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The KPFA Newsletter

Dear Member

1. The KPFA Forum Board

It is some months ago since we issued our last KPFA Newsletter. It was hoped that our Forum Board would start to replace the Newsletter by providing a facility for members to "talk" to each other. Regrettably this has not occurred and although our Forum Board is "viewed" by many, there seems to be a marked reluctance for members to either raise "topics" or to comment on "topics" raised by others.

Perhaps the "index of topics" is too limited and/or you would prefer the Forum Board to be extended or modified in other ways - maybe you think that the Forum Board is of little real value and should be removed.

Please give us your views on this matter by using the email contact facility on our website.

We have nearly 2500 members so that collectively we have an extensive wealth of knowledge and experience - it seems a pity that we cannot use this for the benefit of all.

2. KPFA Working Group Meeting

We held our last KPFA Working Group Meeting on the 23rd April and were delighted that MNTD John Sampson was able to join us.

Our discussion centred on the Trustee's Newsletter dated February 2010 and the March 2009 Actuarial Report published on the Trustee's website.

We thought that both the Newsletter and Actuarial Report presented a reasonably encouraging picture. The Recovery Plan seems fairly robust, as it has been able to withstand an unprecedented level of market turmoil over the past 2-3 years.

Over this period the "deficit" has been slightly reduced although the recovery period has now been extended to 2024. We think it is unlikely that this further extension will cause a major problem for the Pension Regulator, but we do need to recognise that since 2006 the recovery period has been extended by an additional 10 years.

The Actuarial Report is a key document, as this enables members to see how the Recovery Plan is working. The investment portfolio is currently split into two parts comprising "Liability Assets" (40%) and "Returns Assets" (60%). The "Liability Assets" are structured to meet ongoing pension payments. The "Returns Assets" are structured to give investment returns that will eliminate the "deficit" over a period of time.

The updated 2009 Recovery Plan is based on the Total Assets giving a return of 3.6% per annum above Gilts. This is clearly an ambitious target as I am sure we all know the problem of finding secure investments that currently give a return of more than 7% per annum.

We asked John Sampson if the Trustee could issue financial information to members at an earlier stage. We said that when it is received it tends to be 12 to 15 months out of date. John said he would raise this matter with the Board, but clarified that the Actuarial Report dated 31 March 2009, referred to the "cut off date" for information. The preparation of the Report is a very complex and detailed exercise, which only commences at the cut off date. The results, including a draft of the report are normally available in time for review by the Trustee at the final board meeting of the year, held in December. The contents of the report were summarised in the February 2010 Newsletter and the full report was published on the THPT website around the same time.

John said that the Trustee is still trying to contact some deferred pensioners, who perhaps left the company many years ago, but still have accrued pension rights. If any of your friends or ex-colleagues fall into this category please ask them to contact - Trafalgar House Pensions Administration Ltd, 30 Coleman Street, London EC2R 5AL, Tel: 020 7330 0770 or Email: enquiry@THPT.co.uk.

3. Possible Talk by Mr Garry Wake MD Trafalgar House Administration Ltd.

It has been suggested that we should invite Mr Garry Wake to address a local meeting of THPT Pensioners and Deferred Pensioners, to explain a little more about the Trafalgar House Pension Trust and to respond to questions.

Subject to the agreement of the Trustee and Davy Mckee Poole Retirement Association, it may be possible to arrange an initial meeting in Poole later in the year. If this proves to be successful further meetings could follow in other locations.

We would be pleased to hear from any of our members who would value the opportunity to attend such a meeting, together with suggestions on a suitable venue. Please email your views using the contact facility on our KPFA website.

Regards

Mike Street

Dear Member

1. Trafalgar House Pension Trust - Investment Report

The Investment Report dated January 2009 was very encouraging and the Board should be congratulated on achieving such a positive result against current market conditions.

The Report does however warn us that the Trust's investment returns "continue to lag behind the long term benchmark". This statement is somewhat vague and we are sure that our members would find it more reassuring if this information could be presented in graphical format, with the "deficit" (year by year) being plotted against the "projected target" line.

For members who have not read the above THPT Investment Report, MNTD John Sampson has kindly reproduced a copy of the document on our Forum Board, (to access please use the "tab" on our Home Page). Alternatively use the link http://www.thpt.org to gain direct access to the report on the THPT web site.

2. Election of Member Nominated Trustee Directors

We would like to congratulate Sir Eric Parker and Mr David Day on being returned unopposed as the Member Nominated Trustee Directors representing the Pensioner Constituency.

