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Pension Proposals

15 February 2011

Update on proposed changes to the defined benefit Pensions scheme which is currently under consultation within AB Ports.

Proposals


The company were contacted in January 2011 following members’ queries regarding the proposed changes, the company have since responded providing a list of Questions & Answers which have been sent out to the staff affected. Thankfully the disk sent out to staff from the company which outlines the proposals has been obtained.

This outlines proposed changes for those 770 currently active members paying into the defined benefit scheme. In the proposals there are only two options proposed which staff haven’t had any say on in advance of the consultation which has ran from 22 November 2010 and ends on 21 February 2011.

The two options proposed are ‘Cap and Continue’ and ‘Stop and Start’. Cap and continue is effectively a continuance of the Defined benefit scheme but capping Pensionable pay by a maximum of 2% each year after 31 March 2011. Stop and Start proposes to defer the Defined Benefit scheme after 31 June 2011 and from 1 July 2011 move everyone into a Defined contribution scheme.

Hopefully those of you who are in the scheme will have received information from the company on the proposals in full and received the questions and answers paperwork that I have.

TSSA response


TSSA policy is opposed to cuts in Pensions benefits and views the company proposals as an attack on members Pensions. Unfortunately as we are not recognised by AB Ports for the purposes of collective bargaining we have not been involved in the consultation process.
Whilst we cannot provide independent financial advice or advise members on any option to choose we do have concerns with the proposals:

- This appears to be nothing more than a cost cutting exercise
- The company has only provided information on costs in terms of percentage of salary we believe that they should also provide you with more in depth information on estimates of cost such as National insurance contributions
- We are not convinced that the consultation process is meaningful as AB Ports appear to have very set ideas on what the potential outcomes are going to be with the 2 options and don’t appear to have consulted you first before forming these options.
- There is a real danger that unless members make their feelings known that the company will close the Defined Benefit scheme to existing active members, it is important therefore that members make their objections to these proposals known and if possible illustrate how it will impact on you personally. Members are understood to have been provided with illustrative figures and they may wish to request access to financial advice.
- AB Ports is dismissive of the fact that it has benefited enormously from an extended period of contribution holiday and only restarted contributions in 2008. Without doubt this inaction regardless of professional advice has contributed to the current funding position. Indeed it tries to give the impression that it used its savings from the contribution holiday for the good of staff. The company always insisted that it was entitled to the lions share of any surplus because it would have to assume responsibility for any deficits that might arise in future – now that it has a deficit it wants the members to take the hit!
- Whilst it says that it is not about cost ABP evades the relatively straight forward question of how much its contributions would be to maintain the status quo in the Defined Benefit scheme.
- The latest triennial actuarial valuations should be completed shortly and it would seem more appropriate for discussions on any potential changes considered necessary to address the funding position to be dealt with when these figures are known. Furthermore a move from RPI to CPI indexation may make a significant difference to the valuation and any action required to deal with the funding.

What can I do?


If you haven’t done so already you must make your objections known through the consultation exercise before it closes on 21 February 2011. Some people may have prepared statements to be sent to the company already and you are encouraged to personalise the statements as much as possible but ask questions about some of the above points if you are able.

The company email to send responses to is pensions@abports.co.uk]

If you have any other queries then please contact me].

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