My Ref: MRP 1/8/16
11th May 2018
Circular Num: NP/85/18
To: The Secretary All Branches & Regional Councils
LONDON OVERGROUND (LOROL) SECTION OF THE RAILWAYS PENSION SCHEME (RPS) – 2016 TRIENNIAL ACTUARIAL VALAUTION
As you will be aware every three years the Trustees of the RPS have to carry out actuarial valuation of each of the 100 plus sections in the RPS to ensure that the assets in each of these sections meet all the liabilities (benefits) built up in the schemes. Where there is a deficit the Trustees are required to make arrangements to address the shortfall. If there is a surplus in the section then this can result in contributions reducing for both the employer and active members.
The Trustees have 15 months to complete the valuation process and put in place the necessary arrangements depending on whether the section is in deficit or surplus. In the case of the RPS all sections should have completed this process by 31st March 2018.
However, as you will be aware following Circulars NP/176 /17, 1st November 2018; NP/028 /18, 12th February 2018 and NP/030/18, 13th February 2018, all Train Operating Companies (TOCs) sections are yet to complete the 2016 valuation due to the ongoing discussions between the RPS Trustee and the Pensions Regulator.
As a result of this delay the Pensions Regulator has extended the deadline for the 2016 valuation to be completed until these discussions are completed.
I can advice you that as a result of this delay LOROL management have advised the RMT that they are proposing that the current Joint Contribution Rate (JCR) of the London Overground Section of the Railways Pension Scheme will remain at its current level until the 2016 actuarial valuation of the section has been finalised by the trustee.
In accordance with the sections schedule of contributions, which were agreed as part of the 2013 actuarial valuation, it was expected that as from 1st July 2018 employer and member contributions would reduce, however, as the valuation has not been completed the JCR will remain at its current level.
As a result of this current contribution rate being higher than that stipulated in the schedule of contributions the employer is obligated under legislation to carry out a 60 day consultation process.
Management have advised the RMT that statutory consultation will begin on 30th April 2018 and will end on 28th June 2018.
I will keep you informed of developments.