Southern Section of the Railways Pension Scheme – 2013 Actuarial Valuation

My Ref: MRP 1/8/26                                   19th November 2014
 
                                            Circular Num: NP/245/14
To: The Secretary All Branches & Regional Councils

Dear Colleagues,

Southern Section of the Railways Pension Scheme – 2013 Actuarial Valuation

Following the 2013 triennial actuarial valuation of the Southern shared cost section of the Railways Pension Scheme, the full draft results reveal a deficit of £4 million with a funding level of 99.1%.

As a result of the shortfall in the fund, and following actuarial advice, management presented to the Southern Pensions Committee two possible options to mitigate the deficit.

“Options One” was to keep contribution at their current levels and expend the recovery period by 2.5 years. “Option Two” was to increase contributions and maintain the present recovery period, which has less than 7 years to run.

Having considered both options the Southern Pension Committee endorsed “Option One”. Full details of this option are below:

•    Contributions to remain at their current rates-

o    Category One: Member 10.56% / Employer 15.84%

o    Category Two: Member 9.92% / Employer 14.88%

•    Deficit Recovery Period until 31st March 2024 (Originally 30th June 2021)

•    No Benefit Changes

The General Grades Committee in consideration of this proposal on 4th November 2014 made the following report:

“We note that the employer has proposed two options. Maintaining the present Joint Contribution Rate and extending the deficit recovery period or increasing contributions and maintaining the recovery period. Both proposals are in line with actuarial advice.

We further note that our Southern Pension Committee is recommending acceptance of Option One.

Therefore we instruct the General Secretary to inform the company of our acceptance of Option one of their proposals.”

I will keep you informed of any developments.

Yours sincerely,

 

Mick Cash
General Secretary