THE VAUXHALL MOTORS LIMITED PENSION PLAN · 1 The Vauxhall Motors Limited Pension Plan TRUSTEE AND...

THE VAUXHALL MOTORS LIMITED

PENSION PLAN

Report and Accounts For the Year Ended 31 December 2008

Registration Number 10000400

C O N T E N T S

Trustee and Advisers 1

Report of the Trustee 2 - 9

Investment Report 7 - 8

Statement of Trustee’s Responsibilities 9

Report of the Actuary 10 - 11

Schedule of Contributions 12 - 14

Independent Auditors’ Report 15 - 16

Fund Account 17

Net Assets Statement 18

Notes to the Financial Statements 19 - 27

Independent Auditors’ Statement about Contributions 28

Summary of Contributions 29

Members’ Information 30

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Appendix:

The GM (UK) Common Investment Pool Report & Accounts for the year ended 31 December 2008

1

The Vauxhall Motors Limited Pension Plan

TRUSTEE AND ADVISERS

Participating Companies

General Motors UK Limited

GMOC Administrative Services Corporation

Vauxhall Recreation Club

Vauxhall Motors Sports and Social Club

IBC Vehicles Limited Arinso People Services Limited

Trustee

GM (U.K.) Pension Trustees Limited

Directors of the Trustee

Employee Nominated I. Bruce, P. Fildes, J Kennedy, G. Taylor (Chairman), C. Weatherston

G. Weaver, A.C. Lines

Company Nominated R. Assinder (Vice Chairman, appointed 1 August 2008), P Croxford (appointed 1 April 2008)

L. Davies, J. Fulcher (resigned 1 August 2008), M. Johnson (resigned 1 November 2008) S. Mallows, P. Millward, R Molyneux (Chairman, resigned 13 May 2009),

D. Marnoch (resigned 1 April 2008), J Mackerness (appointed 1 November 2008)

Secretary to the Plan

D. P. Mount

Actuary

G. Thompson Hewitt Associates Limited

Solicitors

Slaughter and May LLP

Registered Auditors

PricewaterhouseCoopers LLP

Bankers

Lloyds TSB Bank plc

Investment Manager

Promark Investment Trustees Limited (formerly named GM Investment Trustees Limited)

Investment Consultants

The Frank Russell Company

Plan Administration General Motors UK Limited

Griffin House, Osborne Road Luton, Bedfordshire LU1 3YT


2

Report of the Trustee for the year ended 31 December 2008

The Trustee of The Vauxhall Motors Limited Pension Plan (the “Plan”) presents its annual report together with the investment report, actuarial statements and certificates, summary of contributions and financial statements for the year ended 31 December 2008.

Constitution of the Plan

The Plan was established on 31 July 1988 under, and is governed by, a Trust Deed and Rules, as amended. It is a registered pension scheme under the Finance Act 2004. The Plan is contracted-out of the Second State Pension (S2P).

The Plan is of the defined benefit type where pensions are determined by earnings levels and length of service. The Plan is contributory and provides retirement and dependants’ pensions. The Plan also provides death benefits, before and after retirement, and discretionary ill-health pensions.

Membership in the Plan is not compulsory but employees are eligible to become full or associate members based on certain scheme criteria.

Full members are contracted-out of the State Second Pension; associate members are not contracted-out. Service after 6 April 1997 is contracted out using the “reference scheme test” basis introduced by the Pensions Act which requires the Plan actuary to certify that the Plan is expected to provide pensions for at least 90% of contributing members, which are at least as good as those under a reference scheme set out in the Pensions Act.

Plan Advisers

There are written agreements in place between the Trustee and each of the Plan advisers listed on

page 1 and also with the principal company – General Motors (UK) Limited (the “Company”). There

were no changes in Plan advisers during the year.

Management of the Plan

The Trustee of the Plan, GM (U.K.) Pension Trustees Limited (the “Trustee”), was appointed and

may be removed by the Company. The Plan rules contain provisions for the appointment and

removal of the Trustee. The names of the current Trustee Directors are included on page 1.

The Trustee met on 13 occasions during the year.

Risk Management

The Trustee has overall responsibility for internal controls and risk management. They are committed to identifying, evaluating and managing risk and to implementing and maintaining control procedures to reduce significant risks to an acceptable level. In order to meet this responsibility the Trustee has adopted a risk policy. The objective of this policy is to limit the exposure of the Trustee, and the assets that it is responsible for safeguarding, to business, financial, operational, compliance and other risks where possible.

The Trustee has created a Risk Register. The purpose of the Risk Register is:

to highlight the scope of risk to which the Plan is exposed from the Trustee’s perspective;

to rank those risks in terms of likelihood and impact; and

to identify management actions that are either currently being taken, or that are believed should

be taken, in order to mitigate the identified risks.


3

Report of the Trustee for the year ended 31 December 2008 (cont’d)

Trustee Training

The Pensions Act 2004 requires trustees to have knowledge and understanding of pensions legislation, investments, the scheme’s trust deed and rules, their statement of investment principles, the statement of funding principles and other documentation which sets out administration policy in relation to the scheme. A training log has been established by the Trustee and each director is responsible for reporting to the Plan secretary which module of the Pension Regulator’s toolkit they have completed and which additional training programmes they have attended. During the year Trustee Directors have attended specialist training courses offered by the legal advisors, actuaries, investment manager, custodian and auditor.

Actuarial Valuation

The Trustee must obtain an actuarial valuation of the Plan at least once every three years, to determine the funding level and to provide the basis for it to agree the Schedule of Contributions with the employer. The last actuarial valuation of the Plan was carried out as at 1 January 2008.

