TfL Pension Fund - Ill-health Arrangements

RMT is extremely concerned that proposals are being considered which would alter the treatment of members in the Transport for London pension fund who are forced to leave employment owing to ill-health.

Members will be aware that consideration is being given to difficulties associated with the fact the TfL pension fund office's guidelines dealing with ill-health pensions cases do not coincide with scheme rules.

This situation has been exacerbated by new HM Customs and Revenue guidelines issued in connection with the Finance Act 2004 which do not permit ill-health pensions to be varied.

Discussions have taken place at the TfLPF trustee board, the trustee operations sub-committee, and with the TfL representatives at the Pensions Joint Working Group, in an attempt to resolve the issues concerned.  To date no agreement has been reached.

Currently, if medical evidence indicates a member is unfit to do his/her own job an ill health pension would be granted. The pension may be suspended if the individual recovers to full fitness, or revised to reflect an income.

Where an income is earned, if the income plus TfL pension is greater than that of their previous job, the pension is reduced so that the individual's overall earnings are not greater. Any change to the TfL scheme rules would, of course, affect fund members employed by Metronet, Tubelines and other private sector employers.

During discussion at trustee board, the union's nominee, RMT assistant general secretary Pat Sikoski, has argued that the fund office guidelines actually reflect members' conditions of service and therefore the rules should be amended in recognition of that fact.

RMT has also proposed the abolition of Rule 19 (5) which would mean that once granted an ill-health pension would not be reviewed. A similar line has been taken when discussing the issue at the TfL pensions working group.

However, at a recent trustee operations sub-committee, a proposal was made which would split ill-health pensions into two parts; one relating to the member's basic pension, and the other, in respect of the additional pensionable service granted in recognition of ill-health retirement.

While this was not agreed, RMT is concerned that TfL is seeking to force through the trustee board changes to the fund office guidelines which would alter the current provision whereby anyone who is less than 100 per cent for their own job becomes entitled to an ill-health pension. 

In addition to the suggested abolition of Rule 19(5), RMT's policy has been:

1. Retain the current 100 per cent fitness to undertake own duties, and
2. No variance in the ten added years' entitlement under the current rule.

The principle of 100 per cent  fitness for the employee's own job rather than an 'all work' test is a long standing condition of service and the impact of the Finance Act 2004 can easily be encompassed by abolishing Rule 19(5). This would mean that once granted an ill-health pension would not be reviewed.

RMT believes that management's proposals to worsen the current arrangements are a fundamental attack on a long standing valuable condition of service. The union has therefore written to all employers advising that any attempt to change scheme rules, or the current accepted interpretation of the procedure, will result in a dispute.

RMT general secretary Bob Crow has written to all employers involved in the TfLPF seeking an assurance by September 20, 2006 that they will not amend the current ill-health pension arrangements or consent to an alteration of the TfLPF rules without prior agreement with the union. The absence of confirmation by September 20 will result in a dispute.

Bob Crow is to contact other unions with members in the TfL pension scheme seeking their support.

Members will be kept advised of developments.