RPS Valuation Circular

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                                                 30th October 2013
 
                                          Circular Num: NP/299 /13

To: The Secretary All Branches & Regional Councils

Dear Colleagues,

RAILWAYS PENSION SCHEME TRIENNAL ACTUARIAL VALUATION RESULTS – 31ST DECEMBER 2013

As you will be aware an RMT Briefing meeting and Railways Pension Scheme (RPS) Seminar has been arranged for 31st October 2013 where the forthcoming 2013 RPS Triennial Actuarial Valuation results will be discussed. While the indicative draft results are not due until at least 28th February 2014 it is important that RMT representatives on RPS Pension Committees and other consultative bodies are aware of the issues that will be facing them during the valuation procedure.

Two of the key issues for this union will be affordability and protecting future benefits for members. These two crucial issues have been discussed at the Informal Pensions Working Party (IPWG) which is made up of all rail unions and Train Operating Company (TOC) management.

The IPWG has recently discussed possible ways of mitigating possible deficits in RPS TOC sections which may appear following the valuation results.

The IPWG recently produced a draft presentation to be considered by trade unions. This was placed in front of the General Grades Committee on 3rd October 2013 for consideration.

The IPWG presentation outlined the same proposals which were made following the 2010 Valuation results to help reduce the deficit in the Network Rail section of the RPS and also to maintain decent final salary benefits for new employees.

The Network Rail and IPWG proposals are as follows:

For new members

•    Future increases in pensionable pay limited to RPI + 0.5% p.a.
•    Promotional increases count for future service only
•    A promotional increase is defined as a change in grade or band; large increases within a band or grade will be treated as a general pay increase and therefore will be subject to the RPI + 0.5% cap.
•    Normal Retirement Age increased from 60 to 65
•    Cost neutral factors applied to retirement below age 65
•    Basic State Pension Offset (BSP) reduced from 1.5 to 0.75
•    No automatic lump sum but members can possibly commute up to 25% as tax free cash in lie with Inland Revenue Rules

Existing RPS members

•    Restricting future pensionable salary increases for all members to RPI + 0.5%
•    Promotional increases count for future service only
•    A promotional increase is defined as a change in grade or band; large increases within a band or grade will be treated as a general pay increase and therefore will be subject to the RPI + 0.5% cap.
•    Existing members will have the option to switch to new member option
•    Existing members with ‘protected’ or ‘indefeasible rights’ will be able to sign a partial waiver on entry to RPS2 but will not lose all their protection

Please note any changes identified as a result of recommendations from IPWG will be subject to the normal valuation consultation processes to be conducted independently in each TOC prior to implementation.

In consideration the General Grades Committee on 30th October 2013 note and adopt the following report from the Pension Industry Wide Sub-Committee:

“That we note that the Railways Pension Scheme has called a meeting to discuss the scheme in general and the valuation due on 31st December 2013. This meeting is to take place on the 31st October 2013.

The General Secretary is instructed to call a meeting of all RMT pension committee representatives on the same day.

Further the General Secretary is instructed to go to the Informal Pensions Working Group meeting with the TOCs and place on record  that the RMT want ‘free travel’ for all railway workers and that the three schemes in future should only be TOCs, Network Rail and Omnibus sections.

The General Secretary is to report back to the General Grades Committee when the meeting is finished.

Regional Councils and Branches to be informed.”

I will keep you informed of developments

Yours sincerely,
 
R. Crow
General Secretary