Network Rail shuts final salary pension to new entrants

17 August 2005

Network Rail who’s workers are represented by the RMT and TSSA is responding to pressures to cut cost by closing its final salary pension scheme to new entrants from March 2004.

 

The Rail, Maritime & Transport union says that Network Rail has been through lengthy discussion before making this decision “but they certainly never talked to us about it.”

 

“They say they are under pressure to save on costs, but attacking the security of loyal railway workers in their retirement is not the way to go about it” said Bob Crow, RMT, General Secretary.

 

“We hope Network Rail will review their decision, and we have sought urgent meetings with the company and with ministers”.

 

 

Shaun Brady, ASLEF General Secretary said in support that, “I understand the need for savings but not at the cost of the workers, this is a simple case of hitting the employees to achieve those goals”

 

“ASLEF has always argued that employers were not bemoaning the cost of Final Salary Schemes in the 90s when surpluses were the norm, and they should not be allowed to walk away from their responsibilities now”.

 

 

Final salary schemes are the most desirable type of pension for workers, because a defined payout is guaranteed and the risk that investments disappoint lies with the employer.

 

In so-called ‘defined contribution’, or ‘money purchase’, schemes, workers carry this risk, with the amount of pension they receive depending on how well their investments perform.

 

More than two-thirds of final salary schemes around the UK have been closed to new members in the past five years because companies are finding them too expensive.

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