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Hands off our Pensions!

20 January 2015

TSSA Area Council Reps and Pensions Champions met on 19 January to respond to company proposals to attack your pensions

Download our circular here:    Hands off our Pensions!

(see link for details of the company proposals: http://bit.ly/NRRPS2015Prop1)

Your reps unanimously agreed to:

  • Reject the proposals
  • Demand another meeting with the company for further discussion
  • Conduct a ballot of all Network Rail TSSA members if the company refuse

As you can see, the plans start by reducing company contributions to the Railways Pension Scheme (RPS), before attacking the CARE scheme, then threaten to come back for another swipe at RPS members in a couple of years if they get away with cuts this year.

NR Section RPS fully funded!

Network Rail are seeking to reduce your pension benefits by up to 18% by cutting the amount of money you and they contribute in deferred wages. The company are attempting to force through these cuts as part of the 2013 valuation discussions, despite the section being FULLY FUNDED! Changes to national insurance and pensions legislation not due to come in until April 2016 are being used as an excuse for NR to claw an estimated £27m per year from your pension funds to supplement their profits!

Cutting deferred wages by over 2%!

NR’s proposal letter details reductions in member contributions. What they fail to state is that for every pound you put in to your pension, they put in £1.50. For every pound you don’t contribute they avoid paying you £1.50 in deferred wages. For many, this equates to a pay cut of over 2% of annual salary!

 

Current NR contribution (%)

Proposed NR Contribution (%)

Saving per person per year (%)

Protected

14.04

13.2

0.84

RPS60

14.04

12

2.04

RPS65

10

9.78

0.22

 

 

 

 

 

 

 

 The valuation

Every three years, representatives from your union meet with Network Rail to discuss the health of the NR section of the Railways Pension Scheme (RPS). Actuaries complete a “valuation” of the scheme, estimating whether it will be able to pay out the full pension of every member when they retire. This is based on a wide range of assumptions made at the point of the valuation, including members’ life expectancy, projected returns on investments and inflation over the next forty years. The last valuation, in 2010, identified a deficit of nearly 3%, owing largely to increased life expectancy and the financial crash. Capping pensionable pay rises at RPI + 0.5%, while opposed by TSSA, satisfied the legal requirement to recover any deficit in the scheme’s future costs (pensions) against contributions. In the current, 2013, valuation, there is no deficit, so no recovery plan is needed.

Making you pay three times over!

The company want to reduce their contributions to your pension and lower your benefits at the same time as offering four years of pay cuts to most staff (http://bit.ly/NRNoCutsNews).

· Because the Government refused to grant the CP5 funding bid in full, NR want to cut members’ pay and pension rather than go cap in hand to their new bosses in the Department.

· Because the Government wish to increase National Insurance contributions made by you and your employer from 2016, NR plan to raid your pension to find the £27m that this will cost them rather than find it from elsewhere - small change for the company, huge cuts to the value of your pension!

The cumulative impact on your pension

Taking the example of a member with a salary of £30,000 today who retires with full pensionable service in 10, 20, 30 or 40 years from now, if average RPI is 2.5% and pay increases are RPI + 0.5% each year, you can see the impact an RPI cap would have below, compared to the current arrangements:

Retirement year

Monthly pension if RPI + 0.5% cap (£)

Monthly pension if RPI cap (£)

Difference in monthly pension (£)

Difference in monthly pension (%)

2024

2217.46

2112.14

105

4.75

2034

2980.08

2703.72

276

9.27

2044

4004.98

3460.99

544

13.58

2054

5382.36

4430.36

952

17.69

The right hand column demonstrates that a reduction of 0.5% per year would have a compounding effect on pensions for every year you work, up to nearly 18% for an employee who joined the scheme in 2014 and works for the next 40 years!

Help spread the message and get ready to fight!

  • Check your details are up to date at www.tssa.org.uk/mytssa. Take a couple of minutes to ensure that if we need to ballot you have a say
  • Visit www.tssa.org.uk/join, where you can find simple reasons to help encourage your colleagues to join your union online
  • Download a nomination form at http://bit.ly/Nom-Penschamp or contact the Helpdesk if you’re interested in becoming a Pensions Champion
  • Share this circular with your colleagues, make sure there’s a copy on your noticeboard!
  • Share your views with your rep
  • Look out for details of further developments and meetings in your area
  • See http://bit.ly/NRNoCutsNews for details of our position on the Bands 5-8 and equivalent and Controller pay talks

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