Friday ultimatum for pension peace plan

25 April 2006

The union has written to all companies with whom it has recognition about the rail industry pensions crisis. We have insisted on agreement on certain core issues which, if not resolved this week, will mean a trade dispute exists and that the union will activate a ballot for industrial action.

 

‘All the rail unions have sent a similar letter to employers,' Keith Norman says. ‘I cannot over-state how serious this issue is. We are facing the first national rail stoppage since our industry was privatised.

 

‘I sincerely hope we will see movement by companies and action by government in the remaining days before we reach Friday's deadline: but I have to say that, at this stage, I am by no means convinced that common sense will prevail.'

 

The text of the letter from the union to the employers is reproduced below. It

 

  • indicates our opposition to any raising of pension contributions (that is, opposition to effectively lowering our take-home pay)
  • insists that employee contributions do not exceed 10.56% - the amount agreed by the British Rail single pension fund.
  • argues that the 103 schemes that resulted from privatisation be abolished in favour of three schemes at most
  • demands that benefits remain at existing levels and
  • insists that all schemes be open for new recruits.

 

The full text of the letter is as follows:

 

I have written on behalf of members of ASLEF to various employers within the Railways Industry in recent months in relation to matters arising out of the actuarial valuation as at 31 December 2004.

 

Members of this union remain concerned at the deficits revealed in the majority of sections of the Railways Pension Scheme (“RPS”) by the recent actuarial valuation, which indicates a requirement for significant additional funding.

 

Members of this union are also concerned at the significant increases to employee contribution rates. Increased employee contributions lead to fewer employees participating in the RPS, resulting in a spiral of increasing contributions and reductions in membership.

 

In some Sections, the requirement for higher contributions is compounded by employers' decisions to close Sections to new entrants (see below), leading to a further increase to contribution rates of approximately 4%.

 

Members of this union are not prepared to allow this to occur and they seek your guarantee that the employee contribution rate for existing members of the scheme, and other current employees, will not exceed 10.56%, the rate previously payable in respect of the BR Pension Fund. .

 

At the same time, Members of this union also believe that employee contributions for the RPS would be lower but for the division of the RPS into numerous sections following privatisation.

 

Members of this union believe that the RPS should be streamlined into three sections: one for Train Operating Companies, one for Infrastructure/Engineering Companies and one Omnibus Section.

 

This would require an amendment to the trust deed governing the RPS and also to the rules governing the various Sections of the RPS. Your company (and the other companies) is asked to undertake that you will demand and ensure that the trust deed governing the RPS, and the rules governing the various Sections for which each employer is responsible, are amended in this way.

 

Members of this union are also concerned that employers are denying the relevant Section of the RPS to existing employees by declaring that their section of the RPS is closed to current employees who are not already active members. Your company is therefore required to undertake that, if it has closed entry to the RPS, it will forthwith re-open it; and, if entry has not been closed, that the company will not close entry to it and will ensure that all current employees are able, if they so wish, to participate in the relevant Section of the RPS.

 

It is obvious that it may be proposed that the deficit revealed by the current actuarial valuation might be met by reducing the level of benefits payable under the RPS. Accordingly, Members of this union also require a further assurance that your company will not propose, agree or take any step towards, and indeed will ensure that there will be no, reduction in the level of benefits payable under the RPS.

 

In short, Members of this union now seek the unconditional undertaking of your company to all four of the matters set out below:

 

(1) Your company will demand and ensure that the employee contributions to the RPS will be capped at 10.56%;

 

(2) Your company will demand and ensure that the trust deed governing the RPS, and the rules governing the various Sections for which each employer is responsible, are amended to create only three active Sections: Train Operating Company Section, Engineering and Infrastructure Section and Omnibus Section;

 

(3) Your company will ensure that there will be no reduction in the level of benefits payable under the RPS; and

 

(4) Your company, if it has closed entry to the RPS, will forthwith re-open it; and, if entry has not been closed, that the company will not close entry to it and will ensure that all current employees are able, if they so wish, to participate in the relevant Section of the RPS.

 

The Company's unconditional undertaking on all four of the above demands is sought by 4pm on 28 April. We need to be clear that, in order to resolve matters, the union needs to receive your unconditional undertaking on all four matters. If the company's unconditional undertaking on all four matters is not received by 4pm on 28 April, a trade dispute will exist between members of this union and the company and a ballot for industrial action will follow.

 

For your information, the union is making demands in the same terms of all employers in the Railway Industry.

 

Yours sincerely

 

 

Keith Norman

 

General Secretary

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