COLAS RAIL PENSION SCHEME SECTION OF THE RAILWAYS PENSION SCHEME
I refer to my previous Circular NP/179/12, 6th August 2012, as you will recall following the 2010 Triennial Actuarial Valuation of the Colas Rail section of the Railways Pension Scheme (RPS) a deficit of £8.2 million existed in the fund and as a result member contributions were set to increase significantly
After a number of meetings a joint request was made by the RMT, Unite the Union and the TSSA that management reopens the scheme and that the company make a significant lump sum contribution into the fund to help mitigate this deficit. This request was declined by management and as a result RMT members with their colleagues from Unite were balloted for industrial action in support of these demands.
While both unions returned a negative result in regards to members prepared to take strike action, there was support for action short of strike action.
While the main objective was still to reopen the scheme to new members and seek a lump sum payment into the fund it was recognised that would be difficult regardless of the ballot result. It was therefore important that discussions continued so that concessions on behalf of our members could be reached.
After a meeting held on 1st November 2012 management made the following proposals:
· Pensionable Pay increases capped at CPI for future service
· Promotion counting for future service only
· 15 year recovery plan
· Salary Sacrifice for all members with the company committing to make a payment into the scheme for the next three years [time frame until the next valuation] equal to approximately 2% of section pay such that the contribution rate for members is 14%
· The 2% payment to be funded from member and employer National Insurance Contribution savings created by salary sacrifice
· In this event HMRC rules negatively affect the salary sacrifice option being offered the company commit to ‘underwriting this principle’ by maintaining members contributions at 14% until the next valuation
· In recognition of concerns the RMT have expressed in regards to the Colas Rail Pension Scheme being closed to new members, the company commit to working with the RMT to discuss possible solutions to the long term future of this RPS section
The RMT General Grades Committee after consideration have accepted these proposals, and in light of this acceptance have informed the company that we are no longer in dispute.
While the RMT are disappointed that the objectives of reopening the scheme to new members and that the company make a lump sum payment into the fund has not been achieved, it is recognised that there has been concessions achieved.
It also needs to be remembered that when discussions with management began in November 2011 member contribution were set to increase from 12.12% to 25.2% (+13.08%).
I will keep you informed of future developments.