Mr David Moorhouse and Mr John Sampson are also to be congratulated on being elected as the Member Nominated Trustee Directors representing the Active and Deferred Constituency. Mr Roger Trett ended his term of office on the 31 December 2008 and I am sure we would all like to thank him for his contribution and commitment during his period in office.

We trust that all the MNTDs will continue to use our Forum Board to raise issues and / or to comment on topics raised by our members.

3. Deferred Pensioners

Over the past 3 years we have received a large number of enquiries via the "contact" facility on our web site. The majority of these messages enquire as to how ex-employees from many Kvaerner Companies can now contact the "party" responsible for their pensions that they accrued perhaps 20 or 30 years ago. In all cases we advise them to contact Trafalgar House Pensions Administration Ltd, 30 Coleman Street, London, EC2R 5AL. Tel 020 7330 0770.

It is understood that THPA Ltd are currently trying to update their records on Deferred Members. KPFA members are advised that if they have not received the THPT Newsletter by post over the last few days, their current address is not on the THPA Ltd database and they should contact THPA Ltd as a matter of urgency.

4. KPFA Forum Board

Most members use our Forum Board on a "read only" basis, but the real objective is to encourage members to be "interactive" and to "talk" to each other. It is particularly important that members use the Forum Board to "talk" to our MNTDs who I am sure would welcome the feedback.

On a similar basis we would like to hear your views on our Association, the Forum Board and any improvements that you think we can make.

To be "interactive", members need to "register" on the KPFA Forum Board. The registration process is very straightforward with a "step by step" guide being given in our September 2008 Newsletter. Once you have registered with a username and password you are able to post "topics" and / or "reply" to all existing topics.

5. Membership

Our membership is slowly increasing, but except for Poole and Sheffield, we have been unable to contact any other established Kvaerner Retirement Association, (i.e. Cunard, Cleveland Bridge, Monks, Cementation, John Browns, etc.). So, if you have any such links with a company based retirement association, please let us know through the "contact" facility on our web site. We can then try to persuade the association to encourage their members to register with kpfa.co.uk.

Regards

Mike Street

Dear Member

1. Members Forum Board

We have now extended our web site to include a "Forum Board" which will enable all of our members to exchange views on matters of mutual interest. This is becoming increasingly important as we now have a large membership with a wide geographic spread.

It should be stressed that the Forum Board must not be used to resolve personal issues relating to your pension or pension entitlement. All such matters must be referred to Trafalgar House Pensions Administration Ltd, 30 Coleman Street, London EC2R 5AL (Tel: 020 7330 0770). Alternatively, if legal advice is required, members should contact the Pensions Advisory Service Help Line on 0845 601 2923.

• Forum Board: Click the new tab on the KPFA Home Page to access the Forum Board.
• Read Only Access: Available to all members and non-members without registering.
• Registration: Members (already registered with kpfa.co.uk) who would like to raise a "topic" or respond to an existing "topic" must first register on the Forum Board.
• To Register on the Forum Board:
• Click "REGISTER" on the "Forum Index" page.
• Click "I agree to these terms".
• Decide on your "user name", (which cannot subsequently be changed).
• Give your "e-mail address", (this must be the same as your original KPFA registration - if not, see below *).
• Decide on a "Password".
• Click "Submit".
• After you have registered, your "user name" and "password" will be confirmed by e-mail.
• After registration
• Enter your "user name" and "password", (tick "auto logon" facility if required).
• Click "Login".
• Click the Heading (not the icon) on the Board Index to access the Sub Index of Topics.
• Click a "Topic" in the Sub Index to read and / or respond.
• Click "Post Reply" to respond.
• Write your reply, click "Preview" and, if satisfied, click "Submit". (You can delete your reply at any stage).
• Click "logout" to exit the Forum Board.

* Please note - Your Registration will be rejected if your current e-mail address does not correspond with the e-mail address you gave on your original KPFA Registration Form.

If in doubt, please check your original KPFA Registration Form. This is achieved by going back to the KPFA web site home page / registration / I am a pensioner / I want to change details / I want to change details on line now / add security information / then check and if necessary amend your original application form before registering on the Forum Board.

The above "security information" was sent to you by e-mail when you first registered on the kpfa.co.uk web site.

If after you have registered on the Forum Board you subsequently need to change your e-mail address, you must first change your e-mail address on the KPFA web site (as detailed above) before you change your e-mail address on the Forum Board.

2. Your Views are Important

We want to hear your views on the various topics, but please be objective, avoid personal criticism, defamatory comments or abusive language and treat the Forum Board with respect. It must be stressed that your messages express your views and the content is not checked, reviewed or monitored by KPFA.

