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Railway Pensions Scheme

7 July 2010

At a meeting last week, the railway trade union officers were briefed on a substantial change to the Railway Pension Scheme that Amey wish to make in respect of all employees who are members of either the Amey Rail or Owen Williams’ sections.

The briefing document states the following:

For employees with protected status or indefeasible right:
- freeze pensionable pay from November 2010
- which will reduce pensions at retirement but aims to keep pension contributions at affordable levels for all;

For employees with no protected status:
- remove them from the RPS for future service and offer a defined contribution pension instead
- double match contribution levels to 8% of pay

The background to this proposal is a review of all pensions within Amey, including proposed closures of all defined benefit (DB) schemes because of:

- cost of pensions – in 2009 Amey spent £37m on pensions across the group and expect this to rise to £46m by 2014
- increasing deficits (currently £150m in all DB schemes, including the RPS – estimated on latest Summary Funding Statement to be £33.6m in Amey Rail Section and £3m in Owen Williams Section)
- introduction of National Employment Savings Trust (NEST) which will increase the company’s costs because everyone has to be in a pension scheme, or NEST, by 2012
- the company needs to be competitive on price in current markets.

How does it affect me?

If you are in the group who have a protected status or an indefeasible right to be a member, the proposals appear to cut across the legal protection afforded by the Railway Pensions (Protection and Designation of Schemes) Order 1994 because:

- come your retirement your pension rights are not going to be as favourable as the rights you enjoyed in the BR Pension Scheme. Every time there is a pay award, your pensionable pay will reduce because the new amount will not count toward your final pension. For instance, if you intend to retire in 10 years and assume an annual increase in pay of 2%, that equates to a 20% loss of pensionable pay. Pensionable pay is the percent of your salary that counts towards your final salary pension – if it is at 85% currently that means if you were able to retire now, 85% of your final year’s salary would be use to work out your pension – this proposal will significantly worsen that, and especially for people with longer service in front of them;
- the company is not going to provide an alternative adequately funded occupational pensions scheme which is at least as favourable – there is no alternative proposed.

I am concerned that not only will you see a worsening pension but also by accepting this change that you may loose your protected status for other things as well. What will Amey want to change next time they want to enhance their profit margins? Members need to object to this proposal!

For those without protection status, ie employed by BR after Midnight on 4th November 1993, the situation is different. The company is under an obligation to consult over the changes but ultimately can bring in the change unless you are prepared to make a stand. Members need to object to this proposal!


By the time that you read this circular, you should have received a letter from the company consulting you about the change. You have until 3rd September to register your views at

TSSA’s view

TSSA strongly objects to this attack on members’ pensions. We believe that whatever the stated reasons for the proposal, the real agenda is to enhance company profitability at our members’ expense. For this reason I have referred the matter to my legal advisors but we are also calling on members to take action by:

- participating in the consultation by e-mailing/writing to One Gateway (copy to TSSA), stating your name, address and position and using the following form of words:

“With reference to your letter dated July 2010 consulting me over changes to my RPS pension. I am writing to register my protest and objection to the proposed change to the Railway Pension Scheme and refuse to accept your proposal.”

- Speak to your colleagues about replying to the letter – only if they object in writing will the company listen;
- Get non-union members to join TSSA today – the more members, the stronger the union – and we may be able to extend collective bargaining.

I will keep members updated on developments.

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