22nd September 2020
My Ref: MRP 1/8/32
To: The Secretary All Branches & Regional Councils
COLAS RAIL SECTION OF THE RAILWAYS PENSION SCHEME (RPS) – 2019 ACTUARIAL VALUATION PROPOSALS
Following the 2019 triennial actuarial valuation of the Colas Rail shared cost section of the RPS the draft results reveal that the deficit in the scheme has reduced from £21m to £14.2m since the last valuation in 2016. This has resulted in the funding level improving from 88.8% to 93.4%.
However, while this is good news I have to report that the future service rate will increase which will result in the Joint Contribution Rate, including deficit contributions, slightly increasing as follows:
· Member: Currently 19% to 19.1% (+0.1%) (Salary Sacrifice)
· Member: Currently 21.44% to 21.72 (+0.28%) (Non Salary Sacrifice)
· Employer: Currently 24.66% to 25.08% (+0.42%)
I would also add that the employer will continue to make deficit correction lump sum payment into the section of £1.7m per annum until 2028.
Management have indicated that for members of the scheme who are on an annual salary of £45k this would see their contributions increase on a weekly basis by £1.55 per week for those who participate in Salary Sacrifice and £4.50 per week for those who don’t participate in Salary Sacrifice.
While it is noted that the level of contributions for this section of the RPS is one of the highest the RMT deal with our representatives reluctantly have recommended acceptance of the employer’s proposal.
In consideration your NEC on 16th September 2020 agreed the following resolution:
“That we note the report on file from the Lead Officer and the sentiments contained therein. We further note that contributions will increase on a weekly basis by £1.55 for those who participate in Salary Sacrifice and £4.50 per week for those who don’t participate in Salary Sacrifice.
Accordingly, the General Secretary is instructed to write to the company advising them of our acceptance of this.
Relevant Branches, Regional Councils and Reps to be advised.”
I would further advice that the employer will shortly begin a statutory 60 day consultation with the 118 active members of the scheme.
I will keep you advised of developments.