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Invensysrail: Pensions Consultation Fail to Agree

22 March 2013

Update: Fail to agree registered by Your Company council due to the lack of meaningful consultation on Pensions changes, currently due to end on Monday 25 March 2013. Please also complete our survey today regardless of which scheme you are in and encourage all your colleagues to do the same via https://www.surveymonkey.com/s/InvPen

 

Issues

The Ask Kevin Pensions consultation seems to have yielded more questions than it has answered with the company failing to provide detail on how you will individually be affected if you are currently in the Invensys Pensions Scheme (IPS) final salary scheme or IPS Defined Contributions scheme or the Invensys Stakeholder Pension scheme (ISPS). There is also lack of clarity for those in the Railway Pensions Scheme (RPS) on whether Siemens will honour the Deficit recovery plan already put in place by Invensys after the last tri annual review in 2010 (next one due at the end of 2013).

Only the company are in a position to illustrate how your Pensions benefits will be affected. However we thought it might be useful to spell out the different contribution rates that individuals can pay into each scheme and how this will differ upon moving to the Siemens Defined Contribution scheme. After all Pensions contributions are a form of deferred pay and this is therefore a key issue for our members.

Looking at the table below it is clear that just in terms of the levels of contributions being made to your pension scheme there will be between 3-16% reductions in the amount that the employer will have to pay which represents a cut in your overall benefits package from the company, not to mention those losing access to a Final Salary Pension scheme.

Please Note: Whilst for the RPS scheme there are currently no changes for the pensions contributions there are still unanswered questions about Siemen’s position on the deficit recovery plan and how those decisions may impact on future contribution rates. Also for those not currently in a Pensions scheme at all who will be involved in the government backed auto enrolment scheme, the scheme on offer provides proportionately less employer contributions than that previously available in any of the Invensys schemes.

Pension Scheme

Employee Contr

Employer Contr

Total Contr

Min/Max Employee contr difference

Min/Max Employer contr difference

Min Max Total contr difference

Siemen’s

Between 3-10%

Between 3-10%

Between 6% - 20%

N/A

N/A

N/A

RPS

13%

19%

32%

N/A

N/A

N/A

IPS – Defined Benefit/Final Salary

13%

19%

32%

Between 3-10% Less

Between 9-16% less

Between 12-26% Less

IPS – Defined Contribution

5%

6%

7%

8%

9%

10%

10%

11%

11%

12%

12%

13%

15%

17%

18%

20%

21%

23%

0%

0%

0%

0%

0%

0%

5%

5%

4%

4%

3%

3%

5%

5%

4%

4%

3%

3%

ISPS

3%

4%

5%

6%

7%

8%

9%

11%

13%

0%

0%

0%

3%

3%

3%

3%

3%

3%

We have also been provided with figures from a concerned member who has taken the time to work out how those currently within an IPS Defined benefit or Final Salary pension could be affected by these changes in different circumstances. These figures do not take into account future promotions or pay rises but provide a static picture of how pensions benefits may change if pay stayed the same.

Example 1:

“For an employee who earns £45000 per annum. Working on retirement at 60 years of age.

To date they have 10 years in the IPS final salary scheme, this will freeze on the date of the takeover. Therefore they will enter the Siemens Scheme for 30 years.

The 10 years in the IPS scheme will provide a lump sum of £11250 on retirement.

This Invensys pension will provide remuneration of £7500 per annum. Calculation provided from Salary / scheme type 1- 60thx Number of years in the scheme

Therefore the Siemens Scheme will be required to make up the other part of the lump sum, hence £33750. The two lump sum figures when added together will now provide £45000, hence a year’s salary on retirement.

To have the same benefit as the 2/3 final salary, the Siemens Scheme will have to provide remuneration of £22500 per annum. Therefore the two pensions will provide a combined figure of £30000. The contributions from the employee in the Siemens scheme will be 28% of their wages. That is 15% more than today.”

Example 2

“For an employee who earns £45000 per annum. Working on retirement at 60 years of age.

To date they have 30 years in the IPS final salary scheme, this will freeze on the date of the takeover. Therefore they will enter the Siemens Scheme for 10 years.

The 30 years in the IPS scheme will provide a lump sum of £33750 on retirement.

This Invensys pension will provide remuneration of £22500 per annum. Calculation provided from Salary / scheme type 1- 60thx Number of years in the scheme

Therefore the Siemens Scheme will be required to make up the other part of the lump sum, hence £11250. The two lump sum figures when added together will now provide £45000, hence a year’s salary on retirement.

To have the same benefit as the 2/3 final salary, the Siemens Scheme will have to provide remuneration of £7500 per annum. Therefore the two pensions will provide a combined figure of £30000. The contributions from the employee in the Siemens scheme will be 54% of their wages. That is 41% more than today.”

Clearly the differences in entitlement and the additional contributions that you would need to make in the circumstances above are staggering and that is why we feel that we need to band together and seek to achieve some basic aims.

4 Main Aims

The consultation exercise clearly hasn’t been robust enough to cover all of your concerns we believe that we need to achieve the following aims:

· Extension of the consultation exercise to explore all the options

· Include representatives from Siemens in those talks

· Secure a better pensions offering than is currently being proposed

· Clarify Siemens’ intentions on the RPS and the deficit recovery plan

We and your company council representatives believe that these aims are what you wish to achieve but we need to be sure that we are correct in that assumption and because Invensys have not even told your company council reps who is in what Pensions scheme they need your help to both confirm that you support these aims but also to identify which scheme you are in to be able to best serve your interests. Please set aside some time today to complete the following survey and be conscious that it will only allow you to respond once:

https://www.surveymonkey.com/s/InvPen

This survey will be open to all Invensys rail staff and whilst TSSA are assisting by conducting the survey we will make the key information available to the Company council as a whole to help inform them as to your desires. However we are only as strong as our membership, when Siemens take over it is really important that we are in as strong a position as possible so please encourage your colleagues not only to complete the survey but to join us via the following link:

www.tssa.org.uk/join

The company have also announced that there are Company council positions vacant and we would strongly encourage Union members to fill these roles as the relevant Trade unions can provide training and support to you in this important and necessary role, the company should provide Paid time off to attend this Trade union training. TSSA has an accredited Education programme which allows you to gain the necessary skills that you need to represent members in the workplace. If you would are considering filling one of these roles or would like to find out more about being a Health & Safety rep or Learning rep then please contact Alan Valentine

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