Increase in Pension Contributions Railways Pension Scheme – Amey Railways Section

March 6, 2003

Amey pension contribution increase to 7.5% from 1 January 2004.

The latest valuation of the Amey Railways Section of the Railways Pension Scheme has revealed a deficit. The valuation as at 31 December 2001, gives a funding level of after reserves of only 98%. The future joint contribution rate necessary to pay for future benefits is 23.5% which means members must contribute 9.40% of pensionable pay and the employer 14.10%.

Regrettably it is therefore necessary for contributions to increase. In this respect the following proposal for increasing contributions was agreed by the Trustees at their February meeting:

Members
5.0%  until    31.12.03
7.5%  from    1.01.04  - 30.11.04
9.40% (40% of jcr)  from 01.12.04

Employers                                                      
7.50%   from  01.01.03 -  31.03.03                     
7.60%   from 01.04.03  - 31.12.03
14.49% from 01.01.04. - 30.09.09
14.10% (60% of jcr) from 01.10.09

In addition the employer will pay its Brass matching from 1^st July 2003rather that the existing arrangement whereby these amounts are paid from the fund. The funding level will be improved by £2.869m to 100% with additional employer costs being recorded as £2.44m and members paying £0.425m less.

This matter was considered by the Council of Executives and the following decision carried:

"That we note the report and express our grave concerns at the substantial increase in our members' pensions contributions. The General Secretary is instructed to circularise all Branches, Regional Councils and Officers to inform them of our intention to seek increases in rates of pay taking into account full pension contribution increases immediately and in all future years.  The General Secretary is instructed to place an article in the next edition of RMT News concerning this matter.  The General Secretary to ensure that all current and future pay submissions reflect this decision."

Circular No.081/03