The results of the valuation form the basis for decisions about contributions to the Plan for future service benefits. The actuary works out if the assets currently in the Plan are sufficient to pay the past service benefits that have already accrued. To do this, he uses many assumptions and these are agreed between the Trustee and the Company. If there is a shortfall in the Plan for the past service benefits, the Trustee negotiates with the Company to agree a plan to achieve a fully funded status.

In the event, the most recent valuation reported a shortfall of just over £600m, equal to a funding ratio of 67.7%. However, it should be noted that due to the current economic and other uncertainties, the Trustee decided to use more prudent assumptions for the valuation, essentially making the funding target harder to reach. The result shows that over £200m of the shortfall was due to this change in the assumptions.

The Trustee and the Company agreed that the Company will continue to pay contributions to the Plan at the rate of £33m per year but that these will increase at twice the annual increase in the RPI. In addition, the Company will pay the annual levy due to the Pension Protection Fund and additional contributions if the Company’s borrowings from GM reduce substantially due to operational reasons.

Based on the January 2008 valuation, the actuary estimates that the Plan will reach fully funded

status over a period of 13 years

During the year, employees contributed at a rate of 8% of pensionable pay.

The principal assumptions underlying the valuation were: the discount rate, which took into account the ability to actually achieve a higher return than gilts, was set at 5% per annum, pay increases at 3.4% per annum, price inflation at 3.4% per annum and increases to pensions in payment (in excess of the guaranteed minimum pension in payment) of 2.4% per annum. Assets were assumed to achieve returns of 6.5% per year. Mortality assumptions have been revised upwards with 65 year old males assumed to live to 86.2 (previously 83.6); females are assumed to live to 87.3 years (previously 86.2 years.)

The next valuation of the Plan will be carried out as of 1 January 2011.


4


Plan Membership Employee members Number at 1 January 2008

3,990

Add Adjustment

1

Employees joining during the year

51

Less Employees leaving during the year

Retirements

(83)

Deaths

(1)

Transfers out

(1)

Early leavers with deferred pensions (61)

Early leavers with refunds

(5) (151)

Number at 31 December 2008

3,891

Pensioner members Number at 1 January 2008

7,208

Add New pensioners during the year 83

New dependent pensioners

79

Deferred pensions into payment

22 184

Less Deaths and terminated pensions

(126)


7,266

Deferred members Number at 1 January 2008

4,734

Adjustment to opening balance

(5)

Add Leavers during the year

61

Less Transfers out

(22)

Deaths and terminations

(7)

Deferred pensions into payment (22) (51)


4,739

Total membership at 31 December 2008

15,896


5


Pension Increases

The guaranteed rate of annual increase of pensions in the course of payment, for service before 31

December 1991, is the lower of 3% or one half of the rise in the RPI. This guarantee to increase

benefits has been extended until the payment in April 2011.

The guaranteed rate of increase of pensions in the course of payment, for service from 31 December

1991 to 5 April 2006, is the lower rate of 5% or the RPI; for service thereafter the cap is reduced to

2.5% p.a.

In 2008 pensions in payment increased by X% for members who left service before 31 December

1991, X% for members who left service between 31 December 1991 and 5 April 1996, and X% for

members who left service since 5 April 1996.

Transfer Values

Regulations were published in April 2008 which moved responsibility for the calculation of transfer values from the actuary to the Trustee. Unfortunately, although the regulations became effective on 1 October 2008, guidance on the calculation of transfer values was not published by the Regulator until 29 September. As soon as the regulations were published, the Trustee immediately started to review the method and assumptions used, based on advice from the actuary. As the calculation of transfer values is now Plan specific, each of the pension plans requires its own calculations. Administration set up a process to work through the applications in date received order, giving priority to those requiring them for divorce purposes.

Review of Financial Development of the Plan

Due to Plan administrative delays and the Trustee’s on-going assessment of the employer covenant,

financial statements, and therefore a statement from the auditor, were not obtained within seven months of

the Plan’s year end. In all other material respects, the financial statements have been prepared and

audited in accordance with regulations made under section 41(1) and (6) of the Pensions Act 1995. The

Plan has also adopted the revised Statement of Recommended Practice, “Financial Reports of

Pension Schemes” (May 2007) in this report and accounts.

Further Information

Further details of investment performance are included in the investment report. Requests for

additional information about the Plan generally, or queries relating to members' own benefits, should

be made to the Plan administrators, whose address appears on page 1 of this report. Further

information for members is included in members’ information at the back of this annual report.

The Trustee has been notified that:

On 1 June 2009, General Motors Corporation (“GM Corp”) announced that it had filed voluntarily

petitions for relief under Chapter 11 of the United States Bankruptcy Code to provide protection from

creditors whilst it undertakes a restructuring of its businesses. Restructuring plans include the sale of

substantially all of the global assets of GM Corp to a new holding company “General Motors

Company” (“GMC”), for which court approval was received on 6 July 2009, and a capital

restructuring, whereby it is intended that a significant proportion of the outstanding debt owed by GM

Corp will be exchanged for equity in GMC. This restructuring is not yet complete. In addition, the

amount of funding that can be provided by GM Corp to entities outside of the USA, including the

Plan’s principal employers and the Company, is severely restricted as a result of agreements

between GM Corp and the US government.


6


GMC’s Europe operations (“GME”), including the Company, are not included in the Chapter 11

filing or court supervised process and they continue normal operations, but are severely restricted

in the availability of funding they may receive from GMC. GME has, therefore, been seeking its own

sources of financing to fund its operations. On 1 June 2009, GME reached an agreement to secure

approval for €1.5 billion of bridge financing from the German Government and entered into a non-

binding memorandum of understanding to partner with Magna International Inc for certain of GME’s

European operations. Under the agreement, the shares of [GM Automotive UK and its subsidiaries,

including the Company], were transferred to the ownership of Adam Opel GmbH (“Adam Opel”), a

former fellow subsidiary of GM Corp. The majority of Adam Opel’s shares (65%) were put into an

independent trust (the balance to remain with GMC), while negotiations with Magna proceed.

