Latest news with #HewlettPackard
Yahoo
11 hours ago
- Business
- Yahoo
The little-known 'pension scandal' that has been going on for 30 years
What would you do if your wage hadn't increased since 1997? Hundreds of thousands of pensioners across the UK are facing a similar problem. They have been fighting for nearly 30 years to have their pension savings increased in line with inflation - which their ex-employers are not legally required to do. In the last year, Patricia Kennedy and her fellow campaigners have written to 195 MPs, hoping to finally end their 30-year battle for what they claim to be a pension scandal. Kennedy is part of the HPPA & Alliance Pension Justice campaign, representing thousands of pensioners in their seventies and eighties who worked for companies owned by the Hewlett Packard Enterprise and have not seen their pension increase since 1997. Estimates place the number of people directly affected by the indexation at between 500,000 and 800,000 pensioners, but Kennedy thinks the figure could be even higher. 'We believe that there are between 750,000 and 1.8m pensioners in the UK whose pension values have significantly eroded and face an increasingly bleak future of zero increases," Kennedy, a former manager at Hewlett Packard Enterprise in Scotland and campaigner from the group, told Yahoo News. It has been close to 30 years since the group first received notice that their pension funds would plummet, but Kennedy is still dogged in her determination, writing to over 100 MPs this year alone and meeting with pensions minister Torsten Bell to move the group's case forward. For a number of workers she represents, the average annual pension for a UK retiree from this time is approximately £9,700. Meanwhile, the profits at her former company stood at $500m in 2024. Kennedy said: 'It's given that it was mandated by our employers at the time that we or I as an employee must contribute to the pension fund. 'Is it not reasonable that I or pensioners should also have the statutory right to share in the distribution of any surplus almost three decades later. 'It's been like a forced loan. They've had our money for all of this time and we have never been able to share in any yield.' What is happened pre-1997 pensions? Before 1997, there was no legal requirement in the UK for defined benefit (DB) occupational pension schemes to increase pensions in payment each year in line with inflation. After the brazen theft of pension fund assets by media tycoon Robert Maxwell in the late 1980s and early 1990s, the government introduced The Pensions Act 1995, with the aim of protecting pension savers. But as the scheme only protected mandated statutory indexation of pensions from April 1997 onward, increasing pensions earlier than this date was at the discretion of a savers' employer. While many employers opted to increase pensions pre-1997 inline with inflation, a significant number didn't – and still haven't to this day. Anyone drawing a defined benefit pension since before 1997 is likely at least 70, and often considerably older, especially given the rapid closures to new entrants and accrual since the mid-2000s. By doing some quick maths, it's worth noting that someone aged 55 in 1997 is now 83 in 2025. It also means that for many workers affected, their average pension is now worth just £9,700. 'It's very distressing' Caroline Emery joined the team at American Express in 1985. Emery won multiple awards during her time at the organisation, becoming a VP in marketing for the company before she moved to new pastures in 2012. Now, she is working alongside former colleagues under the name Amex UK Pensioners Justice. The campaign group estimates 5000 Amex employees are affected by the pre-1997 indexation. Emery told Yahoo News: 'American Express has not provided discretionary increases for over 11 years. When I began my pension, there was a documented pattern of such increases until 2014. However, following that, all increases stopped altogether. "The lack of clear communication regarding the cessation of discretionary increases from 2015 has contributed to pensioners confusion and financial distress surrounding their pension entitlements.' While Emery's pension is divided over a number of pots, she is one of the lucky ones. She told Yahoo News: 'It's very distressing when you hear about the dire straits some of these people are now in financially. 