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Railway Pension Scheme (ATOS Section)

19 May 2015

Members of the Atos Section of the Railways Pension Scheme will have received a letter last week regarding proposed future changes. TSSA officials and staff reps took part in a conference call with the company on Thursday to seek clarification on issues and set out concerns raised by members. Representing the company on the call were the ATOS Pensions Director, HR and representatives from KPMG (pension advisors to ATOS).

 

Non Protected Staff

The proposals set out in the letters directly affect non protected staff by ending the accrual of future benefits from the current defined benefits scheme, and moving those staff into a separate defined contribution scheme with inferior benefits. All existing benefits previously built up within the ATOS Section of the Railways Pension Scheme will remain. ATOS claim their actions are due to rising costs and fears of more cost increases in the future. However TSSA argue that these costs could be offset by other less drastic changes to the scheme and furthermore believe that this excuse is a vehicle to divest ATOS of another final salary pension scheme. This is unfairly detrimental to the members who have invested in the scheme and have devised life plans based on what they believed they would receive on retirement. We pressed for more details on the timetable for changes to non protected members. In the current proposals, consultation ends on the 10th July with implementation on the 1st August. However as this will involve a rule change rather than a change to the terms and conditions of members it will need to approved by the Trustees so it is more than likely that these dates will slide. We raised further concerns that under these restrictive timescales there does not appear to be enough time for those individuals affected to make complex decisions and important potentially life changing plans.

Protected staff

Those within the scheme who are protected also received a letter last week informing them of the changes. Although they do not face direct changes, there will be a significant knock on affect to their pensions and potentially membership within the scheme. As outlined in the letter one of the consequences is likely to be a dramatic increase in contribution rates. We enquired about consultation for protected members, at the moment there is no firm timetable but it is anticipated that they will receive a further letter in August which will be followed by formal consultation.

ATOS argued that as well as their concerns of current and future cost increases, the proposed changes were in line with their global policy on pension schemes. TSSA believe that this is part of a very deliberate strategy to directly remove members from a scheme which could still have a healthy future and panic the remaining members to leave the scheme under pressure. Based on the direct feedback we have received from members, many loyal and longstanding staff now feel very let down by the actions of ATOS.

Valuation

It was noted that finalisation of the valuation had been delayed for a long period and an explanation of the reasons behind this was sought. ATOS stated that the delay was due to lengthy discussions regarding the covenant rating which unfortunately has been downgraded to 4 from the previous assessment of 3. The covenant rating is based upon an assessment of future risk factors for the scheme; the knock on effect of a higher covenant rating is to further increase the deficit of the scheme. Downgrading should not panic members, although unfortunate it is in line with the condition of many similar schemes and is still a long way from the bottom rating of 6. It was evident that ATOS were disappointed with this rating and the length of time in the submission of the valuation was due to their appeals against downgrading. TSSA enquired whether a parent company guarantee from the group had been looked at, as this potentially could improve the covenant rating. This has been broached with Paris, but rejected.

Worldine / Atos Split

The subject of whether the Worldline and ATOS split created the shortfall and costs increase was discussed. The company accepted this has caused theATOS Section to deteriorate but have said this is not the only reason. They estimate thatif the split had not taken place it would still be facing contribution rates as high as 45% and the covenant rating would still be 4.

Alternative Strategies

We asked ATOS if they had looked at other alternatives to funding the shortfall. They have examined potential changes to benefits e.g. retirement age and accrual rates but this made no significant material difference and they believe would only peripherally impact on rectifying the deficit. The regulator would not allow any extension of the recovery period beyond 10 years. Suggestions of a cash injection or placing affected members into alternatives similar schemes or the omnibus scheme were both rejected by the company.

Mitigation

TSSA asked what plans were in place to mitigate the impact of the changes on affected members; this was answered in a non-committal manner. They claimed that closing the scheme would not release much savings as they still had existing liabilities and contributions into new scheme. However this will be looked at again as the consultation progresses.

 

What Should I Do?

Affected members should consult both RPMI and an independent financial advisor. Members seeking independent financial advice may choose to use Keystone Financial which the union recommends for specialist pension advice and financial planning, their contact details are:

www.keystonefinancial.co.uk

Martin Teal: 07974923554

m.teal@keystonefinancial.co.uk

If there are members of the scheme who were planning to retire and leave their employment with ATOS in the upcoming months, they should directly approach Margaret Kaleher ATOS Pension Director regarding expected notice periods.

Next Steps

The company have agreed to a further meeting towards the end of June. In the meantime they will be producing detailed FAQ’s to deal with many of the common queries that are arising, these will alsobe shared with protected members. There will be conference calls for non-protected members but no site visits or face to face discussions. These were requested as more appropriate for the complex issues involved, but due to the travel ban ATOS believe this is unlikely.

Enquires were made regarding the ability of HR support to deal with specific terms & conditions queries relating to ex-railway staff. Assurances were given of their ability to deal with this. Furthermore we raised members concerns of the 14 day turnaround on queries which is part of the response from the Pensions Enquiry Point. ATOS stated that they endeavoured to respond quicker but were trying to manage realistic expectations.

I will keep you updated of future developments as the consultation progresses, in the meantime if you have specific issues please contact the TSSA helpdesk on 0800 328 2673 or helpdesk@tssa.org.uk

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