Agreement is expected to be reached in the near future.

The directors of the Company have assumed that the restructuring of GM Corp and the sale of the

GM Automotive UK and Adam Opel businesses will complete successfully and that the operations

of the Company will continue on a going concern basis. However, at the date of approval of the

Plan’s report and accounts, neither event has concluded. In the event that either of these

processes does not complete, the Company may be unable to continue as a going concern.

Nevertheless, after making enquiries, and considering the material uncertainties described above,

the directors of the Company currently have a reasonable expectation that the Company will be

able to secure adequate resources to continue in operational existence for the foreseeable future.

The Trustee has been advised that the Company currently remains committed to the Plan, it

continues to meet its obligations under the schedule of contributions, and has no plans to reduce

pension payments, cease contributions or close the Plan.


7


Investment Report

The Plan participates in The GM (UK) Common Investment Pool (“CIP”) the generic name for ten Pension Fund Pooling Vehicles (“PFPV’s) and one Property Unit Trust (“PUT”). The CIP holds investments on behalf of the Plan and is administered by a corporate trustee, Promark Investment Trustees Limited (PITL) (formerly named GM Investment Trustees Limited), which appoints independent investment managers to manage the investments.

Details of investments and a financial review are set out in the report and financial statements of the CIP which form an integral part hereof.

As required under section 35 of the Pensions Act 1995, copies of the Statement of Investment

Principles (“SIP”) are available on request from the Plan administrators.

Investment Objectives

The Trustee wishes to ensure that the Plan can meet its obligations to the beneficiaries while recognising the cost implications to the participating companies of pursuing excessively conservative investment strategies.

The objectives of the Plan, as set out in the SIP, are defined as: wishing to maximise the long-term

return on investments subject to, in its opinion, an acceptably low likelihood of failing to achieve an

ongoing 100% funding level.

Asset Allocation

It is current policy for an asset/liability study to be conducted on a triennial basis. The most recent

study was completed in 2006 and the following strategic asset allocation has been in place since

that date.

Asset Allocation

%

UK Equities 16

International Equities 37

Emerging Market Equities 2

UK Index-Linked Bonds 5

International Hedged Fixed Interest Bonds 20

Property 15

Alternative Investments 5

100

The Trustee has signed an investment management agreement with PITL, covering PITL’s role in controlling the asset allocation for the Plan, and aiming to add value through tactical asset allocation. As required, additional contributions to the Plan are invested in new units in the various PFPV’s or if cash is required to pay pensions or other benefits, units are liquidated from the PFPV’s. Wherever possible, PITL tries to match any transactions with other pension plans in the CIP.


8


Employer-Related Investments

On 2 January 2007 the Trustee agreed a new 5 year lease on a full insuring and repairing basis with General Motors UK Limited (GM (UK)) on the Technical Centre, a property occupied by the Company. This lease was structured as a bond, based on an underlying value of £6.0 million and yielding 11% per year at an annual rent of £660,000.

This replaced the 15 year lease agreed on 31 December 1991 when the Company simultaneously sold the freehold of the property for £5.79 million and entered into a leaseback transaction with the Trustee of the Plan.

The Plan has an option to sell the property back to GM (UK) at the end of 2011 for £6 million. GM (UK) also has an option to buy the property back at a 7% premium on either 1

st July 2009 or at

expiry of the lease by giving six months notice. GM (UK) did not exercise this option on 1st July 2009.

The property represents 0.6% of the total Plan value at 31 December 2008, (2007: 0.5%) and the investment complies with all restrictions prescribed by regulations. The Company on behalf of the Plan holds the documents of title. Further details are set out in the notes to the financial statements.

In addition, the Plan owns within the International Bond PFPV £25,000 (2007: £57,000) of bonds issued by General Motors Corporation; this represents <0.1% of the Plan value (2007: <0.1%).

Custody

Appropriate steps have been taken to safeguard the assets of the Plan. Details of the custody arrangements for the majority of the assets which are held in the CIP are set out in the report and financial statements of the CIP. Documents of title to the other assets of the Plan are held by the Company.

Investment Performance

During 2008, markets were negative and the Plan’s overall return (via its combination of assets in

the CIP and the self-investment in the Technical Centre) was (24.90)% before fees, a shortfall of

3.7% against the benchmark. The three year and five year annualised returns of (4.10)% and 3.50%

were 1.40% and 0.90% negative, respectively, to the benchmark.

Total Rates of return For Periods ended

31/12/2008 (annualised)

Total Rates of return For Periods ended 31/12/2007

(annualised)

1 year 3

years 5 years 1 year 3 years 5 years

% % % % % %

Plan returns

(24.90)

(4.10)

3.50

5.00

12.20

12.80

Benchmark

(21.20)

(2.70)

4.40

5.30

12.00

12.90

Out/(under)- performance (3.70)

(1.40) (0.90) (0.30) 0.20 (0.10)

Market reports and detailed analysis of the CIP performance are set out in the report and financial statements of the CIP.

Since the year end, the value of investments in the global market place has fluctuated considerably due the current economic environment. This has also had a significant impact on the total rates of return in the value of the Plan’s investments in the CIP. Based on the latest available unaudited management data, as of 30 June 2009, the Plan’s return to date in 2009 was approximately 1.4% compared to a benchmark of 0.7%.