'One man we have supported, who lives in Brighton, posted on the group asking if people could donate so he could afford to buy himself a mobility scooter. 'We were all more than happy to contribute, but he was promised a secure pension. He shouldn't be in a position where he's had to ask for that.' 'It's been like a forced loan' There is no precise, published figure for the exact number of companies which have opted not to increase pre-1997 pensions in line with inflation, but available evidence shows that the problem is widespread across the UK corporate sector, involving dozens – if not hundreds – of medium and large employers. According to the latest data and parliamentary reports, two-thirds of DB schemes are permitted by their rules to provide discretionary benefit increases for pre-1997 service. Of these, just under a third – 32% – have provided an increase in the past three years, and just 15% of those increases applied to pre-1997 benefits. A lack of understanding of the UK pensions system could also put these workers at predominantly American companies at a disadvantage. "The American pensions system is very different to ours," Emery said. "There's this idea that if the company doesn't pay to top up the pensions, the pension is just going to get paid by the state." High hopes Campaigners like Kennedy and Emery had high hopes for this year's Pension Schemes Bill. After meeting with pensions minister Torsten Bell in March, the group were told 'we have not forgotten you, and your situation is very much being discussed at the highest levels.' But when the Pension Schemes Bill was first submitted to parliament, this issue had not made the bill – and if anything, the campaigners believe the legislation could make things worse. Schemes with substantial surpluses may now see it as easier to return funds to sponsoring employers rather than address the long-standing claimed unfairness affecting older pensioners. Kennedy told Yahoo News: 'The new legislation does not give us the power or there is no requirement to share any of the surplus with us. 'There is simply no requirement to share it with the people whose money it was.' The government has launched a new Pensions Commission on 21 July, but there is no explicit mention that it will specifically examine the issue of pre-1997 indexation for defined benefit pensions. While the government may be burying its head in the sand, just last week, the work and pensions committee issued a stark warning that pensioners are dying in poverty and without justice. Speaking to Liz Kendall on 16 July, the group grilled the secretary of state on the government's delay in rolling out compensation. While Kendall insisted the pensions minister was working to identify the pensioners, she also added compensating those affected 'would have wider implications for the public finances'. 'How can we justify this to them? They're in their late 70s and 80s now,' committee chair Debbie Abrahams said. 'They are dying by the day. The decency of humanity means we need to stand by them. 'It will cost the government £133m over the next ten years, against £14bn in reserves to fulfil the role of the pension protection fund. I'll just leave it at that.' An Amex spokesperson told Yahoo News: "American Express fully complies with all its pension obligations to current and former colleagues and will continue to do so in the future. The Company annually reviews whether a discretionary increase will be awarded in respect of pre-1997 defined benefit pensions." A HPE spokesperson told Yahoo News: 'HPE is committed to satisfying all of its responsibilities to both current and former team members. The decision on whether to grant discretionary increases to relevant pensioners is given careful consideration and is made based on a number of factors. It is reviewed on an annual basis.' A DWP spokesperson said: 'We understand the impact this is having on members of these schemes, which is why we are continuing to work to find a solution. 'Any changes in this area would have significant implications on public finances, which is why we need to consider it thoroughly.'