If any infringement of the above is reported to KPFA, we reserve the right to delete any offensive or inappropriate message and to "bar" the member from posting any further messages.

3. Existing Topics on the Members Forum Board

To launch the Forum Board we have the following "topics" under each of the main headings - please read them and add your comments and / or add to the topics under debate.

• KPFA
• Your comments on the Forum Board
• TH Pension Trust
• A Personal View from Mr David Day Member Nominated Trustee Director.
• IPE Interview with Dr Ros Altmann on THPT Strategy.
• Local Associations
• Please use this "Heading" to post information or notices relating to any local group of ex-Kvaerner Pensioners, (including Trafalgar House, John Brown, Davy, Cementation, Cleveland Bridge and others).
• General and Social
• Please use this "Heading" for any subject that does not fall into any of the above.

4. Election of MNTDs on the Board of the Trafalgar House Pension Trust

The Trustee will shortly be inviting nominations for Member Nominated Trustee Directors (MNTDs) to serve on the Board of Trustee for a 4 year term from 1 January 2009.

Two of the MNTDs will be appointed from the "pensioner constituency" and two MNTDs will be appointed from the "deferred / actives constituency".

The voting procedure is detailed in the TH Pension Trust Newsletter issued in February 2008, (available on www.thpt.org).

This vote is important for all of us - so if you are a "deferred pensioner" and you did not receive a copy of the above TH Newsletter in the post, the chances are that you are not on the TH mailing list.

If in doubt, please check that the Trustee has your up to date address by writing to: Trafalgar House Pensions Administration Ltd, 30 Coleman Street, London, EC2R 5AL. It is understood that for security reasons any change of address has to be submitted in writing.

5. Recruitment

As an association we are of course open to all ex-Kvaerner employees. We have retained the "Kvaerner" name not through any sense of loyalty, but it does provide a name that embraces all of the individual companies that at one stage comprised both the Trafalgar House and Davy group of companies.

We now have a substantial membership including employees from well over a hundred separate (Kvaerner) companies. The broad membership "split" is approximately 55% from Trafalgar House companies and 45% from Davy companies.

Increasing our membership is important as we have the facility to communicate with 95% of our 2200 members via e-mail. The introduction of the Forum Board provides an additional facility giving our members the opportunity to share their knowledge and to express their views on a range of issues.

So please spread the word and encourage all other ex-Kvaerner employees to join our association. As you know, registration is "free of charge" and if they do not have an e-mail address, or they lack the necessary computer skills, please help them with the registration process.

Regards

Mike Street

Dear Member

1. Financial Situation

It was reassuring to read in the TH Pension Trust Newsletter that "the new investment strategy is already showing that it is robust and capable of delivering the targeted return in a variety of different market conditions".

We have now had the opportunity to review the detailed March 2007 Accounts for the TH Pension Trust and agree that at this early stage the results are encouraging. Unfortunately we still have to feel the full impact of the global "credit crunch", which only started to manifest itself in August / September 07.

We all hope that in the next TH Newsletter the Trustee will be able to reaffirm that the Pension Trust is continuing to deliver "targeted returns". Until then we need perhaps to treat this current very positive message with some caution.

2. Financial Reports from the Trafalgar House Pension Trust

After some delay the Pension Fund Reports for the financial year ending 31 March 2007 are now available from the Trustee on request including:

• Trafalgar House Pension Trust (Giving full details of the investment status of the Trust).
• Trafalgar House Pensions Administration Ltd (Administration costs including directors fees).
• Trafalgar House Trustees Ltd (A company acting as the "the immediate parent undertaking").

3. Election of MNTD's

KPFA understand that the Board of Trustee is currently discussing the processes to be adopted for the election of Member Nominated Trustee Directors in December 2008.

After seeking the views of our members and affiliated groups of Kvaerner Pensioners around the UK, the consensus view is that we would prefer to retain the existing arrangement of having separate "constituencies" for Pensioners and Deferred Pensioners.

All the above groups were unanimous in rejecting the concept of either "company" or "regional constituencies" as this would not provide a fair and balanced representation on the Board of Trustee and it would be difficult if not impossible to administer.

KPFA accept that the existing arrangement of having 4 MNTD's meets statuary requirements, but we contend that the TH Pension Trust is in a unique position as it controls a substantial pension fund but without an employer of substance to underwrite any deficit. Under these circumstances it would seem reasonable to us that MNTD's on the Board of Trustee are increased from 4 to 5 in number.

If this is acceptable to the Board, KPFA would suggest that the additional MNTD is a Pensioner Representative, as pensioners unlike deferred pensioners do not have the opportunity to transfer out of the TH Pension Trust.

