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Colas Rail: 2010 Pensions Valuation

22 November 2012

Following a recent meeting with Colas Rail we are now able to provide details of the final proposal to deliver a reduced level of member contribution referred to in previous circulars (Nos. 199 and 243) on this issue:

 

  • Cap on Pensionable Pay implemented for future service at CPI.
  • Future Service only for salary increases due to promotion.
  • 15 year deficit recovery/repayment period.
  • Salary sacrifice arrangements introduced for RPS members. As a result the company committed to make a payment into the scheme for the next three years equal to approximately 2% of Section Pay so that the contribution rate for employees is 14.00%.
  • Underwriting the principle of salary sacrifice. This means that if a change in HMRC rules adversely affects the salary sacrifice option the company will continue to pay the additional 2% until the next valuation maintaining the employee contribution rate at 14.00%

TSSA considers that this is the best possible way of addressing the current deficit disclosed in this Sector of the Scheme and also keeps employee contribution levels at an affordable level. TSSA takes no pleasure in seeing a change to benefits and remains of the view that the section should be open to all Colas Rail employees. However, there is also a responsibility to keep contribution levels affordable and we think the proposal achieves this.

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