FREIGHTLINER SECTION OF THE RAILWAYS PENSION SCHEME (RPS)

11th January 2019

 

Dear Colleague,

 

FREIGHTLINER SECTION OF THE RAILWAYS PENSION SCHEME (RPS)

 

Further to my letter of 21st December 2018 I would advise you that it is the intention of the RMT to ballot its members working for Freightliner Heavy Haul and Freightliner Limited for industrial action as a result of management’s unnecessary and obnoxious attack on your future pension rights.

 

I would remind you that management’s proposal is that:

 

  1. Existing employees who have not yet joined the RPS to have the opportunity to join the Freightliner section of the RPS which will run until 28th February 2019. If they do not join the section by this date they will then have a one off opportunity to join on 1st April after completing 5 years continuous company service. Those with more than 5 years company service will not be permitted the opportunity to join this section of the RPS.

 

  1. New employees will not be permitted to join the RPS until they have completed 5 years continuous company service unless they are beginning their employment with Freightliner directly after leaving another railways employer and were already an active member of the RPS.

 

Following a meeting with management on 7th January 2019, where we again made it clear that these proposals are totally unacceptable, management are still intent on ploughing ahead with their plan to force new employees in to an inferior pension arrangement.

 

Management have stated that they need to make these changes now because of increasing pension costs so that they remain commercially competitive. We believe this to be nothing more than a smokescreen to increase the profitability of the business at the expense of their employees.

 

As you will no doubt be aware every three years the Freightliner Pension Scheme has to be valued and the contribution rates going forward agreed. The contribution rates for the last valuation in 2016 have been agreed. Therefore if management were so concerned about the future cost of the pension scheme then why did they agree to the current Schedule of Contributions?

 

Management have also said they are concerned about the risk the increasing pension liabilities are placing on the business.  While it may be true that the liabilities are increasing, the fact is that the Freightliner section of the RPS is a well funded section of the RPS. Currently the section is over 100% funded which means technically it has a surplus.

 

I would add that we have not come across any employer making such a proposal between valuations. This is not only unusual but breaks any trust we may have had with management when comes to future valuation agreements.

 

I need to remind you that this positive funding level is as much to do with the changes which were made in 2018, in respect of the introduction of a CPI pensionable pay cap. Therefore you the members have helped put your pension scheme in a positive position.

 

Management want you to believe that because many other employers in UK have closed their DB pension schemes that it somehow right that they should make this type of proposal. This is not the case. The vast majority of railway employers in the UK continue to operate affordable and decent DB pension schemes through the Railway Pension Scheme and are committed to ensuring that their employees continue to benefit from such arrangements. We must not allow management to initiate a race to the bottom.

 

We believe that management want to ultimately eliminate their pension risk by forcing new employees into some inferior pension arrangement. It is our view that if management are allowed to get away with this proposal they will at some point soon want to close the Freightliner section of the RPS to new entrants.

 

Therefore because of the RPS is Shared Cost, where you pay 40% of the past and future costs and Freightliner pay 60%, this proposal if implemented would be nothing more than a disaster for members as in our experience once a pension scheme is closed to new employees or fewer members join the funding level will go down which will result in contributions increasing for members. This could potentially lead to member leaving the pension scheme as the section becomes unaffordable.  This has happened with the infrastructure engineering companies where schemes have been closed to new entrants.

 

The RMT and our sister unions believe that our members need to be fully informed of management’s proposals and the consequences of them. We would therefore like to invite you to a Pension Meeting where Regional Organiser Daren Ireland and/or Assistant General Secretary Mick Lynch will be presenting the RMT’s views on the proposals and explaining why you need to vote yes for strike action when your ballot paper arrives.

 

Because pensions can often be a complex subject I would urge you and your work colleagues to attend one of the meetings below:

 

Where: Manchester, Copthorne Hotel, Clippers Quay, M50 3SN

When: Monday 14th January 2019 at 15:30 until 18:00

This meeting will also be attended by the ASLEF Trade Union

 

Where: Liverpool, New Wellington Public House, 31 Wellington Street, Garston, L19 2LX

When: Tuesday 15th January 2019 at 17:00 until 19:00

This meeting will also be attended by the ASLEF Trade Union

 

Where: Crewe, Waverley Hotel, 9 Pedley Street, Crewe CW2 7AA

When: Monday 21st January 2019 at 18:00 until 20:00

This meeting will also be attended by the ASLEF Trade Union

 

Further meetings will be held in Birmingham, Bristol, Cardiff, Coatbridge, Ipswich, Leeds (Ferrybridge) and Southampton. Dates and times to follow.

 

It is important that you recognise that while management may argue that their proposals will not impact on present members’ benefits or contributions this is not true. The facts are that the less contributing members in the Freightliner section of the RPS the bigger the risk on your future pension rights and contributions. This is your deferred pay so please come to a meeting and vote yes for strike action when you receive your ballot paper.

 

Yours sincerely,

 

 

 

Mick Cash

General Secretary