We have made our views on the above known to members of the Board, as we were given to understand that these matters were to be discussed at the December Board Meeting.

If you agree or disagree with the above proposal please write to the Trustee with your views on this matter.

4. Member Nominated Trustee Directors (MNTD's)

It is a little disappointing that some of the MNTD's seem reluctant to meet with local organised groups of Kvaerner pensioners. In our opinion this would provide a useful platform for an exchange of views and for members to clearly recognise that they are represented on the Board of Trustee.

It is suggested that local pensioner groups should perhaps take the initiative, by arranging for an MNTD or a Board representative to address them on either a formal or informal basis. We would suggest that in the first instance any such request should be routed through TH Pensions Administration Ltd.

Any "feedback" on the above would be much appreciated.

5. TH Pensions Administration Ltd - Mission Statement

We were delighted to read that TH Pensions Administration Ltd have reproduced their Mission Statement in their Annual Report which states that:

Our Mission is to deliver a first class level of Service to our customers by:

• Providing the right benefits to the right members at the right time.
• Ensure communications with members are responsive, clear and timely.
• Promoting two way communications between members and their Trustees.
• Supervising portfolios in line with best practice at every level.

We thought the above should be drawn to your attention as perhaps only a few members will actually read the THPA Annual Report.

6. THPT Web Site

We would encourage our members to visit the THPT web site on a regular basis as it does provide us all with a useful source of information. We understand there is a view that due to limited usage the Trustee may consider that it does not provide value for money.

7. Recruitment

Please continue to spread the word about our Association www.kpfa.co.uk and encourage others to join. Through our Newsletter we do have the ability to communicate with a large number of Kvaerner pensioners and deferred pensioners, which in the future could prove to be an important asset.

On that note I would like to wish all our members a Prosperous Healthy and Happy New Year.

Yours sincerely

Mike Street

Dear Member

1. Meeting with MNTD John Sampson

Mr John Sampson, one of our Member Nominated Trustee Directors, kindly agreed to meet the "kpfa.co.uk" working group at a routine meeting on Friday 8 June 07.

At the meeting John outlined the main activities undertaken by the Board of Trustee and explained that although the Board adopted a committee structure, all Board Members were privy to the committee minutes and all significant matters were referred back to the Board for decision making.

John outlined the level of expertise brought to the Board by the five Independent Trustee Directors and stressed the importance of their technical input.

We expressed surprise that the MNTD's were not fully represented on each of the 4 committees.

John said that both the Independent and Member Nominated Trustee Directors have equal standing on the Board, but the committees were structured to use the skills of each board member to maximum advantage and he was satisfied with the above arrangement.

John said that after 12 months turmoil stability is important so that the Board can concentrate on implementing the recovery plan.

We were all reassured by John's comments, but said that in our opinion it is important for the Board to adopt a more transparent and open style of management, this being particularly important now that the TH Pension Trust is effectively operating on a "stand alone" basis.

We identified the following as some of our main areas of concern:

• In our opinion the Trustee's Annual Report should detail the level of remuneration paid to each of the Trustee Directors, adopting the same practice as required by UK public limited companies.
• We would suggest that it may be appropriate for the Trustee to publish the basic Terms of Reference for each of the Committees.
• We consider that it would be good governance for the Independent Trustee Directors to offer themselves for re-election (by the board) on a predetermined basis, again applying the practice adopted by most UK public limited companies.
• The re-election of both Independent and Member Nominated Directors should be staggered to avoid major and sudden changes in the composition of the Board, which could impact on the recovery plan.
• We are sure that our members would appreciate a simple presentation in the THPT Newsletter or in the Annual Report, to demonstrate how the actual funding level is proceeding against the recovery plan.

John said he recognised the above as being legitimate concerns and said that he would raise these matters with his fellow board members.

2. The 2006 Actuarial Valuation

We were advised by the Trustee (February 2007 Newsletter) that based on the Recovery Plan the THPT will have sufficient assets to meet all pension payments when they fall due and it is projected that the deficit will be eliminated on the current actuarial basis by June 2014.

Members must however recognise that the above recovery plan is based on reasonable assumptions and the time actually taken to eliminate the deficit may be shorter or longer than projected. The "sensitivity" of these assumptions is covered in more detail in the 2006 Actuarial Report, which is available from the Trustee on request.

In practice the position will of course be reviewed at the next Actuarial Valuation due in March 2009.

3. Membership of kpfa.co.uk

To date kpfa.co.uk has just under 2200 registered members from all parts of the UK (and abroad). These members were employed by over 80 plus ex-Kvaerner companies, so that we think we are a fairly representative organisation.