Telegraph
13 hours ago
- Business
- Telegraph
How Mike Lynch shielded his family fortune from £700m fraud ruling
After winning his freedom last year, Mike Lynch was relaxed about the prospect that he might become personally penniless. The British software tycoon had faced the prospect of decades in prison before he defeated criminal fraud charges in a San Francisco trial, and described winning the case as being granted a 'second life'. The prospect of signing his wealth away to Hewlett-Packard (HP), the tech giant that was pursuing him for billions in the English courts, paled in comparison to ending his life behind bars. But Lynch was breezy about the prospect for another reason: a large portion of the Lynch family fortune was held in his wife Angela Bacares's name, shielding it from any legal repercussions. 'My wife has been very good at investing in the things that I've told her to from a point of view of technology. We've done very well,' Lynch said in an interview after he was acquitted. 'It's not a perilous situation.' Just a few weeks later, Lynch and his daughter Hannah died when the entrepreneur's superyacht, Bayesian, capsized off the coast of Sicily, a tragedy that Bacares herself survived. But the decision for Bacares to hold much of the wealth in her name now looks like a wise move. On Tuesday, a judge ruled that HP was owed almost £740m from Lynch and his business partner Sushovan Hussain over the fraudulent sale of their software giant Autonomy 14 years ago. With Mr Hussain having settled privately, Lynch's estate is on the hook for the majority of the damages. Valued by lawyers at $450m (£333m) during his US trial, the fortune in Lynch's estate would be wiped out by the judgment. An appeal by Lynch's legal team is likely. But even if the estate is bankrupted, Bacares is sitting on a fortune worth hundreds of millions owing to the way the pair divided the proceeds of Lynch's endeavours. American-born Bacares, 58, worked on Wall Street and the City of London before her and Lynch were engaged in 2001 and married the following year. She has not made any public comments since her husband's death, beyond a brief message from the Lynch family stating they are 'devastated'. But her name has featured regularly in stock market filings, company records and court documents. While Lynch made around £500m from selling Autonomy, Bacares, who was occasionally an employee at the company, sold £15.6m of shares. By the time Lynch's next venture, cybersecurity company Darktrace, made it to the public markets, Ms Bacares was the dominant shareholder. She owned 12.8pc of the company at the time of its London flotation, compared to a 4.9pc stake owned by Lynch. Bacares and Lynch had both sold the majority of their stakes by the time Darktrace was bought by private equity firm Thoma Bravo for $5.3bn last year – netting hundreds of millions of pounds. She is also one of the biggest shareholders in Luminance, a legal AI company backed by Lynch's venture capital firm, that has raised more than $115m. Company filings also show her listed as a director at Bunhill Partners, a now defunct algorithmic trading. The couple's personal assets were also held in her name, including Loudham Hall, the Suffolk estate where they lived, and Bayesian itself. The superyacht, raised only last month, was owned by Revtom Limited, of which Bacares was the only shareholder. This may now present its own legal complications. Families of those who perished on Bayesian, including cook Recaldo Thomas and Lynch's lawyer, Chris Morvillo, are seeking compensation from the insurance company that covered the vessel. Hewlett-Packard, now known as HPE, could also theoretically pursue Bacares if there is a shortfall from the fraud case, although the optics of going after his widow would be questionable. Even if Lynch's estate is wiped out, his family are likely to be well looked after.
The Hindu
17 hours ago
- Business
- The Hindu
UK court awards £700 million to HP in late tycoon's fraud case
A UK court Tuesday awarded £700 million ($946 million) compensation to IT firm Hewlett Packard in a fraud case involving late British tech tycoon Mike Lynch, killed last year when his superyacht sank off Sicily. A UK court ruled in 2022 in favour of the U.S. technology giant, now known as Hewlett Packard Enterprise (HPE), in a civil case linked to the sale of Lynch's company, Autonomy. Lynch, once dubbed the "British Bill Gates", founded software firm Autonomy in the 1990s. Its $11 billion sale to Hewlett Packard in 2011 also saw him face fraud charges in the United States. HP accused Autonomy of artificially inflating its revenues and growth before the sale and had demanded $5 billion in compensation. "We are pleased that this decision brings us a step closer to the resolution of this dispute," said a spokesperson for Hewlett Packard. "We look forward to the further hearing at which the final amount of HPE's damages will be determined," they added. The further hearing, dealing with matters including interest, currency conversion and whether Lynch's estate can appeal the decision, is scheduled for November. The British court had not yet awarded damages when Lynch was killed along with his 18-year-old daughter Hannah, four friends and the yacht's cook in the sinking of his British-flagged vessel Bayesian in a storm in August 2024. Lynch, 59, his family and guests were on board celebrating his acquittal in the massive U.S. fraud case. The 56-metre (185-foot) yacht was struck by a mini-tornado before dawn as it was anchored off Porticello, near Palermo. Hewlett Packard had recorded nearly $9 billion in write-downs, including more than $5 billion it claimed resulted from accounting manipulations by Autonomy's directors before the sale. But justice Robert Hildyard in the British case wrote in his ruling that "HP's claim was always substantially exaggerated". The initial compensation award had been expected in September 2024, and before his sudden death Lynch had prepared a written reaction to the judgement. The ruling "exposes HP's failure and makes clear that the immense damage to Autonomy was down to HP's own errors and actions", he wrote, adding that the company would consider appealing the decision. A spokesman told AFP any debts would have to be discharged from Lynch's estate.
