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Railway Pension Scheme Update

14 October 2011

TSSA Pensions Champions and National Representatives met this Thursday to debate proposals for eliminating the Railway Pension Scheme (RPS) deficit.

 his followed the first two meetings of the Network Rail Pensions Forum (see last circular: http://www.tssa.org.uk/en/Your-union/Your-company/company-pages/network-rail/index.cfm/network-rail-talks-begin-on-rps-valuation), and will feed into discussions at the next forum meeting on Monday 17 October.

We had anticipated an agreement from the company to release all Area Council Reps, however this was restricted to pensions champions and National Reps (TSSA Maintenance Co-ordinators, National Operations Council and National Management Council reps).

Secure Benefits, Affordable Contributions

After beginning with a comprehensive overview of the situation and presentation of the options discussed so far by Assistant General Secretary, Manuel Cortes, a lively discussion considered each of the options in turn and ended with a broad consensus of opinion on the best way forward for TSSA members as follows:

·         Maintain current level of benefits for members - to keep the RPS as a final salary pension scheme.

·         No increase in RPS normal retirement age – to remain at 60 years.

·         Address the deficit within 15 rather than 10 years  - lowering the 2012 – 2018 member contribution rate from the company’s proposed 13.08% to 12.44%, and July 2018 – June 2027 to 11.80, rather than 12.44% from July 2018 to June 2022.

·         The company’s proposed “RPS2” scheme to be open from day 1 – rather than the current 5 year wait to join RPS. This should be the company’s default pension scheme for new members, winding up CARE and the Defined Contribution schemes. The option should remain for members to transfer to RPS after 5 years, and at other points in future.

·         Lower the cap on pensionable pay - from £129,600 to £100,000.

What Would RPS2 Look Like?

·         Voluntary for RPS members, applies to all non-protected new starters.

·         Same “pot” as RPS.

·         “Stepped” scheme (not final salary or career average, takes career into account with years spent in each role and shifts balance or cost/benefit in favour of lower paid).

·         SMART contributions – approx. 11.6% (8.8% future + 2.8% deficit).

The reps in attendance at the meeting shared a view that the RPS2 would provide a better pension than either the current CARE or Defined Contribution schemes for many of our members.

What’s Next?

This position will be taken to the 17 October Pensions Forum meeting for discussion with the company, RMT and Unite. We will update members on the outcome of that meeting in due course, along with any further action. In the meantime, speak to your rep and let them know your views.

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