4. Recruitment

We all hope the above investment strategy will have a favourable outcome but, "just in case", we consider it essential that we increase our membership to at least the 3000 level.

In our opinion this is the minimum level at which we can be seen as a creditable organisation that can speak and act on behalf of Kvaerner Pensioners, Deferred Pensioners and Dependants.

This level of membership will only be achieved if all of our existing members actively seek out and recruit new members. All ex-Kvaerner employees who are or were members of the Pension Fund are welcome to join and can register with us (free of charge) on our web site.

We appreciate that not all new potential members will have web site access, so if necessary please help them to complete the registration process.

5. Future Newsletters

We hope that we are now entering a period of some stability that will allow the TH Pension Trust to implement the proposed recovery plan, so that we can all look forward to, or continue to enjoy our retirement.

On this basis we are planning to issue future Newsletters twice a year but we will of course adjust this as necessary to meet changing circumstances.

Yours sincerely

Mike Street

Dear Member

A very Happy New Year to all

1. Board of Trustee

We would like to congratulate Mr David Day as the pensioner's newly appointed MNTD on the Board of Trustee as the "runner up" in the earlier election.

We are however very disappointed that the 15,000 deferred pensioners will now have to wait a further 2 years before they can exercise their democratic right to vote for their own representatives on the Board of Trustee. This is in no way intended as a criticism of either Mr John Sampson or Mr Roger Trett who we are confident will be conscientious in undertaking their role as Trustee appointed MNTD's representing the deferred pensioners.

The appointment of Dr Ros Altmann to the Board of Trustee will I am sure be welcomed by members as this clearly demonstrates her level of commitment to the new investment strategy. As an acknowledged "champion of pensioners' rights" we also hope that she will start to press the Board into adopting a more transparent management style. We also hope that she will start to address the key issue of governance now that the THPT is effectively operating on a "stand alone" basis.

2. The 2006 Actuarial Valuation

We are still waiting for the March 2006 Actuarial Valuation that was promised by the Trustee in "early 2007". This report should provide us with factual information on the financial status of the fund including the current deficit as an "on-going" scheme.

It would be useful if on an annual basis the Trustee could give an estimated update of the deficit as the resultant "trend" would clearly indicate if the new investment strategy is proving to be successful.

3. Deferred Pensioners

From information supplied by the Trustee it would seem that a large number of deferred pensioners have failed to keep the Trafalgar House Pension Trust updated on their change of address. If you have not received any communication from the THPT over the last 2 months you should perhaps ask them to check/correct their records.

Please note their new address:

Trafalgar House Pensions Administration Ltd
30 Coleman Street
London
EC2R 5AL

Tel: 020 7330 0770

4. Recruitment

Recruitment is still important and although we now have over 2000 members this is still below the 3000 to 4000 members we require to provide us with an effective voice - so please continue to encourage others to join our Association.

5. THPT Web Site

We would suggest that our members register on the THPT web site - www.thpt.org - as this site will no doubt be used increasingly by the Trustee to communicate with all pensioners and deferred pensioners.

6. The Future

As an Association we will continue to monitor the on-going situation and will keep our members informed, although future Newsletters will tend to be issued on a less frequent basis unless there are any significant developments. Nevertheless if you have any comments and/or information that you feel may be of interest to our members, please forward these through the contact facility on our web site.

We have probably now reached a stage where the Board of Trustee needs to be allowed to consolidate and action their new strategy for the future well being of the THPT. In this respect we would like to take this opportunity to wish the Trustee a very successful and prosperous New Year.

Yours sincerely

Mike Street

Dear Member

1. The Agreement

We are delighted that the Agreement between the Trustee and TH Global plc has now been ratified as this should provide us all with some level of future security.

Let us hope that the Trustee's new investment strategy will be a success and will progressively reduce the £320m pension deficit as stated in the 2005 TH Global Accounts (based on FRS17 Accounting Standards).

The next important issue is to ensure that both Pensioners and Deferred Pensioners are properly represented on the Board of Trustee so that hopefully our representatives can start to introduce a more transparent style of management.

2. Election of Member Nominated Trustee Directors

We welcome the proposal that Pensioners and Deferred Pensions should each have two Member Nominated Trustee Directors on the Board of the TH Pension Trust, but we totally reject the suggestion that such an election should be delayed for a further two years.

Over the next two years decisions by the Trustee will be fundamental to both the success and possibly the very existence of the TH Pension Trust. For this reason it is essential that at an early date the Pensioners and particularly Deferred Pensioners be given the opportunity to vote for their own representatives on the Board of Trustee.