9


Statement of Trustee’s Responsibilities

The financial statements are the responsibility of the Trustee. Pension scheme regulations requires the Trustee to make available to Plan members, beneficiaries and certain other parties, audited financial statements for each Plan year which:

show a true and fair view, in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), of the financial transactions of the plan during the plan year and of the amount and disposition at the end of the plan year of its assets and liabilities, other than liabilities to pay pensions and benefits after the end of the plan year, and

contain the information specified in the Schedule to the Occupational Pension Plans (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996, including a statement whether the financial statements have been prepared in accordance with the Statement of Recommended Practice “Financial Reports of Pension Schemes”.

The Trustee has supervised the preparation of the financial statements and has agreed suitable accounting policies, to be applied consistently, making any estimates and judgements on a prudent and reasonable basis. The Trustee is also responsible for making available certain other information about the Plan in the form of an Annual Report. The Trustee is responsible under pensions legislation for ensuring that there is prepared, maintained and from time to time revised a schedule of contributions showing the rates of contributions (other than voluntary contributions) payable towards the Plan by or on behalf of the employer and the active members of the plan and the dates on or before which such contributions are to be paid. The Trustee is also responsible for keeping records in respect of contributions received in respect of any active member of the plan and for monitoring whether contributions are made to the plan by the employer in accordance with the schedule of contributions. Where breaches of the schedule occur, the Trustee is required by the Pensions Acts 1995 and 2004 to consider making reports to the Pensions Regulator and to members. The Trustee also has a general responsibility for ensuring that adequate accounting records are kept and for taking such steps as are reasonably open to it to safeguard the assets of the plan and to prevent and detect fraud and other irregularities, including the maintenance of an appropriate system of internal control. Trustee: GM (U.K.) Pension Trustees Limited Signature: Name (Trustee Director):

…………………………………… 2009


10

Report of the Actuary

ACTUARY’S CERTIFICATION OF TECHNICAL PROVISIONS

ACTUARIAL CERTIFICATE GIVEN FOR THE PURPOSES OF REGULATION 7(4) (a) OF THE

OCCUPATIONAL PENSION SCHEMES (SCHEME FUNDING) REGULATIONS 2005

Name of Plan: Vauxhall Motors Limited Pension Plan

Calculation of technical provisions

I certify that, in my opinion, the calculation of the Plan’s technical provisions as at 1 January 2008 is made in accordance with regulations under section 222 of the Pensions Act 2004. The calculation uses a method and assumptions determined by the trustees of the Plan and set out in the Statement of Funding Principles dated 28 May 2009.

Signature Date 28 May 2009 Name Gerard Thompson FIA Qualification Fellow of the Institute of

Actuaries Address Parkside House

Ashley Road Espom Surrey KT18 5BS

Name of Employer Hewitt Associates Limited


11

Report of the Actuary (cont’d)

ACTUARIAL CERTIFICATE GIVEN FOR THE PURPOSES OF SECTION 57 (1) (b) OF THE PENSIONS ACT 1995

(OCCASIONAL OR PERIODIC CERTIFICATION OF CONTRIBUTIONS)

Name of scheme: The Vauxhall Motors Limited Pension Plan

Adequacy of rates of contributions

1. I certify that, in my opinion, the rates of contributions shown in this schedule of contributions are such that the statutory funding objective could have been expected on 1 January 2008 to be met by the end of the period specified in the recovery plan dated 28 May 2009.

Adherence to statement of funding principles

2. I hereby certify that, in my opinion, this schedule of contributions is consistent with the Statement of Funding Principles dated 28 May 2009.

The certification of the adequacy of the rates of contributions for the purpose of securing that the statutory funding objective can be expected to be met is not a certification of their adequacy for the purpose of securing the scheme’s liabilities by the purchase of annuities, if the scheme were to be wound up.

Signature Date 1 June 2009

Name Gerard Thompson Qualification Fellow of the Institute of Actuaries

Address Parkside House

Ashley Road

Epsom

Surrey

KT18 5BS

Name of employer Hewitt Associates Limited


12

Schedule of Contributions


Schedule of Contributions Introduction This schedule of contributions is required by Section 227 of the Pensions Act 2004. It comes into effect on the date of certification of this schedule by the Scheme Actuary and covers the period to 31 December 2020. The Plan’s Trustee is responsible for preparing a revised schedule no later than 31 March 2012. This schedule covers contributions to the Plan from all employers who participate in the Plan from time to time. Employer Contributions The participating employers will pay total contributions to the Plan as follows:

Type Period Amount

Regular The period commencing with the date of certification of this schedule by the Scheme Actuary and ending on 31 December 2020.

£33M p.a. payable monthly, increasing annually at twice the increase in RPI, subject to a maximum annual increase of 10%.

PPF levies The period commencing with the date of certification of this schedule by the Scheme Actuary and ending on 31 December 2020.

Amount fixed by the PPF Board

Members in Pensionable Salary Sacrifice Service

The period commencing with the date of certification of this schedule by the Scheme Actuary and ending on 31 May 2010 or, if earlier, the end of short term working

(1).

Top Tier members

8% of Pensionable Pay and 8% of the LEL

Middle Tier members


Basic Tier Member

8% of Pensionable Pay

Members in Pensionable Salary Sacrifice Service opting for 1/70ths accrual

The period commencing on 1 June 2010 or, if earlier, the end of short term working, and ending on 31 December 2020

(1).

Top Tier members


Middle Tier members


Basic Tier Member


Members in Pensionable Salary Sacrifice Service opting for 1/60ths accrual


(1).

Top Tier members


Middle Tier members

10% of Pensionable Pay and 2.5% of the LEL

Basic Tier Member


Associate members in Salary Sacrifice Service

The period commencing with the date of certification of this schedule by the Scheme Actuary and ending on 31 December 2020.

0.4% of Pay

"Profit share" The period commencing with 1 June 2009 and ending 31 December 2020.

