Thales Transport & Security Section of the Railways Pension Scheme 2013 Triennial Actuarial Valuation Proposals
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My Ref: MRP 1/8/67 3rd August 2015
Circular Num: NP/141/15
To: The Secretary All Branches & Regional Councils
Thales Transport & Security Section of the Railways Pension Scheme
2013 Triennial Actuarial Valuation Proposals
Following the 2013 triennial actuarial valuation of the Thales Transport and Security shared cost section of the Railways Pension Scheme the draft results revealed, allowing for future contributions, a deficit of £64 million with a funding level of 79.6%.
The actuary has indicated that if no corrective action is taken the Joint Contribution Rate (JCR) would increase, based on a 10 year recovery period, as follows:
• Member from 11.88% to 89.04% (+77.16%) / *Employer from 17.82% to 115.74% (+97.92%)
*Please note the Thales is currently making additional annual lump sum deficit correction payments of £326,400 which are not included in the employer rate above.
As a result of this significant deficit in the scheme RMT representatives have expressed their concerns that if no action is taken the fund will close as members will have no other alternative but to leave the section due to the excessive increase in contributions.
Our representatives have been meeting with management to find a solution to keep the scheme affordable, while also protecting members’ future service benefits.
Following these discussions management made the following proposals:
• A CPI pensionable pay cap to applied from 1st July 2015
• The Joint Contribution Rates to be maintained at its current rate: Member 11.88% / Employer 17.82%
• The employer to make annual lump sum payments of £2.75 million over a 15 year deficit recovery period
You will note that the employer has agreed to increase their additional lump sum payments and as a result the member contribution rate will remain at its current level. As a result of management’s decision to absorb the increase in the JCR our representatives are recommending acceptance of these proposals.
The General Grades Committee in consideration made the following report on 30th June 2015:
“That we note the latest report on file and the recommendation to accept the proposal.
We therefore instruct the General Secretary to advise the company of our acceptance.”
I will keep you informed of any developments.