The TH Pension Trust no longer has a "sponsoring employer" of substance to underwrite the pension deficit, so that its only responsibility now is to look after the rights of members and their dependants.

In these circumstances it would seem appropriate for the composition of the Board to be equally divided between perhaps 4 Member Nominated Trustee Directors (MNTD's) and 4 Independent Trustee Directors. This would provide a Board with a membership that is "fair, transparent and proportional".

In our opinion the Trustee's proposal issued to members on 17 October 06 is unacceptable although we would accept that perhaps a 6 month period is required to enable the Board to consolidate its position. This should then be followed by the election of one additional MNTD representing the Pensioners and two new MNTD's representing the deferred pensioners. At the same time we would suggest that the number of Independent Trustee Directors should be reduced from 5 to 4.

We totally reject the proposal that the 2 MNTD's representing the 1100 ex-employees should now represent the deferred pensioners. The Trustee has always denied the 16,000 plus deferred pensioners proper representation on the Board and for this to continue for a further 2 years is clearly not "fair, transparent or proportional".

It should be noted that the two MNTD's that Mr Froeshaug proposes to represent the active/deferred members are now employed by another company and they may or may not continue to be members of the TH Pension Trust.

3. Voting

If you agree with our proposals we would suggest that you complete the "objection slip", add your comments and return it to Electoral Reform Services so that it arrives before the 20 November 2006.

The return address is not given on the "objection slip" but is:

Electoral Reform Services
PO Box 46556
London
N1 0WW

We have already lodged a formal complaint with the Chief Executive of the Electoral Reform Services and the Pension Regulator stating that the proposed voting procedure is patently unfair and is no more than a charade. It clearly does not meet the basic requirement of being "fair, transparent and proportional".

4. Recruitment

Recruitment of new members to kpfa.co.uk continues to be important and we would again urge existing members to encourage all ex-Kvaerner employees to register with our Association. It is particularly important that we all assist potential members without web site facilities to complete the registration process.

Yours sincerely

Mike Street

1. Delay in Ratifying the Agreement

There has been little development over the past 6 to 8 weeks and it seems likely that there will be a further delay before the Trustee and TH Global plc are in a position to ratify the Agreement.

The Trustee noted in his report issued last week that this period of uncertainty could extend through until 31 December 2006.

2. Bondholders

Members will appreciate that the Trustee of the TH Pension Trust is not involved in the dispute between TH Global plc and its Bondholders, but it is understood that this dispute must be resolved before TH Global plc can ratify the Agreement.

Since our last Newsletter TH Global plc have published their 2005 Accounts (unaudited) as requested by the Bondholders. This has been followed by TH Global's announcement on 22 September that they have made an increased offer to both the 2006 and 2014 Bondholders.

The above sounds an encouraging development and we all hope that this matter will soon be resolved so that TH Global can ratify the Agreement and secure the future of the TH Pension Trust.

Further details on the Bond Issue are available on the TH Global web site http://www.thglobal.com.

3. Trustee Report

All members will appreciate receiving a copy of the Trustee Report dated September 06 covering the period up to 31 March 2006.

It is disappointing that in the Report the Trustee did not give a more up to date figure for the "fund deficit" (on an ongoing basis), so that we could equate this against the agreed £101m settlement figure.

Unfortunately the Trustee's Report still quotes the 2003 Actuarial Valuation, which gave a deficit of £197m. This is despite the fact that the TH Global plc accounts (unaudited) for 2005 show an ongoing deficit of £320m. This figure being based on FRS17, which is the accounting standard required by the Pensions Regulator.

Presumably the Trustee supplied this figure to TH Global plc and we would question why members cannot be given this more up to date information, when it is already in the public domain.

With the above adverse trend we can only assume that the current deficit will show a further deterioration when the March 2006 Actuarial Valuation is published in early 2007. Let us all hope that the proposed new Investment Strategy will start to "kick in" at an early stage to reverse this trend.

4. Member Nominated Directors (MND)

When the Agreement comes into force, it had been assumed that the two Member Nominated Directors appointed by the employees would resign. (As we understand that they will both be transferred from TH Global plc to be employed by Aker Kvaerner).

We then anticipated, at an early stage at least two and possibly more replacement MNDs would be elected by the pensioners and deferred pensioners.

It is disappointing that the Trustee's Report remains silent on this matter, as most members would consider this a fundamental issue if the Board of Trustee is to properly represent their interests. Particularly when the Pensions Regulator in the Draft Code of Practice No. 8 states - that "MNDs should be selected in accordance with the principles of proportionality, fairness and transparency".

Further information on the Code of Practice is available on the Pensions Regulator web site http://www.thepensionregulator.gov.uk.