£10M for each £100M by which the Company's indebtedness to General Motors reduces.

Further details of this are set out in the agreement dated 13 May 2009 between the Trustee and the Company

Note

(1) Or some later date as determined by the Company, but not later than 31 May 2010.


13

Schedule of Contributions (cont’d)

Short-term working may cease on different dates from site to site.

The participating employers will ensure that the Trustee receives these contributions within 19 days of the end of the calendar month to which the contributions relate. The date of receipt will be taken as the date on which the contributions become available for the Trustee to use. Employer's contributions in respect of Member's Notional AVCs for these Members in Pensionable Salary Sacrifice are payable in addition. Defined Contributions GMUK may introduce a Defined Contributions ("DC") Section to the Plan during 2009/2010. Any company contributions (net of salary sacrificed to member contributions) to a DC Section of the Plan should be taken into account in the schedule of contributions (i.e. would reduce the contributions to the Defined Benefit ("DB") Section of the Plan by the same amount). This would apply for new starters or existing employees who opt to join a DC Section. It will not be possible to be an active member of both the existing DB Section of the Plan and a new DC Section. Payments to cover early retirements The participating employers will pay any additional amounts as advised by the Scheme Actuary to be required to cover the costs of early retirements under age 62 by the end of January in the year immediately following the calendar year ending during which the retirements occur. The date of receipt will be taken as the date on which the contributions become available for the Trustee to use. Payments to cover augmentations and other discretionary benefits The participating employers will pay any additional amounts as advised by the Scheme Actuary to be required to cover the costs of augmentations and other discretionary benefits. The payments will be due by one month after the later of the effective date of the benefit being agreed and the date the cost is notified to the employer. The date of receipt will be taken as the date on which the contributions become available for the Trustee to use. Employee Contributions Employees who are active members of the Plan and not in Pensionable Salary Sacrifice Service will contribute to the Plan as follows:

Category Period Amount

All members The period commencing with the date of certification of this schedule by the Scheme Actuary and ending on 31 May 2010 or, if earlier, the end of short term working

(1).

Top Tier members


Middle Tier members


Basic Tier Member


Members opting for 1/70ths accrual


(1).

Top Tier members


Middle Tier members


Basic Tier Member


Members opting for 1/60ths accrual


(1).

Top Tier members


Middle Tier members

10% of Pensionable Pay and 2.5% of the LEL

Basic Tier Member



14

Schedule of Contributions (cont’d)

Associate members The period commencing on the date of

certification of this schedule by the Scheme

Actuary and ending on 31 December 2020.

0.4% of Pay

Signed on behalf of the Plan’s Trustee

Signature:____________________________

Name: R. Assinder______________________

Capacity: Treasurer______________________

Date: 20/08/2009________________________

Signed by General Motors UK Limited on behalf of the Participating Employers Signature:____________________________

Name: S A Mallows______________________

Capacity: Trustee_______________________

Date: 20/08/2009________________________


15

Independent Auditors’ Report to the Trustee of The Vauxhall Motors Limited Pension Plan

We have audited the financial statements of The Vauxhall Motors Limited Pension Plan for the year ended 31 December 2008 which comprise the Fund Account, the Net Assets Statement and the related notes. These financial statements have been prepared under the accounting policies set out therein. Respective responsibilities of Trustee and Auditors

The Trustee’s responsibilities for obtaining an Annual Report and audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustee’s responsibilities. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the Trustee as a body in accordance with Section 41 of the Pensions Act 1995 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. We report to you our opinion as to whether the financial statements give a true and fair view and contain the information required by the relevant legislation. We also report to you if, in our opinion, we have not received all the information and explanations we require for our audit. We read the other information contained in the annual report and consider whether it is consistent with the audited financial statements. This other information comprises all of that set out in the contents page. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by or on behalf of the Trustee in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Plan's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.


16

Independent Auditors’ Report to the Trustee of The Vauxhall Motors Limited Pension Plan (cont’d)

Opinion

In our opinion:

the financial statements give a true and fair view, in accordance with United Kingdom

Generally Accepted Accounting Practice, of the financial transactions of the Plan during the

year ended 31 December 2008, and of the amount and disposition at that date of its assets

and liabilities, other than the liabilities to pay pensions and benefits after the end of the

year, and

the financial statements contain the information specified in Regulation 3 of, and the

Schedule to, the Occupational Pension Schemes (Requirement to obtain Audited Accounts

and a Statement from the Auditor) Regulations 1996.

PricewaterhouseCoopers LLP

Chartered Accountants and Registered Auditors

London

……………………………….. 2009


17

Fund account for the year ended 31 December 2008

Notes Year Ended Year Ended

31-Dec-08 31-Dec-07

£'000 £'000

Contributions and benefits

Contributions receivable 3

63,345

56,358

Transfers in 4

391

509

Other income

376

4

64,112

56,871

Benefits payable 5

64,967

62,705

Leavers 6

2,027

2,309

Administrative expenses 7

8,803

2,139

75,797

67,153

Net (withdrawals)/additions from dealings with members

(11,685) (10,282)

Returns on investments Investment income 8 661 663

Change in market value of investments 10 (318,603) 57,396

Investment management expenses 9 (455) (484)

Net returns on investments

(318,397) 57,575

Net increase in the fund during the year

(330,082) 47,293

Net assets of the Plan

At 1 January

1,308,487

1,261,194

At 31 December

978,405

1,308,487


18

Net assets statement as at 31 December 2008

Notes 31-Dec-08 31-Dec-07

£'000 £'000

Investments

Pooled investment vehicles 10, 11

918,082

1,250,248

Properties 12

6,450

6,000

AVC investments 13

49,193

50,296

973,725

1,306,544

Current assets 14

14,800

6,741

Current liabilities 15 (10,120) (4,798)

Net Current Assets

4,680

1,943

Net assets of the Plan at 31 December

978,405

1,308,487

The financial statements summarise the transactions of the Plan and deal with the net assets at the

disposal of the Trustee. They do not take account of obligations to pay pensions and benefits which

fall due after the end of the Plan year. The actuarial position of the Plan, which does take account of

such obligations, is dealt with in the Report of the Actuary included in the annual report on pages 10

to 14 and in the Report of the Trustee on page 3 and these financial statements should be read in

conjunction with them.

