My Ref: MRP 2/1
23rd December 2020
Circular Num: NP/315/20
To: The Secretary All Branches & Regional Councils
TFL PENSION FUND – INDEPENDENT REVIEW
The RMT are advised that the Commissioner for TfL on 11th December 2020 announced the publication of an Independent Panel Review of TfL which recommends that a commission is established to review the TfL Pension Fund.
For the record the TfL Pension Fund is a final salary (defined benefit) arrangement and has approximately 26,000 contributing members, 32,500 pensioners, 16,800 deferred members and has assets to the value of £10.5b at 31st March 2020. The Fund is currently in deficit with a funding level of 95% which was recorded at the last valuation carried out in 2018.
The Independent Review states that the TfL Pension Fund is expensive outdated and must be reformed. While its important to note that no firm proposals are yet to be made the Review recommends that considerations should be given to closing the scheme to new entrants, changing the way member’s pensions are calculated from Final Salary to a Career Average Revalued Earnings (CARE) and also changing the indexation method from RPI to CPI i.e. reduce pensioners’ annual pension increases etc.
At a time when our members across TfL/LUL have been putting their lives at risk while trying to keep London moving these recommendations are nothing more than opportunist and are simply an outrageous attack on our members retirement expectations. All of the above so called considerations will make contributing members, current pensioners and future employees poorer in retirement. The suggestion that the Fund should be reformed is nothing more than nonsense many other comparable occupational pension schemes have not suggested such a wide range of changes. Our view is simple this is not a race to the bottom and if such proposals were to be forced on our members they would be met with the upmost resistance.
In consideration your NEC on 22nd December 2020 noted and adopted the following report:
“We note the findings of the independent review which will make all members of the TfL Pension Fund poorer in retirement if suggested changes were made to benefits. It is clear that the reviews aim is to use workers retirement income as a way of balancing the books at TfL which is totally unacceptable and unjust.
Therefore we instruct the General Secretary to write to all members across TfL and LUL informing them that while no proposals have yet been made this union is fully committed to defending our members’ pensions if suggested changes were to be proposed.
Branches and Regional Councils to be informed.”
I will keep you advised of any developments.