Rmt Win Pensions Victory For Merchant Navy Rating Pension Fund Members – Pre 1978 Service Credits
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My Ref: MRP 23/1
10th October 2013
Circular Num: NP/276 /13
To: The Secretary All Branches & Regional Councils
RMT WIN PENSIONS VICTORY FOR MERCHANT NAVY RATING PENSION FUND MEMBERS – PRE 1978 SERVICE CREDITS
In December 2012 the Shipping Grades Committee supported a resolution submitted by the Liverpool Shipping Branch in regards to Merchant Navy Rating Pension Fund (MNRPF) Pre 1978 Service Credits.
The resolution demanded that the General Secretary writes to the MNRPF Trustee Board requesting that they inform Fund members of their possible entitlement to these credits. It would appear that some MNRPF members were unaware of this possible benefit and therefore were missing the opportunity to increase their pension entitlement. There was also concern that the way in which this benefit was being calculated was incorrect.
These credits were established as a result of a surplus in the MNRPF in the mid 1980’s with the aim to provide scheme members with some form of pension provision for Merchant Navy service before the MNRPF commenced in 1978. These benefits are in the form of fixed pension additions for each year of pre 1978 service, increased while a member remains in service to help protect their real value from inflation.
Service also counts for those individuals who were on the Merchant Navy Establishment Register (the Pool) during their working life but remained a member of the MNRPF.
Pre 1978 Service Credits are awarded in the form of an annual pension with the possible option to exchange for a tax free lump sum payment subject to the usual limits. Members can receive in the region of £400 annual pension pro-rata for each year of pre-1978 Service Credits.
Further to the Liverpool Shipping Branch resolution an RMT member submitted an appeal through the MNRPF Informal Disputes Resolution Procedure (IDRP) requesting that the Fund Trustees reconsider his award of 5 years Pre 1978 Service Credits and increase this award to the maximum 8 years.
The appeal was based on the fact that the Trustee and Fund Administrator had not counted all employment service as continuous. Although the member had a break of more than 12 months his sea career had started in 1965 and therefore his total service was in excess of the 8 years maximum credit award.
There were also some inconsistencies with the MNRPF rules as a result of changes that appear to have been made in the 1990s. The correct criteria for payment of Pre 1978 Service Credits is as follows:
A member has to be a contributing member of the MNRPF before 5th April 1979, & was either a contributing member or on the ‘Pool on 1st April 1985 which was when the credits were first awarded, subject to a 5 year maximum,
Members who met these conditions at 1st April 1985 qualified for an increase in the maximum credit awarded on 1st April 1987 if they were still at that date a contributing member or on the ‘Pool’. The maximum was increased to 8 years.
Special conditions apply to members who moved between MNRPF and private company schemes during their industry service.
The RMT wrote to the Chairman of the MNRPF Trustee Board on 13th December 2012 demanding that the fund members are made aware of this benefit and that a thorough investigation is carried out by the Trustees to identify possible claimants.
A reply from the Chairman of the MNRPF informed the RMT that an investigation would be carried out by the Trustees and once this had been completed the RMT would be made aware of the findings.
The Trustees reported at their June 2013 MNRPF board meeting that following their investigations members would have their Pre 78 Pension Benefits checked and adjusted where necessary.
I am also pleased to advise you that as a result of the excellent support of the RMT, the previously mentioned member has been awarded the full eight years service credits. This is a magnificent victory for all members of the MNRPF and those RMT representatives involved should be congratulated on their hard work in ensuring that the member concerned has been fully compensated with these extra credits.
Further, as a result of the action carried out by the RMT, the Union understands that the following summary of rules will be used when calculating members’ entitlement to Pre 1978 Service Credits:
• Fund members will not be disadvantage as a result of breaks in service of more than 12 months.
• Service prior to 1970 will count towards the maximum 8 years back credits. Previously, only service up to 1970 was counted.
• Time on the “Pool” and in the industry, will count towards the Pre 1978 credits. As reported the rules were changed to say that the Pre 1978 credits would only be awarded for employment.
• Service in the industry prior to 18 years of age will count towards the Pre 1978 credits. The 1990 rules were changed to say that the credits would only be awarded for adult service.
The Fund administrators will shortly commence checking the details of individual members of the MNRPF to ensure that they receive their full Pre 1978 Service Credits. For some members the administrators will need more data from them before the check can be completed. Therefore members will be contacted.
This complex process will be time consuming and it is anticipated that this action will be completed until sometime between April and June 2014.
While there may be members who have concerns that they are missing out on this entitlement it is requested that they allow the trustees and administrators to carry out this check. However, if concerned members have not heard anything by June 2014 they should contact the administrator, Ensign Pensions Administration, through the members’ website at www.mnrpf.co.uk.
This information will also be communicated in the MNRPF Summary Annual Report 2013. The RMT will also circulate an update in early 2014 on developments.