We use cookies to support features like login and allow trusted media partners to analyse aggregated site usage.
To dismiss this message and allow cookies to be used, please click "Continue".


Twitter board

Follow us
  • My week on Twitter 🎉: 4 New Followers. See yours with https://t.co/mCw3VcMQGw https://t.co/odYllgQghg2 days ago
  • Friday View: Border to Coast launches UK equity tender - Rentokil Trustee faces fine - Gleeson directors banned - P… https://t.co/wx2SJ0bGfG4 days ago
  • Shareholder engagement: It’s good to talk For responsible investors talk isn’t cheap. Not only does research sugges… https://t.co/imwrezJuKJ4 days ago
  • Friday View: PA's DB scheme signs buy-out deal - PIC invests in Midlands housing association - Newton Video on Emer… https://t.co/GbWDdyENlN11 days ago
  • RT @minerva_ESG: Hey, all #ESG and#corpgov tweeps, lend a hand to @portfolio_inst important opportunity to support investors' understanding…12 days ago
  • We want to know your appetite and understanding for ESG! Please click the link to take our 5 minute survey to tell… https://t.co/SsVgQzEKIc12 days ago
  • RT @AonRetirementUK: Great event, thanks for hosting @portfolio_inst. Inspired location too! https://t.co/we7Ou46ns312 days ago
  • Full house at our Portfolio Prepared event, Oliver Hamilton Illiquids specialist @AonRetirementUK discusses conside… https://t.co/F0qPFPjUSP13 days ago
  • West Midlland Pension Fund’s Jill Davys: “I am reluctant to overpay for assets” Assistant director of investments a… https://t.co/YHtEIU5BSN15 days ago
  • Friday View: DWP plans £1m fine for "reckless" sponsors - Veolia appoints actuary - TPR fines Smart Pensions - UK s… https://t.co/9kUsw6mric18 days ago
  • RT @NewtonIM: Take 5 minutes to complete the @portfolio_inst ESG survey, which is part of its 'Raising Standards in ESG' initiative, and sh…18 days ago
  • This months cover story: Carillion: Lessons for trustees ''The collapse of the construction giant raises questions… https://t.co/L48HDqT0lB19 days ago
  • RT @PensionsSion: Portfolio Prepared? Join us and @portfolio_inst on 4th July 2018 to hear presentations from leading professional #trustee…19 days ago
  • Breaking: DWP proposes £1m fine for "reckless" DB sponsors https://t.co/7rsDaGgS5v #DWP #DBWhitepaper #TPR https://t.co/YQqy9Qr7tN21 days ago
  • Our latest Roundtable: Factor Investing ''Pursuing value, momentum, quality or low volatility strategies in bond an… https://t.co/qugefevAN421 days ago
  • My week on Twitter 🎉: 2 Mentions, 3.3K Mention Reach, 5 Likes, 6 Retweets, 7.76K Retweet Reach. See yours with… https://t.co/IZfviidt4H23 days ago
  • Friday View: Trustees feel the heat over climate change - bankers' pensions back in black - TPR suspends trustee -… https://t.co/kUKa8QUF9w25 days ago
  • Increased regulatory oversight will be risk-based, TPR keyperson will meet schemes deemed riskier several times a y… https://t.co/wUiKPGESaU27 days ago
  • Lesley Titcomb, TPR chief executive says change is on its way, the regulator will increase oversight between valuat… https://t.co/Wu8Pv6TfqS27 days ago
  • Join us and @AonRetirementUK on the 4th of July at the luxurious Victorian Bath House featuring educational presen… https://t.co/r1abr8Qls028 days ago


Plain sailing in choppy waters: Bob Holmes

Plain sailing in choppy waters: Bob Holmes

Interview by Sebastian Cheek
Tuesday 21st February 2017

The £200m Dover Harbour Board Pension and Life Assurance Scheme closed its DB plan to future accrual in May last year. Trustee chairman Bob Holmes tells Sebastian Cheek how having strong employer-backing has helped the scheme deal with this closure.

Plain sailing in choppy waters: Bob Holmes

"All the employer's available cashflow over the next 10 to 15 years needs to be directed towards servicing [the harbour regeneration] which means it won't have much, if any, spare cash to bail out the pension scheme."

Bob Holmes

Why was it necessary to close the defined benefit scheme to future accrual last year?

The Dover Harbour board (the board) has had a defined benefit (DB) pension scheme for several years, but, like most other employers who have set up such schemes, it reached the stage when it became unaffordable. With interest rates being as low as they are, the ongoing funding rate became too high.

It first closed two new entrants on 1 January 2014 and, as pension trustees, we said, “Okay, well that had to happen” and  conceded it would probably only be a  matter of time before the board closed the scheme to future accrual as well. That happened on 31 May 2016.

What has replaced the DB scheme?

After the DB scheme first closed to new  members, the company put in place a good contract [DC] arrangement for new  employees, but that scheme was enhanced when the DB scheme was closed to existing employees last year. The replacement scheme is very generous. There are four levels of contribution that new members can put in, varying between 4% and 10% of their salary.

The company will not only match that, but will also put in 1.5 times whatever they put in up to that limit. So if somebody puts in 10% of their salary, the board will put 15% in for them, which, as an employer’s contribution, I think is probably one of the most generous DC arrangements around. Now, the minimum total contribution of 10% won’t buy the sort of benefits that were available under the old scheme, but if people are prepared to make a bit of a sacrifice by contributing more then they’re getting closer.

So the employer covenant remains strong, despite competition from the likes of Eurotunnel?

Even with Brexit, the ferry market is still going to be there and will continue to grow. People are still going to be travelling to the continent, freight and trade is still going to be coming in and out of the country.  Dover’s main competition is Eurotunnel, but the capacity of the tunnel is rather more finite than the capacity of the port.

Slightly more passengers use Eurotunnel than use the ferries, but slightly more freight uses the ferries than uses the tunnel. From our perspective as trustees, we’re in the good position of having a very solid sponsoring employer and therefore, the strength of the employer covenant should not be an issue. Nonetheless, we need to be prudent and we always have been prudent as trustees.

How has the DB closure affected the role of the trustees?

Over the course of the last three years or so, our focus has gone from being trustees of a scheme which is fully open, to one which is now fully closed. That’s certainly had a bit of an impact. But probably the bigger  impact, rather than the closure of the scheme, has been the fact that the board is about to engage in a significant capital  expenditure programme, called the Dover Western Docks Revival (DWDR).

What does the DWDR entail?

The board is inherently profitable and generates cash in a normal year which is good news from our perspective. The board is a trust port which means it does not have shareholders, which from a trustee perspective is also good news because it means there aren’t any dividends that have to be  paid out of cashflows. However, the profits do have to be reinvested in the port and  every so often you have some very significant capital expenditure that comes along; you need to build a new quay or do a lot of work on link-spans or things like that. The DWDR plan is to redevelop and regenerate the western side of the port to provide  additional capacity that will allow the port to handle the growth in traffic expected over the coming years. The scale of the project is five times its annual turnover which is about £60m and this is a £300m capital investment. That has to be funded.

Page: 1 2 3

Leave your comment

View our comments policy

Please login or register with us to leave a comment. It's completely free!

Friday View

Friday View

Shareholder engagement: