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September 22, 2005
The draft results of the latest actuarial valuation of the Railways Pension Scheme were considered by the Trustees at their August meeting. The report of the Scheme's financial position, as at 31 December 2004, has now been sent to all employers and Pension Committee members for consideration and comment. Following those comments the actuary will produce his final report.
Unfortunately the report reveals the majority of Sections have deficits, and that for some, the deficits are rather large. This situation has arisen from an underperformance of investments over the past three years in comparison to the returns anticipated for the period, together with a strengthening of the mortality assumptions to reflect the increasing life expectancy of the scheme members.
While the actuary's report is only in draft form, the final version is unlikely to reveal any major alterations. The final report and any proposals necessary to correct Section deficits will be signed off by 30th June 2006, and therefore it is obviously necessary to discuss as soon as possible what action to take.
The general secretary has written to all employers seeking meetings to discuss the valuation, in order that joint consideration may be given to addressing the matter. Unfortunately, these poor results obviously mean the majority of Sections will face a rise in the contributions. However, the size of some of the deficits is somewhat alarming and the union is very concerned that the potential contributions for some Sections will be unsustainable, resulting in members leaving the scheme. Should this happen, even greater pressure would be placed on the remaining members.
It is the union's intention therefore when meeting with management to explore ways of restricting any necessary increase in contributions. With this in mind a meeting has been arranged on 31 October 2005 to enable all RMT's Regional Organisers and Pension Committee representatives to discuss potential ways of tackling the problem.