the association to challenge the regulator’s agreement at the Upper Tribunal in London.

The Halcrow pension scheme is reported to have £758m liabilities at the end of 2014 and only £500m of assets leaving a deficit of £258m. In a deal with The Pensions Regulator, the Halcrow pension scheme is to be restructured.

The scheme’s 3,300 members have been contacted by the trustees and given the choice of transferring to a new company scheme that will put them on essentially fixed incomes for the rest of their lives, or being transferred into the Pension Protection Fund, explained Irwin Mitchell.

The law firm said the proposed deal, which invokes Regulated Apportionment Arrangements (RAAs), would set a precedent for millions of other pensioners in the 80 per cent of DB schemes that are underfunded.

Halcrow is an engineering consultancy and has worked on high-profile infrastructure projects including the Channel Tunnel, HS1 and second Severn Bridge. It was acquired in 2011 by CH2M Hill, a large American infrastructure company, for £124m.

Irwin Mitchell pensions partner Martin Jenkins said the agreement is bad news for the 3,300 members of the Halcrow pension scheme, who have been given a “stark ultimatum”.

“Either transfer to a new company scheme by 5 August this year, or be transferred in the Pension Protection Fund. The Pensions Regulator’s decision forces this on pension members even though they were not consulted about it or even told it was happening,” he said.

“The key point about this is that scheme members have been provided with very little of the information about the scheme finances to which they are entitled, and no opportunity for consultation. What is needed is sufficient time and resources to make a thorough and independent review that takes into account the degree of integration between Halcrow and its American parent.

“The Halcrow Pensioners’ Association also believes that The Pensions Regulator has not been given full and accurate information and that the regulator issued the RAA because of the threat by CH2M to force Halcrow into immediate insolvency, with the loss of thousands of jobs. However, the association does not believe that this threat is credible.”

Share Story: