Input of States of Jersey into the management of the JEC pension scheme

1240/5(2995)

WRITTEN QUESTIONS TO THE MINISTER FOR TREASURY AND RESOURCES BY DEPUTY G.P.SOUTHERN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY 26th SEPTEMBER 2006

Question

1. Would the Minister inform memberswhetherthe States of Jersey hasanyinput into the managementof the Jersey Electricity CompanyLimited's (JEC) pension schemeand,if not, the reasons why given that the States own54%oftheordinary shares ofthecompany?
2. What consideration, if any, has the Minister given to the introduction of a pensions law and pensions regulator in Jersey,using the principles of the U.K. Pensions Acts 1997 and2004 and, if not, the reasons why?
3. Will the Minister outline whatmeasures, if any, he will take to ensure that the pensions of current and future Jersey Telecom employees are protected following its projected sale?

Answer

1. The Jersey Electricity CompanyLimited's pension scheme is managedby a Board ofTrustees that discharges its responsibilities in the interests of the schemes' beneficiaries and as such negotiates with the Board of the JEC. The pensionschemeis a totally distinct legal entity andindependentof the JEC.The Minister is not a Memberof either theBoard of Trustees or the Board of the JEC and assuchhasnodirectmanagement responsibility orpowers.

T h e States currently holds 54 percent of the total share capital in the JEC. Of the remaining shares, 38 percent

of the ordinary share capital is owned by private investors who have purchased their shares on the London Stock Exchange where the company has a full listing.

T h e Board of the JEC has, under the stock exchange regulations, an obligation to meet the objectives of its

minority shareholders as well as to meet those of its majority shareholder, the States.

A  s a shareholder of a listed company the Minister has the opportunity to express to the Board his views on

any matter but ultimately the Board is responsible for making decisions in the interests of the company, not any single shareholder.

2. As Minister for Treasury and Resources I have undertaken no work in this connection. It wouldbe a matter for the Minister for Social Security toprogress, if it were deemed appropriate, to do so.

T h e Strategic Plan includes a commitment to prepare and start to introduce a co-ordinated plan, including a

review of pension provision to meet the challenges and opportunities presented by an ageing population. Consultation in respect of this initiative to be lead by the Social Security Department will include consideration of the need or otherwise for Pension Regulation.

3. I reiterate the comments I have made elsewhere. TheTreasury and ResourcesDepartmentisdeveloping measures in conjunction with the Chief Minister's Department, the Law Officers' Department, the Committee ofManagement for PECRS and specialist advisers. Once these measures are fully researched they will bepresented to the States for approval.