The Governments State Pension Reforms & Impact on Railway/LUL Pension Provisions

My Ref: MRP 35/1                                

13th February 2014
                                          Circular Num: NP/037 /14

To: The Secretary All Branches & Regional Councils

Dear Colleagues,

The Governments State Pension Reforms & Impact on Railway/LUL Pension Provisions

I refer to my previous Circular, NP/314/13, 11th November 2013, as you will recall as a result of the proposed ceasing of contracting-out in 2016 the Government are proposing that employers should be allowed to recoup their National Insurance Contribution (NIC) rebate by altering members future pension benefits or/and increasing contributions. It is proposed that employers will be allowed to do this without the need of trustee consent and that those employees with protected status will see their protections overridden so that the promised made prior to privatisation of the rail industry and London Underground are bypassed.

As I previously reported the RMT continue to campaign through our Parliamentary Group to have amendments made to the Pension Act 2013. RMT representatives have also met with the Minister for Pensions and have had meetings with members of the House of Lords including the Labour opposing who have supported this union’s position.

While the Governments proposal to cease contracting-out and override trustee consent are still making their way through the legislative system I am pleased to advise you that the Government announced on 12th February 2014 that they intend to honour the promised made as a result of privatisation. In a Ministerial Statement of 12th February 2014 the Minister for Pensions, Steve Webb MP stated:
“The Government has decided that it should honour the promises that were made at the time of privatisation and which, in many cases, have been affirmed by Government Ministers subsequently.”

I have included the full Ministerial Statement for your information with this circular.

Any such change to a protected persons future pension benefits can now only be implemented by negotiation and with the agreement of the individual.
The Government are intending to table an amendment before the Lords Report Stage to ensure the statutory override cannot be applied in respect of scheme members with protected person status.
This will no doubt come as a blow to the 27 employers and pension advisors who responded in favour of overriding protected person’s legislation but this will be seen as a victory for the RMT and other unions, who opposed this proposal.

The RMT will continue to fight of all our members who may be negatively affected if the Pension Bill 2013 goes through in its present form.

The RMT are planning to meet with the Minister of Pensions over the next month and an amendment tabled by the RMT Parliamentary Group requesting that overriding trustee consent is removed from the bill being considered by the House of Lords.

I will keep you informed of developments.

Yours sincerely,
R. Crow
General Secretary