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Amey: RPS Pensions

20 November 2014

Update for members on Railway Pensions Scheme consultations (RPS)

 

Final Offer

Further to our last circular on Pensions there have been further talks with the company on their pension’s proposals. Unfortunately they were unwilling to consider further our proposal of a cap that was Consumer prices index (CPI) or 2% whichever was greater and still retain the caveats which we previously secured.

However during the talks Amey were prepared to increase their cap of Retail Prices Index (RPI) up to 2% to 2.25%, TSSA sought to increase the minimum amount of the cap from 0% to something like 1.75% there by having a Cap that was based on RPI but within a range of 1.75% and 2.25% but unfortunately the company was not prepared to consider this and would only consider a range of 1.85% to 2.1%

To recap the 3 final proposals put to us by the company were:

1. RPI Cap up to a maximum of 2.25% (but no less than 0%)

2. RPI cap between the range of 1.85% - 2.1%

3. Fixed cap of 2%

Under all options, pensionable pay would only increase each year by the member’s actual % pay increase (which could be lower than the Cap), up to a maximum of the Cap. (The RPI figure from the September before a pay award would be used to benchmark the Cap)

TSSA response

Each option has potential pluses and minuses for members depending on how inflation fares over the next few years which unfortunately none of us can predict. We are all aware that we would far prefer an option where no cap was applied but on the basis of the Caveats that we previously secured overall there are protections for members over the next 2 valuation cycles which are of benefit to all members of the Owen Williams and Amey Rail railway pension scheme in the long term.

As the consultation exercise ends on 26th November it was imperative that we used all the available time to push for an improved offer but also to secure the additional caveats and give a steer to Amey on which of the 3 options we thought would be best for our members. We also had to take cognisance of the fact that our sister union was favouring option 1 and that ultimately to secure a deal Amey wanted support from both Trade unions on 1 of the proposals.

In the end your representatives have decided to select option 1, due to the fact the Amey have clarified that if RPI ever goes into negative figures there will not be a decrease in pensionable pay but also as the maximum amount has been raised up to 2.25% from 2%. Whilst the past is not a representation of the future there have only been 4 occasions in the last 10 years when RPI was less than 2.25% so we believe on balance keeping some link to inflation is the better option and RPI is generally 0.5% higher than CPI.

What were the caveats?

The caveats that TSSA managed to secure earlier on in the negotiations were as follows:

· Retaining Non protected staff within the RPS until after the 2019 valuation

· Not increasing contributions or changing the benefits of the pension scheme until after the 2019 valuation (Contributions for Owen Williams = 10%, for Amey Rail = 12%)

· Guarantee that they will never claw back the employers increases to National insurance as a result of legislative changes in 2016 related to contracting out

· Potential to renegotiate the Cap after the 2019 valuation every 3 years

· The Introduction of Smart pensions which individuals can choose to opt out of if they wish but could save both the employee and employer on their National insurance contributions

· Changes would come into effect from 1 July 2015 (therefore the 2015 Pay award would still be capped at RPI +1% and the first impact on these proposals would only be felt from the 2016 pay award onwards)

· This agreement would apply to RPS members regardless of the legal entity that they work for within the whole of the Amey group (protecting staff who may have to TUPE transfer to Amey Services Limited)

On balance we believe that this is the best offer that could be achieved in the circumstances and provides numerous protections over the next two valuation cycles for members.

If members have queries or concerns on the above then they can contact Alan Valentine by clicking here

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