18th July 2018
My Ref: MRP 1/8/61
To: The Secretary Regional Councils, All Shipping Branches
TUPE TRANSFER OF LNER FLEET ENGINEERING STAFF TO HITACHI RAIL EUROPE - PENSIONS
The RMT are advised that it is proposed that approximately 526 employees will be TUPE transferred later this year from LNER, formally East Coast Main Line (ECML), to Hitachi Rail Europe (HRE). Of those 526 employees 487 are active members of the ECML section of the Railways Pension Scheme (RPS). 105 of these members are protected, 4 have indefeasible rights and 378 are non-protected.
In accordance with statutory legislation HRE are obligated to provide those employees who have protected or indefeasible rights future pension benefits which are comparable to those which were provided prior to privatisation under British Rail Pension Scheme and are presently provided by the ECML Pension Scheme.
I can advise you that HRE have indicated that they intend to open a new section of the RPS so that their obligations are met and that non-protected employees will also be allowed to join the new scheme.
However, HRE are proposing that the new section will be closed to new entrants and that only protected members, and those with indefeasible rights, will have the opportunity to transfer their past service benefits from the ECML section into the HRE section.
This union’s position is clear that we do not support the employers’ proposal to exclude new employees from accruing decent final salary pension benefits as this will in the long term have a negative effect on the funding of the new section. We also believe that by not allowing non-protected members the opportunity to consider transferring their past service benefits from the ECML section into the HRS section is unfair and unjust.
The RMT also has concerns in respect of the contribution rate which transferring members will have to pay if they join the HRE section. Generally members working for Train Operating Companies (TOCs) will pay lower contributions due to relevant employers covenant strength, however, as the HRE is unlikely to be given the same covenant rating as a TOC this is likely to mean that members could be paying more in contributions.
We also believe that this TUPE transfer of almost 17% of active members presently contributing into the ECML Pension Scheme will have a negative effect on the future funding of this section simply because there will be less money flowing through section.
I can advice you that I have written to LNER and HSE management as well as the Chairman of the RPS Trustee outlining this union’s concerns and will report back to you accordingly.