Former DEC employees to rally against stagnant pensions post-HP

What do we want? Discretionary increases. When do we want them? Since 2002

Retired Digital Equipment Corporation employees are scheduling a protest day outside of Hewlett Packard Enterprise’s UK headquarters over its refusal to increase their pensions – something the corporation is not legally obliged to do.

DEC – once an employer of 8,500 people in Britain – was bought by Compaq in 1998, which was itself swallowed by HP in 2002. Reg readers will no doubt remember that HP subsequently split into two legal entities, HP Inc and HPE, with the latter assuming responsibility for DEC's existing and future pensioners.

The bone of contention is DEC pensioners in the pre-1997 service indexation are not covered by current government legislation – previously there was no general obligation on Defined Benefits scheme to up pensions in payment. That required was introduced in 1997.

Jenni McCartney, who worked at DEC in the 1980s and 90s, said on a Facebook group for company alumni that HPE have a choice whether to increase the pension payment. "In the last 20 years inflation has been 70 percent and the company have only agreed to pay increases twice, totalling 5 percent.”

She admitted HPE is complying with the letter of the law, but added: "This is true but is it fair?"

McCartney, part of the Hewlett Packard Pension Association (HPPA) steering group – created to open communication channels between the thousands of pension plan members, trustees and HPE – encouraged "current or future pensioners”" to join the protest on September 20 outside HPE's Winnersh office, near Reading in the UK.

The plan is to "raise the public profile of the hardship that affects many of us," and she urged more to join the protest.

Max Rasool, who worked in systems administration at DEC, and held various roles at Compaq and HP from 2001 until 2008, urged more to sign up. He said: "@everyone this affects your future and needs your attention."

Another member of the DEC Facebook group, Lawrence Hughes, said he'd transferred his pension into a European fund as he lives in Germany these days. "I am really upset with how HP is acting. The pension department.

"All the years of hard graft and many hours of goodwill time to make Digital a successful company and it has come down to this. People having to protest for a fair pension. I wish everyone a very successful day. Good luck," he added.

The HPPA made a complaint about the pension situation to the Pension's Ombudsman in 2014, but the complaint was not upheld "because the provision of discretionary increases in excess of 0% was never an established custom. Accordingly, the Trustees were under no obligation to protect it in the Merger Deed."

According to written evidence [PDF] submitted to Parliament in 2016 by the HPPA, the company pensions were virtually frozen since HP bought DEC.

“DEC paid indexation to its pensioners on a discretionary basis according to affordability. Compaq acquired Digital in 1998 and continued to pay discretionary increases to pensioners, with an undertaking to continue doing so subject to affordability.

“Hewlett-Packard acquired Compaq in 2002 and assumed responsibility for the Digital pensioners but has dishonoured this undertaking except for two token 1 percent rises and has not been paying indexation for cost of living increases to ex Digital pensioners," it wrote.

One ex-DECer told us: "Clearly we can't strike, but we plan to show the uncaring face of HPE."

In April, the HPPA submitted another document to Parliament in which it pointed to PPF Purple Book's 2022 stats that more than three quarters of Defined Benefit pension schemes in Britain provide “various forms of inflation indexation to pensions in payment for service accrued before 6th April 1997.”

Across the UK, the trade body said its analysis suggested more generally “there could be as many as 500,000 pensioners who have not received discretionary increases over many years”.

A spokesperson at HPE sent a statement to The Reg: "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." ®

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