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The HP Limited Retirement Benefits Plan

MyPension

Contents

Introduction

This statement explains the funding that supports your benefits in the Hewlett-Packard Section of the Hewlett-Packard Limited Retirement Benefits Plan (the Plan). It tells you about the longer-term outlook for the Plan and the substantial financial support Hewlett-Packard Limited (the Company) provides.

At 31 October 2022 the Plan assets had decreased in value to £1,226.3m. The funding target had also decreased to £1,235.9m. The resulting funding level is 99.2%, a decrease of 9.5% compared to the 2021 figure.

Financial chart for 2021 At 31 October 2021 the Plan assets had increased in value to £2,037.6m. The funding target had also increased to £1,873.9m. The resulting funding level is 108.7%, an improvement of 6.1% compared to the 2020 figures.

At 31 October 2021 the Plan assets had increased in value to £2,037.6m. The funding target had also increased to £1,873.9m. The resulting funding level is 108.7%, an improvement of 6.1% compared to the 2020 figures.

Financial chart for 2020 At 31 October 2020 the Plan assets had increased in value to £1,974.7m. The funding target had also increased to £1,924.0m. The resulting funding level is 102.6%, and this remains the same compared to the 2019 figures.

At 31 October 2020 the Plan assets had increased in value to £1,974.7m. The funding target had also increased to £1,924.0m. The resulting funding level is 102.6%, and this remains the same compared to the 2019 figures.

Financial chart for 2019 At 31 October 2019 the Plan assets had increased in value to £1,888.7m. The funding target had also increased to £1,840.2m. The resulting funding level is 102.6%, an improvement of 2.8% compared to the 2018 figures.

At 31 October 2019 the Plan assets had increased in value to £1,888.7m. The funding target had also increased to £1,840.2m. The resulting funding level is 102.6%, an improvement of 2.8% compared to the 2018 figures.

Financial chart for 2018 At 31 October 2018 the Plan assets were valued at £1,663.6m. The funding target was £1,666.3m resulting in a funding level of 99.8%.

At 31 October 2018 the Plan assets were valued at £1,663.6m. The funding target was £1,666.3m resulting in a funding level of 99.8%.

Chairman's Welcome

Welcome to the latest update on the funding of the Plan. In April 2021, we provided you with a funding statement which set out the results of the annual review as at 31 October 2020. 

The actuarial valuation as at 31 October 2021 has now been completed and the results are set out in this update. Since completion, the Plan Actuary has carried out a further funding assessment of the Plan as at 31 October 2022. The results of that assessment are also set out in this update. 

This statement includes background information to help you understand the Plan's funding, but you can also find more information about the Plan on our website at hprbp.com. If you would like to contact the Trustee, please email us at iphpplan@zedra.com or write to Kerry Merryweather, Plan Secretary, HP Plan Trustee, ZEDRA Inside Pensions, First Floor, Trident House, 42–48 Victoria Street, St. Albans, Hertfordshire, AL1 3HZ.

Finally, please make sure that you keep your personal information up to date with the Plan administrators, Equiniti. This includes your postal address, your email address and your Nomination of Beneficiary form. Equiniti Paymaster can be contacted on 0333 207 6553 or by emailing hp@equiniti.com. Nomination of Beneficiary forms can also be downloaded from our website.

Yours faithfully

Paul Early
Chairman of the Trustee
Hewlett-Packard Limited Retirement Benefits Plan

Funding the Plan

Under the Pensions Act 2004 we are responsible for setting a funding target for the Plan and agreeing it with the Company. The Plan’s funding is the money it has to support the payment of benefits. The Plan Actuary helps us to consider our funding target in detail, check the Plan’s progress against it and take action to deal with any shortfall or surplus. Long-term, the aim is to make sure that plans like ours are building up enough money to pay for the benefits due to members.

How the Plan operates

The Company pays contributions to the Plan so that the Plan can pay benefits to Plan members. Contributions have also been paid by or on behalf of active members.

The money to pay for members’ pensions is held in a common fund. It is not held in separate funds for each individual.

The results of the funding assessment as at 31 October 2022

The Plan Actuary carried out an updated funding assessment as at 31 October 2022. This showed that the Plan’s funding target was £1,235.9 million, whilst the value of the assets was £1,226.3 million, giving the Plan a shortfall of £9.6 million and a funding level of 99.2%.

Plan's funding target

Plan's assets value

Funding shortfall

£1,235.9 million

£1,226.3 million

£9.6 million

Changes in the funding level since the actuarial valuation

The funding level decreased over the year, with the surplus in the funding becoming a shortfall of £9.6 million. The main reason for this was that the value of the Plan's assets decreased, due to lower than expected investment returns. 

The decrease in the assets was partially offset by a decrease in the funding target over the period as a result from an increase in the expected return on bonds. This meant that less money was needed to be set aside in order to pay benefits in the future.

Although the funding level fell over the year, no contributions were due from the Company following the annual check.

Recovery Plan

As the Plan was in surplus at the date of the actuarial valuation, a recovery plan is not currently required and no contributions are currently being paid to the Plan. An annual check is carried out to determine whether any contributions are required by the Company.