The financial statements on pages 17 to 27 were approved by the Trustee on……………………

2009 and are signed on their behalf by:

The Trustee: GM (U.K.) Pension Trustees Limited

Name:

Signature (Trustee Director):


19

Notes to the financial statements for the Year ended 31 December 2008

1. Basis of preparation

The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996, and in accordance with the Statement of Recommended Practice, “Financial Reports of Pension Schemes” revised May 2007 (the “revised SORP”). This is the first set of Plan financial statements that have adopted and presented under the revised SORP.

2. Accounting policies

Contributions

Normal contributions, both from the members and from the employer, are accounted for as they fall due under the schedule of contributions, the Plan rules and the recommendations of the actuary.

Employers’ augmentation contributions from the employer are accounted for in accordance with the agreement under which they are paid, or in the absence of such an agreement, when received.

Additional voluntary contributions from the members are accounted for in the month deducted from the payroll.

Employers’ deficit funding contributions are accounted for in accordance with the agreement under which they are being paid or, in the absence of an agreement, on a receipt basis.

Employers’ contributions in respect of Section 75 debts are accounted for in accordance with the

agreement. The debt has been recognised in full with provisions for the recoverability and time value of

money.

The presentation of the information on contributions in the prior year has been reclassified to be consistent with the current year and as required by the revised SORP. Total contributions are unchanged.

Benefits

Where members can choose whether to take their benefits as a full pension or as a lump sum with reduced pension, retirement benefits are accounted for on an accruals basis on the later of the date of retirement and the date the option is exercised.

Other benefits are accounted for on an accruals basis on the date of retirement, death or leaving the Plan as appropriate.

Transfers to and from other Plans

Transfer values represent the capital sums either receivable in respect of members from other pension plans or payable to the pension plans of new employers for members who have left the Plan. They are accounted for on a cash basis or where the Trustee has agreed to accept the liability in advance of receipt of funds on an accruals basis from the date of the agreement.

Group transfers, where the Trustee has agreed to accept the liability prior to the receipt, are accounted for in accordance with the agreement.

Investments

Investments in pooled unitised funds represent the Plan's share of the accumulated fund of the ten Pension Fund Pooling Vehicles (PFPV’s) and one Property Unit Trust (PUT), collectively known as The GM (UK) Common Investment Pool (CIP), calculated in accordance with the Trust Deed.

In accordance with the revised SORP, units held in the unitised funds are valued at bid net asset value. In the prior year they were valued at mid net asset value. The difference in valuation is immaterial to the financial statements and therefore comparatives have not been restated. As a result, the comparative figures for investments are reported on a mid net asset value basis. The adjustment in valuation from mid to bid in the prior year is included in current year change in market value.


20

Notes to the financial statements for the Year ended 31 December 2008 (cont’d)

Valuation of AVC’s with the Prudential Corporation is provided by Prudential and this includes the capital value of policies in payment, but excludes terminal bonuses. The unit linked AVC funds offered by Fidelity Pensions Management are Open Ended Investment Company (“OEIC”) funds and have a single price as valued by the investment manager.

Property

The property is independently, professionally valued on an annual basis at open market value by CB Richard Ellis, Chartered Surveyors. Rental income has been accounted for on an accruals basis.

Investment Income

Interest on cash deposits and other investment income have been accounted for on an accruals basis.

Administrative expenses

The administrative expenses of the Plan are paid by the Plan and accounted for on an accruals

basis.

Investment management expenses

Investment management fees are accounted for on an accruals basis. Acquisition costs are included

in the purchase cost of investments. Investment and other related expenses are paid by the

appropriate PFPV’s and are borne by the Plan in proportion to its share therein.


21


3. Contributions receivable

2008 2007

£’000 £’000

Participating companies

Normal

23,102

31,659

Deficit

6,000

6,000

Section 75 debt funding

9,400

-

Augmentations

3,371

5,393

PPF Levy

9,748

1,842

Members

Normal

9,197

9,045

Additional voluntary contributions

2,527

2,419

63,345

56,358

Deficit contributions are being made by the employer are being made for 12 years on the advice of the Plan’s actuary. Employers’ augmentations are paid in respect of certain benefits to individuals.

4. Transfers in

2008 2007

£’000 £’000

Transfers in from General Motors (UK) affiliated pension schemes

11

171

Individual transfers in from other schemes

380

338

391

509


22


5. Benefits payable

2008 2007

£’000 £’000

Pensions

59,633

57,644

Commutations and lump sum retirement benefits

5,200

4,465

Lump sum death benefits

134

596

64,967

62,705

6. Payments to and on account of leavers

2008 2007

£’000 £’000

Refunds to members leaving service

7

51

Payments for members joining state scheme

8 (3)