Business Recorder
21 hours ago
- Business
- Business Recorder
UK court awards £700m to HP in late tycoon's fraud case
LONDON: A UK court Tuesday awarded £700 million ($946 million) compensation to IT firm Hewlett Packard in a fraud case involving late British tech tycoon Mike Lynch, killed last year when his superyacht sank off Sicily. A UK court ruled in 2022 in favour of the US technology giant, now known as HPE, in a civil case linked to the sale of Lynch's company, Autonomy. Lynch, once dubbed the 'British Bill Gates', founded software firm Autonomy in the 1990s. Its $11 billion sale to Hewlett Packard in 2011 also saw him face fraud charges in the United States. HP accused Autonomy of artificially inflating its revenues and growth before the sale. Hewlett Packard had demanded $5 billion in compensation. The company did not reply to an AFP request for comment. The British court had not yet awarded damages when Lynch was killed along with his 18-year-old daughter Hannah, four friends and the yacht's cook in the sinking of his British-flagged vessel Bayesian in a storm in August 2024. Lynch, 59, his family and guests were on board celebrating his acquittal in the massive US fraud case. The 56-metre (185-foot) yacht was struck by a mini-tornado before dawn as it was anchored off Porticello, near Palermo. Hewlett Packard had recorded nearly $9 billion in write-downs, including more than $5 billion it claimed resulted from accounting manipulations by Autonomy's directors before the sale. But justice Robert Hildyard in the British case wrote in his ruling that 'HP's claim was always substantially exaggerated'. The initial compensation award had been expected in September 2024, and before his sudden death Lynch had prepared a written reaction to the judgement.
France 24
a day ago
- Business
- France 24
UK court awards £700 mn to HP in late tycoon's fraud case
A UK court ruled in 2022 in favour of the US technology giant, now known as Hewlett Packard Enterprise (HPE), in a civil case linked to the sale of Lynch's company, Autonomy. Lynch, once dubbed the "British Bill Gates", founded software firm Autonomy in the 1990s. Its $11 billion sale to Hewlett Packard in 2011 also saw him face fraud charges in the United States. HP accused Autonomy of artificially inflating its revenues and growth before the sale and had demanded $5 billion in compensation. "We are pleased that this decision brings us a step closer to the resolution of this dispute," said a spokesperson for Hewlett Packard. "We look forward to the further hearing at which the final amount of HPE's damages will be determined," they added. The further hearing, dealing with matters including interest, currency conversion and whether Lynch's estate can appeal the decision, is scheduled for November. The British court had not yet awarded damages when Lynch was killed along with his 18-year-old daughter Hannah, four friends and the yacht's cook in the sinking of his British-flagged vessel Bayesian in a storm in August 2024. Lynch, 59, his family and guests were on board celebrating his acquittal in the massive US fraud case. The 56-metre (185-foot) yacht was struck by a mini-tornado before dawn as it was anchored off Porticello, near Palermo. Hewlett Packard had recorded nearly $9 billion in write-downs, including more than $5 billion it claimed resulted from accounting manipulations by Autonomy's directors before the sale. But justice Robert Hildyard in the British case wrote in his ruling that "HP's claim was always substantially exaggerated". The initial compensation award had been expected in September 2024, and before his sudden death Lynch had prepared a written reaction to the judgement. The ruling "exposes HP's failure and makes clear that the immense damage to Autonomy was down to HP's own errors and actions", he wrote, adding that the company would consider appealing the decision.