The results of the actuarial valuation as at 31 October 2021

The Plan Actuary has certified the results of the actuarial valuation as at 31 October 2021. This showed that the Plan’s funding target to be 100% funded was £1,873.9 million, whilst the value at the same date was £2,037.6 million, giving the Plan a surplus of £163.7 million and a funding level of 108.7%.

Plan's funding target

Plan's assets value

Funding surplus

£1,873.9 million

£2,037.6 million

£163.7 million

Changes in the funding level since your last Summary Funding Statement 

The funding assessment as at 31 October 2020 showed that the funding level was 102.6%, resulting in a surplus of £50.7 million. The funding level has therefore increased over the year and the surplus in the funding has increased by £113.0 million.

The main reason for the increase in the funding surplus was that investment returns were higher than expected.

The security of your benefits

We check the money available to support the Plan regularly, but the Plan relies on the Company and its financial support to:

  • Make contributions to fund the cost of the benefits building up, over and above the amount members contribute.
  • Make extra contributions when there is a shortfall.

There have not been any payments to the Company from the assets of the Plan since the date of the last statement.

The Pensions Regulator can change the Plan, give directions about working out its technical provisions or impose a schedule of contributions. The Regulator has not needed to use any of these powers for the Plan.

The Pension Protection Fund

If the Plan starts to wind up before you retire, the Company has to pay whatever the Plan needs to buy the insurance policies for members. If the Company becomes insolvent, the Pension Protection Fund (the PPF) may step in and pay some compensation to members.

There are more details on the PPF’s website at www.ppf.co.uk.

Alternatively, you can write to the PPF at:
PO Box 254
Wymondham
NR18 8DN

What is the Plan invested in?

The Trustee regularly reviews the Plan's investments and the investment strategy. The current investment strategy is to invest 10% in growth-type assets (such as company shares) and 90% in protection-type assets (bonds and other assets that closely match the liabilities of the plan). Interest-rate and inflation hedges are also used to reduce the sensitivity of the funding level to changes in these.

Additional documents available on request

You are entitled to request a number of Plan documents including the following:

  • The latest Trustee’s Report and Financial Statements
  • The full report by the Plan Actuary on the actuarial valuation as at 31 October 2021
  • The Plan Actuary's report assessing the funding level as at 31 October 2022
  • The Statement of Funding Principles
  • The Statement of Investment Principles
  • The Schedule of Contributions
  • The Recovery Plan
  • The Members' booklet (which you should have received when you joined the Plan)
  • The report setting out how the Trustee meets climate governance requirements in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). The first TCFD report is available on the Plan website or on request in the same way as other documents, as set out below.

If you would like a copy of any of these documents, they can be found on the Plan website: hprbp.com. Alternatively, please email the Trustee to request a copy at iphpplan@zedra.com or write to Kerry Merryweather, Plan Secretary, HP Plan Trustee, ZEDRA Inside Pensions, First Floor, Trident House, 42–48 Victoria Street, St. Albans, Hertfordshire, AL1 3HZ.

Key terms

This statement is based on the scheme-specific funding requirements set out in the Pensions Act 2004. Here are some key terms and what they mean:

Statutory funding objective

The statutory funding objective is that any plan should hold assets whose value is no less than its ‘technical provisions’. 

Technical provisions

This is the amount that the Trustee determines the Plan will need to pay members’ benefits for service up to the valuation date.

Funding level

The Plan Actuary compares the technical provisions with the market value of the assets to derive the funding level which is expressed as a percentage. A funding level of 100% means that the value of assets exactly equals the technical provisions.

Statement of Funding Principles

This is a document that sets out the Trustee’s policy for meeting the statutory funding objective. It covers:

  • The method and assumptions to use.
  • How the Plan Actuary works out Company contributions.
  • How quickly the Trustee and the Company aim to make up any shortfall.

Recovery Plan

If the value of assets is less than the technical provisions (i.e. there is a funding shortfall), the Trustee and Company must agree steps to be taken – usually involving additional Company contributions to eliminate the shortfall. These steps are recorded in a document known as a Recovery Plan.

What is an Actuarial Valuation?

The aim of an actuarial valuation is to suggest:

  • How much money the Plan needs to cover the benefits members have already earned.
  • What contributions the Plan needs for benefits building up in future.

No-one can predict what will happen in the future with certainty, but by choosing sensible assumptions, it is possible to estimate how much money is needed now to provide benefits in the future. As the Trustee, we then use our judgement to decide on an appropriate funding plan. It is a legal requirement that we discuss and agree with the Company the assumptions to be used and the funding plan to be adopted. The Trustee also seeks the advice of the Plan Actuary, one of our professional advisers, before making any decisions.

In the actuarial valuation, the Plan Actuary compares:

  • The assets the Plan is building up through its investments, in its bank balances and any money owed to the Plan; with
  • The liabilities the Plan has to pay, including administrative expenses and benefits for members and their families, based on the assumptions chosen.