Individual transfers out to other schemes

2,012

2,261

2,027

2,309

7. Administrative expenses

2008 2007

£’000 £’000

General Motors UK Ltd administration charges

362

395

Other administration and processing charges

11

13

Actuarial fees

317

105

Audit fees

11

23

Legal and other professional fees

291

181

Pensions regulator /PPF levy

7,806

1,410

Miscellaneous expenses

5

12

8,803

2,139


23


8. Investment income

2008 2007

£’000 £’000

Net rents from properties

660

660

Interest on cash deposits

1

3

661

663

9. Investment management expenses

2008 2007

£’000 £’000

Investment management fees – Promark Investment Trustees Ltd. 445 474

Investment consultancy fees 7 7

Performance measurement fees 3 3

455 484


24


10. Investments

Investments in The GM (UK) Common Investment

Pool Value at 01.01.08

Purchases at cost

Sales Proceeds

Change in

Market Value

Value at 31.12.08

£’000 £’000 £’000 £’000 £’000

UK Equity PFPV

206,925 7,085 (4,332) (60,871)

148,807

International Equity PFPV

459,461 67,874 (833)

(193,943)

332,559

Emerging Market Equity PFPV

27,856 0 0 (8,504)

19,352

Index-Linked Bonds PFPV

64,431 283 (17,708) 1,482

48,488

International Bonds PFPV

250,284 155 (62,271) (5,135)

183,033

Property Unit Trust

166,264 0 (2,049) (43,466)

120,749

TAA PFPV

4,970 0 0 (2,730)

2,240

Cash PFPV

808 21,913 (20,821) 114

2,014

Alternative Investments PFPV

69,249 0 (2,201) (6,208)

60,840

Pooled investment vehicles

1,250,248 97,310

(110,215)

(319,261)

918,082

Property

6,000 0 0 450

6,450

AVC’s - Prudential

44,528 2,078 (3,750) 1,408

44,264

AVC’s - Fidelity

5,768 486 (125) (1,200)

4,929

NB: 2,564 in ‘AVC Investments’ above differs from that disclosed in note 3 due to timing differences with regard to

contribution payments. AVC purchases include normal contributions of £2,532,000 and transfers in of £32,000. All contributions were invested at year end.

The change in market value of investments during the year comprises all increases and decreases in the market value of investments held at any time during the year, including profits and losses realised on sales of investments during the year and investment income received and receivable. The adjustment in the cash PFPV, where the unit value remains constant, recognises the interest on cash deposits in the CIP, partially offset by payment of certain fees.

Promark Investment Trustees Limited (formerly named GM Investment Trustees Limited), the

operator of The GM (UK) Common Investment Pool, is registered in the UK.

Since the year end, the value of investments in the global market place has fluctuated considerably

due the current economic environment. This has also had a significant impact on the value of the

Plan’s investments in the CIP. Based on the latest available unaudited management data, as of 30

June 2009, the aggregate value of the Plan’s investment in the pooled investment vehicles was

approximately £929 million valued on a mid-price basis.


25

Notes to the financial statements for the year ended 31 December 2008 (cont’d)

11. Pooled investment vehicles

31-Dec-08 Units Bid Price Value

£ £

Investment in the PFPV’s/PUT comprising the CIP at market value

UK Equity PFPV

92,657,331

1.605998

148,807,489

International Equity PFPV

266,012,416

1.250166

332,559,677

Emerging Markets Equity PFPV

5,192,729

3.726697

19,351,727

Index-Linked Bonds PFPV

20,013,906

2.422698

48,487,650

International Bonds PFPV

82,835,986

2.209581

183,032,821

Property Unit Trust

43,016,113

2.807076

120,749,498

TAA PFPV

1,470,600

1.523287

2,240,145

Alternative Investments PFPV

65,533,357

0.928378

60,839,727

Cash PFPV

2,013,690

1.000000

2,013,690

918,082,425

The investment in the CIP represents the Plan’s share of each of the pooled funds within the CIP calculated in accordance with the provisions of the Trust Deed. In accordance with the revised SORP, units held in the unitised funds at 31 December 2008 are valued at bid net asset value.

At 31 December 2008 the Plan held 56.31% (2007: 57.26%) of the total aggregate investment in the CIP.

12. Properties

2008 2007

£’000 £’000

Technical Centre, Luton, UK

6,450 6,000

On 2 January 2007, the Trustee agreed a new 5 year lease with General Motors UK Limited (GM (UK)), of the building adjacent to Griffin House, Luton, Bedfordshire, known as the Technical Centre, occupied by GM (UK), based on an underlying value of £6 million. This lease, on a full insuring and repairing basis, was structured as a bond at an annual rent of £660,000.

This replaced the 15 year sublease agreed on 31 December 1991 when GM (UK) simultaneously sold the leasehold of the property for £5.79 million and entered into a leaseback transaction with the Trustee of the Plan. The Plan has an option to sell the property back to GM (UK) at the end of 2011 for £6 million. GM (UK) also has an option to buy the property back at a 7% premium on either 1

st

July 2009 or at expiry of the lease by giving six months notice. GM (UK) did not exercise this option on 1

st July 2009.


26


During the year ended 31 December 2008 rental income of £660,000 (2007: £660,000) was received

from GM (UK) (note 8). Rent is paid in June and December each year in arrears representing an

11% per annum return on the base price. The investment represents 0.6% (2007: 0.5%) of the total

Plan value at 31 December 2008. At 31 December 2008, the property was independently valued by

CB Richard Ellis at £6.45 million.

13. AVC investments

The Trustee holds assets invested separately from the main fund in the form of insurance policies from Prudential Corporation or unit linked funds from Fidelity Pensions Management, securing additional benefits on a money purchase basis for those members electing to pay additional voluntary contributions. Members participating in this arrangement each receive an annual statement made up to 31 December confirming the amounts held to their account and the movements in the year.