5. Amicus

We have now established a line of communication with Amicus, who are currently involved in a major campaign in fighting for pensioners' rights. Last week Amicus held a very successful rally in Manchester to coincide with the Labour Party Conference, to draw attention to the plight of the many workers who have lost their pensions as a result of company failures.

We are hoping that through their Newsletter, Amicus will publicise our web site in an effort to further increase our membership.

6. Recruitment

Members need to recognise that the Agreement is not yet a "done deal" and even after the Agreement is ratified the Trustees still have the very difficult task of achieving their investment strategy which is required to eliminate the current "deficit" within 10 years.

With our current membership of 2000 we still lack the numbers necessary to have a credible voice, and we are looking for at least 10 to 15% of all the pensioners and deferred pensioners in the TH Pension Trust to register with us.

Membership of our Association is free and is now open to all the existing employees of TH Global plc, who will become deferred pensioners after the Agreement is ratified. (Except for the very small number of staff who will continue to be employed by the Trustee Company).

It is particularly important that we all persuade members without web site facilities to join our Association and we would ask all existing members to assist them where possible to complete the registration process.

Yours sincerely

Mike Street

1. The Agreement

Members should be aware that at this stage the Agreement is not yet "a done deal" as TH Global plc seem to have a serious problem in agreeing a financial settlement with their Bondholders.

The latest Notice from TH Global plc issued on 18 July 06, states that the Bondholders have served a formal Notice requiring TH Global plc "to remedy the breaches in respect of the 2005 accounts".

Clearly if TH Global plc fail to comply with this Notice from the Bondholders it could have serious consequences for the Company.

The Notice from TH Global plc states that a settlement with the Bondholders is required before TH Global plc can finalise the Proposed Agreement with the Trustee of the TH Pension Trust.

A copy of the Notice issued by TH Global is available on www.thglobal.com.

2. Reassurance regarding the Pension Protection Fund

The Trustee has advised us that with the revised structure, the TH Pension Trust will still be eligible for entry into the Pension Protection Fund if this proves to be necessary at a later date.

The press and our members have repeatedly questioned this point. We therefore considered it essential to obtain confirmation on this fundamental issue from the Pension Regulator and / or the Pensions Protection Fund. Earlier direct correspondence with the Pensions Regulator and Pension Protection Fund achieved no positive result, which only tended to increase our level of concern.

Members from all parts of the UK have recently written to their local Members of Parliament on this issue. This resulted in members contacting over 50 individual Members of Parliament and drawing their attention to our concerns on this matter.

Over the past 2 weeks our efforts have resulted in some success and the following is an extract from a letter sent by Mr P Dasgupta, Chief Executive of the Pension Protection Fund to a number of Members of Parliament who then forwarded copies to our members.

"The Pension Protection Fund was not party to the discussions between the Regulator and Kvaerner. However, from the information that is currently in the public domain, we can see no reason why, at the current point in time, the pension scheme would not be eligible to make a claim on the Pension Protection Fund.
Yours sincerely,
Partha Dasgupta Chief Executive"

This statement may fall short of what we would like, but it does provide a degree of reassurance and we would like to thank Mr Hobman (Pensions Regulator) and Mr Dasgupta (Pension Protection Fund) for providing us with this additional comfort. We would also like to thank Sir John Butterfill MP and all the other Members of Parliament who have so strenuously supported our cause.

3. Investment Strategy

Based on available information we understand that the TH Pension Trust has a deficit of about £250m (on an "on going basis"). The proposed payment of £101m will clearly improve this situation but will still leave a substantial deficit.

Members who have read the "Statement of Investment Principles" (available on the TH Pension Trust web site or on request from the Trustee) will appreciate that the Trustee is adopting a high-risk strategy in an effort to eliminate this deficit.

It has to be recognised that in future the TH Pension Trust will not have a "Sponsoring Employer" with the financial resources to cover the deficit. Under these circumstances we accept that the Trustee has no option but to adopt a high-risk investment strategy and we can only hope that such a strategy proves to be successful.

This does however underline the importance of having the "back up" of the Pension Protection Fund should this be required in the short, medium or longer term - or perhaps not at all if the investment strategy is successful.

4. Payment Guarantees

As stated in our last Newsletter we wrote to the Trustee to obtain some reassurance on the level of payment guarantee being offered by TH Global to cover the £101m payment into the TH Pension Trust. To date after 6 weeks we are still awaiting a reply.

From this lack of response we can only conclude that TH Global plc are only offering a minimal level of guarantee to support the above payments.

