TfL Pension Fund - Independent Review

My Ref: MRP 2/1

15th October 2021

Circular Num: NP/381/21


Dear Colleagues,


I refer to my previous Circular NP/375/21, 11th September 2021, as the RMT has been maintaining since the Independent Review of the TfL Pension Fund was announced it is our view, based on actuarial advice, that this final salary pension scheme is well funded and not in a position where our members benefit need to be reduced or their contributions need to increase.

I can advise that the following statement has been prepared by the TfL Pension Fund Trustee Board which confirms the RMT’s view that the fund is in a positive funding position which will be confirmed by the fund actuary once the 31st March 2021 Actuarial Valuation is completed in 2022.

“At the full Trustee Board meeting on 24th September, an update on progress in relation to the 2021 triennial valuation was provided.

There have been a number of meetings between representatives of the Trustees and TfL regarding the approach to the 2021 valuation, and the Fund Secretary has kept the Pensions Regulator updated in relation to the progress of the 2021 valuation.

The Scheme Actuary presented the results of some preliminary valuation calculations. It was noted that on a basis consistent with the requirements of the Pensions Funding Agreement (PFA), which was agreed by the Trustee and TfL in conjunction with the 2018 valuation, the Public Sector Section is estimated to be broadly 100% funded on that PFA basis as at 31 March 2021. This represents an improvement in the financial position of the Public Sector Section since the 2018 valuation, due primarily to positive investment performance over the three year period.

However, the assumptions set out in the PFA assume that there is no change in the Trustee’s assessment of the sponsor covenant supporting the Fund. The Trustee noted the importance of forming an updated view on the strength of the employer covenant in determining suitable assumptions for the 2021 valuation. This will be facilitated by greater clarity on the extent of future long-term Government funding for TfL, expected to be available in December, following which it may be possible to make a funding proposal to TfL.”

This union would like to reiterate its opposition to the Independent Review which is aimed at reducing Government costs at the expense of our members retirement benefits. Our view that the TfL Pension Fund is well funded is now confirmed and we call on the Independent Review to allow the Trustees to complete the valuation and continue with the excellent work they are carrying out on behalf of all stakeholders.

I will keep you advised of developments.

Yours sincerely

Michael Lynch
General Secretary