IMPAC MIDLAND REGION AUTUMN OPEN MEETING SUMMARY – 16th OCTOBER 2018

Thirty Midland Region members, including a couple of new faces, attended the Midland Region Autumn
Open meeting on Tuesday 16th October2018, at the Wollaton Park Community Association. A summary
of the meeting presentations follows below;

LOCAL REPORT – JOHN KENTON, MIDLAND REGION SECRETARY
– WRB Warehouse update – no real change, one tower remaining and site to be redeveloped in due course as part of University of Nottingham campus.
– Horizon Factory update – Demolition started with the HTD and IMPEX extensions now gone and the main factory to be demolished soon. Site acquired by Henry Boot builders for redevelopment – likely to be two or three medium sized commercial/industrial units.
– Deaths of local members – Janet Clifford; Jean Johnson; Daphne Francis; John Viles; Trevor Houseley

NATIONAL REPORT – CHRIS JACKSON, MIDLAND REGION CHAIRMAN
2018 National AGM Review
– A very disappointing attendance of ONLY 4 IMPAC members!! – Prompting a further review of how we handle future National AGMs
– All current serving Officers re-elected to National Council
– National AGM 2019 to be held in Nottingham – probably at Nottingham Mechanics, Shakespeare Street – provisionally on Tuesday 25th June 2019 – details to be confirmed in due course.

PFCC Meeting Schedule
– Imperial Brands cancelled the April 2018 PFCC meeting at short notice, due to ‘organisational’ changes at Head Office – subsequently IMPAC National Council meeting also cancelled.
– Further changes in the Pension Fund personnel:-
o Departure of Simon Lewis (PF Manager) due to ill health
o Return of Phil Hughes (previous PF Manager) to fill position until replacement found
o Ben Worthington (PFCC Chair) left the company, recently replaced by Pia Martscenko (UK HR Mgr)

ANNUAL REVIEW REPORT – NEIL HOPKINS, IMPAC NATIONAL CHAIRMAN
PENSION FUND SUMMARY
– High turnover of people this year; 6 out of 11 (55%) involved with pensions/finance; reflects the ‘modern day’ Imperial!
– Greater emphasis on recruiting ‘specialists’ and ‘experts’
– Raises some concerns with continuity and loss of traditional loyalty to pensioners?
– PF Manager Stephen Lewis left Imperial due to ill health: Phil Hughes brought back as temporary replacement
– First ‘non company PF Trustee recruited. David Fripp, ex KPMG, has Pension Fund Trustee experience and investment expertise
– Policy of ‘low risk’ investments now in practice
– Employee ‘liability’ falling rapidly due to, number of PF members down by 6%, lower cost of Pension fund, company salary cap etc
– PF value up £609 million (18%) to £3.9 billion; return on investments up5.4%; PF now in surplus, based on ‘Total Service Objective’ test – all very good news!

COMPANY SUMMARY
– Investors frustrated with fluctuating share price (30% down on last year) and reduced organic growth
– Continuation of high 10% dividend growth not sustainable
– Company criticised for slow uptake in embracing new Vaping technologies compared with competitors
– In response, concerns pacified by £2 billion sale of US business and enhanced ‘focus’ on ‘next generation’ of Vaping product – gives quicker nicotine ‘hit’ more in line with cigarettes.
– UK smokers numbers – 8 million smokers v 5 million Vapers; approx 19% of adults smoke v 46% in 1974!

IMPAC SUMMARY
– IMPAC National Council held its 100 th meeting in June 2018
– Ten members – all with specific role and responsibility
– Changes since 2017; Total membership numbers down 7%; Income down 8% and expenditure down 21%

PFCC SUMMARY
-PFCC is made up of all ‘stakeholders’ in IT Pension Fund
– Set up in 1991 following the High Court case as PF was high on the Company’s agenda at the time
– Major ‘relationship and trust’ issues with PF members needed addressing
– Membership changes over last 5 years; PF management – 2 (no change); IT Senior Management – 6 down
to 2; Employees reps – 6 down to 2; Pensioner reps – 8 down to 7;
– UK operations were 95% of total company – now much less!
– Identifies a recent change in Company emphasis
– The Company proposal – Discontinue with PFCC with immediate effect!
o A UK HR initiative based on current high workload, costs and logistical efforts to run meetings!
o Proposal ‘championed’ by new UK HR Manager who has never attended a PFCC Meeting!!
– IMPAC’s response;
o Extraordinary PFCC meeting requested to present our considered response to the proposal – accepted by Imperial and likely to be in November/December
o Develop a ‘defence document’ supporting our rationale for PFCC continued existence
o Meet with our legal advisors to establish the legality of the proposal
o Identify views of other PF stakeholders, Trustee Board members, MNTs etc
o Develop support and a lobby campaign

IMPAC’S FUTURE PRIORITIES
Looking for:
– A satisfactory resolution to PFCC issue with the Imperial Brands
– A further consolidation of the pension fund surplus by the PF Trustees
– Continued development of the de-risking investment strategy by the PF Trustees
– Less reliance on financial support for the pension fund by Imperial Brands Long term watching briefs on RPI v CPI, annuities knowledge etc

GUEST SPEAKER
Unfortunately, fellow IMPAC member, David Hunter was unable to be our guest speaker due health issues. We send our best wishes for a quick recovery and hope that he can be guest speaker at a future meeting.