There is clearly a high level of secrecy regarding the terms of the Agreement. As the Trustee is holding our money and is negotiating the Agreement on our behalf it seems not unreasonable that as members we are provided with more detailed information - this is one of the points we would like to discuss with the Trustee.

5. Correspondence with the Vice Chair of the TH Pension Trust

Correspondence / discussions continue on a number of outstanding issues with Mrs Lyn Ellis (Vice chair of the Board of Trustee) and Sir Eric Parker (MND on the Board of Trustee). These issues will be covered in subsequent Newsletters.

6. Trustee Nominated Directors

We have asked Sir Eric Parker our representative on the Board of Trustee to propose that the New Board of Trustee should include at least four additional Member Nominated Directors giving us a total of 5 representatives on a board of 9 Directors.

7. Money-Box Programme

On the 8 July I represented kpfa.co.uk on the Radio 4 Money Box programme. Bob Howard from the BBC also interviewed Mr John Ralfe, Dr Ros Altmann, and Mr Nigel Waterson MP. The programme provided an interesting and fairly balanced overview of our situation.

A transcript of this programme can be obtained on http://news.bbc.co.uk/1/hi/programmes/moneybox/5161092.stm.

8. Recruitment

Over the past 6 to 8 weeks, recruitment has been limited and we currently have a total of just under 2000 members.

This is concerning as 2000 members out of 30,000 potential members implies that either the large majority of potential members are still unaware of the current situation or perhaps do not care.

We still foresee a "bumpy ride ahead" and we cannot over-stress the importance of kpfa.co.uk having a strong membership that can truly represent all pensioners, deferred pensioners and dependants across the UK.

The strength and effectiveness of our Association depends on YOU. If each member could recruit just one new member, this would double our membership which must be our short-term objective.

Yours sincerely

Mike Street

1. TH Global plc

Most members will now be aware that as from 20 March 2006 Kvaerner plc changed its name to TH Global plc.

On a similar basis the Kvaerner Pension Fund changed its name to the Trafalgar House Pension Trust.

The above are clearly administrative changes that will not affect pensioners or pensioners' rights.

2. The Agreement between the Trustee of the TH Pension Trust and TH Global plc

A letter to members dated 26 April 2006 from the Chairman of the TH Pension Trust outlined the terms of an Agreement between the TH Pension Trust and TH Global plc (the Principal Employer).

Under the terms of this Agreement, £101m will be paid into the TH Pension Trust over the next six/seven years. On completion of this Agreement in July 2006, TH Global plc will have discharged all future liability for the TH Pension Trust, which will then continue to operate on a "stand alone basis".

This Agreement ("cleared" by the Pensions Regulator) should secure the continuation of the Trust and provides members with a more attractive option than that available under the Pension Protection Fund.

In the media there has been speculation that as a result of this Agreement the Trust would not in the future be eligible to apply for entry into the PPF. The Trustee has responded to this in a press release dated 12 May 2006 in which it has outlined the organisational structure of the Fund.

The Trustee has stated that based on this structure "there would be no bar to the Fund being eligible for entry to the Pension Protection Fund, if future circumstances dictated this course of action was required. The Trustee has received legal advice to this effect, supported by Queen's Counsel's opinion". (The press release can be accessed on www.thglobal.com)

In addition to the above we have been asked by our members to seek clarification from the Trustee on a number of key points including:

• The proposed composition of the Trustee Board and the anticipated level of representation by Pensioners and Deferred Pensioners.
• Clarify if the payments to be made by TH Global plc over the next 6 years are guaranteed by a third party.
• Enquire when we can expect to receive the 31 March 2006 Actuarial Valuation Report with information on the current deficit.

3. Transfer of TH Global plc Staff to Aker Kvaerner

Aker Kvaerner in the UK currently hire in staff from TH Global plc on an agency basis.

Aker Kvaerner issued a press release on 26 April 2006 confirming that they will acquire a total of 1300 TH Global plc employees currently working for Aker Kvaerner in the UK.

To cover the cost of this transaction Aker Kvaerner will pay TH Global plc £64m over a 6 year period which will be used to part fund the above Agreement with the TH Pension Trust.

It is understood that the transferred employees will be given the opportunity to join the Aker Kvaerner Pension Scheme and will become "deferred pensioners" in the TH Pension Trust.

4. Recruitment

Membership continues to increase and is now approaching 2000.

Notwithstanding recent developments it is essential that we continue to increase our membership and we would again ask all our existing members to renew their efforts in recruiting new members in an effort to meet our minimum target of 3000 plus members.

As all existing employees of Kvaerner plc are now to become "deferred pensioners" we would invite them all to join our Association.

Yours sincerely

Mike Street