The aggregate amount of AVC investment is as follows:

2008 2007

£’000 £’000

Prudential Corporation

44,264

44,528

Fidelity Pensions Management

4,929

5,768

49,193

50,296

14. Current assets

2008 2007

£’000 £’000

Contributions receivable –employers

13,119

5,172

Contributions receivable –employees

637

615

AVC contributions receivable

-

5

Accrued receivables – lump sums

372

640

Accrued receivables – other

40

40

Transfers receivable

-

94

Prepaid expense – Pension regulator/PPF levies

-

7

Cash balances

632

168

14,800

6,741

All contributions due to the Plan relate to the month of December 2008 and were paid in full to the Plan within the timescale required by the Schedule of Contributions currently in force.


27


15. Current liabilities

2008 2007

£’000 £’000

Pensions and PAYE payable (607) (598)

Lump sums payable (1,350) (1,792)

Death benefits payable (44) (11)

Refund of contributions payable 0 (2)

AVC benefits payable 0 (640)

Payable re Members joining State Scheme (4) (16)

VAT payable (49) (58)

Accrued expenses (8,066) (1,681)

(10,120) (4,798)

16. Related party transactions

All pensions administration cost is incurred by General Motors UK Limited and then recharged to

the Plan. Costs include salaries and benefits of the Pension Administration department, including

external systems support, allocated costs for office space and overheads, and direct costs of IT

equipment, general office systems software and specific mainframe computer database and

pension payroll systems. Total cost for 2008 was £362,000 (2007: £395,000) (note 7) and of this

£34,000 (2007: £45,000) was outstanding at year end and included in current liabilities.

All internal investment costs are incurred by Promark Investment Trustees Limited (PITL) and

recharged to the Plan. Costs include the allocated share of salaries and benefits of the Pension

Investment department including costs for office space and overheads, and direct costs of IT

equipment, general office systems software. PITL also incurs costs relating to Investment

consultancy, rental of Bloomberg screens, investment accounting and performance measurement

for the Plan. Total cost for 2008 was £445,000 (2007: £474,000) (note 9) and of this £61,000

(2007: £102,000) was outstanding at year end and included in current liabilities.

External investment management charges, including custody, investment accounting and

performance measurement are all allocated to the pooled funds within the CIP.


28

Independent Auditors’ Statement about Contributions to the Trustee of The Vauxhall Motors Limited Pension Plan

We have examined the Summary of Contributions to The Vauxhall Motors Limited Pension Plan for the year ended 31 December 2008 which is set out on the following page.

Respective responsibilities of Trustee and Auditors

The Trustee’s responsibilities for ensuring that there is prepared, maintained and from time to time revised a schedule of contributions are set out in the statement of Trustee’s responsibilities. Our responsibility is to provide a statement about contributions to the Plan in accordance with relevant legislation and to report our opinion to you. This report, including the statement about contributions, has been prepared for and only for the Plan’s Trustee as a body in accordance with Section 41 of the Pensions Act 1995 and for no other purpose. We do not, in giving this statement, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Basis of statement about contributions

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that contributions reported in the Summary of Contributions have been paid in accordance with the relevant requirements. For this purpose the work that we carried out included examination, on a test basis, of evidence relevant to the amounts of contributions payable to the Plan and the timing of those payments under the schedule of contributions. Our statement about contributions is required to refer to those breaches of the schedule of contributions which we consider to be material for this statement and which come to our attention in the course of our work.

Statement about contributions to the Plan

In our opinion, the contributions payable to the Plan required by the schedule of contributions during the year ended 31 December 2008 as reported in the Summary of Contributions on the following page have in all material respects been paid in accordance with the schedule of contributions certified by the Actuary on 22 December 2006 and 20 August 2008. PricewaterhouseCoopers LLP Chartered Accountants and Registered Auditors London

………………………………………. 2009


29

Summary of Contributions Payable in the Year

During the year ended 31 December 2008, the contributions payable to the Plan by the Employer and Employee were as follows:

Summary of Contributions Payable in the year

Employee Employer

£’000 £’000

Required by the schedule of contributions

Normal contributions

9,197

23,102

Additional contributions

-

6,000

Section 75 debt funding

-

9,400

Augmentations

-

3,371

Total

9,197

41,873

Other contributions payable

PPF Levy contribution

-

9,748

AVCs

2,527

-

Total (as per Fund Account)

11,724

51,621

Signed on behalf of the Trustee: (GM (U.K.) Pension Trustees Limited) Name: Signature (Trustee Director): ……………………………………….. 2009


30

Members’ Information

Pensions Tracing Service

Contact details for the Pensions Tracing Service, which can help members trace an old pension

scheme that they have lost contact with, are:

Pensions Tracing Service, Tyneview Park, Whitley Road, Newcastle, NE98 1BA

Telephone: 0845 600 2537

The Pensions Advisory Service

Any concern connected with the Plan should be referred to Mr D Mount, Pensions Administration

Manager, who will try to resolve the problem as quickly as possible. Members and beneficiaries of

occupational pension Schemes who have problems concerning their Scheme which are not

satisfied by the information or explanation given by the administrators or the Trustees can consult

with the Pensions Advisory Service (TPAS). A local TPAS adviser can usually be contacted

through a Citizen's Advice Bureau. Alternatively TPAS can be contacted at:

11 Belgrave Road, London SW1V 1RB

Telephone: 0845 601 2923

Pensions Ombudsman

In cases where a complaint or dispute cannot be resolved, normally after the intervention of

TPAS, an application can be made to the Pensions Ombudsman for him to investigate and

determine any complaint or dispute of fact or law involving occupational pension schemes. The

address is:

11 Belgrave Road, London SW1V 1RB

Telephone: 020 7834 9144.

THE VAUXHALL MOTORS LIMITED PENSION PLAN · 1 The Vauxhall Motors Limited Pension Plan TRUSTEE AND...

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Transcript of THE VAUXHALL MOTORS LIMITED PENSION PLAN · 1 The Vauxhall Motors Limited Pension Plan TRUSTEE AND...