DB Cargo to close Railway Pension Scheme (Final Salary) to new starters!

saracen · 5 Mar 2019

https://www.tssa.org.uk/en/Your-uni...C8s7mRC3hj7vRkW0tcUdyI9uVrfScP7O5wwBn8JRiMTBk

DB Cargo have a significant deficit in their section of the RPS (Railways Pension Scheme), around £257 million to be precise! This deficit has come about through various means, mostly though by bad investment choices which resulted in low returns.

We could continue to argue forever about whose fault this is and apply blame about how DB Cargo allowed this deficit to get so big, but that would not solve the situation. Of course, the trade unions demanded that DB Cargo rectify the deficit by injecting £257m into the scheme which is needed to plug the gap, but that would probably just bankrupt them! So unfortunately, we are where we are, and our priority now has to be about protecting our members pension funds and ensuring there is a pension scheme going forwards. The situation with the RPS section cannot continue, and DB Cargo have to make changes in which to both address the deficit and continue to provide pension schemes for staff...

A huge shame. Their pension deficit is £257 million in the red.

Something to bare in mind when applying

RailUK Forums

Atishyou · 6 Mar 2019

saracen said:
https://www.tssa.org.uk/en/Your-uni...C8s7mRC3hj7vRkW0tcUdyI9uVrfScP7O5wwBn8JRiMTBk

A huge shame. Their pension deficit is £257 million in the red.

Something to bare in mind when applying

Something to bear in mind?

That you'll not be able to join a closed scheme in deficit?

Mag_seven · 6 Mar 2019

Slowly but surely hard fought for rights, like a decent pension for all, are being eroded away whilst those at the top remain unscathed.

Tom Quinne · 6 Mar 2019

Exactly, I’m sure the board won’t be worrying if they can afford to retire at 65-70 years old!

After 40 years of destroying your body a decent pension is the least you can look forward to !

Jonfun · 6 Mar 2019

Where's the accountability for those in charge who allowed it to happen? And why are the trade unions just rolling over and letting them make such an outrageous attack on the pensions?

Bletchleyite · 6 Mar 2019

Final salary pensions are unsustainable - they are basically a pyramid scheme. They require a continuous growth in both workforce and salaries to work. They are near enough dead in the private sector as a whole, and so this is not surprising and is definitely not something to be striking about given that they haven't unlike many private sector employers done anything to those who are currently contractually entitled to it.

GLENMAYE77 · 6 Mar 2019

Will that mean the scheme is closed now or from when they chose a new scheme to offer?

pdeaves · 6 Mar 2019

GLENMAYE77 said:
Will that mean the scheme is closed now or from when they chose a new scheme to offer?

If the scheme is closed to new starters there will be an alternative in place for those self-same new starters.

Meole · 6 Mar 2019

There has to be scheme provision by law.

big all · 6 Mar 2019

a lot off the problem for years has been holding interest rates artificially low so your assets loose perhaps 5% a year in income which over 8-10 years can reduce your "pot" by say 20-30%
six years ago i had a 30k lump sum and a modest railway pension and worked out if i could get 8% my lump sum would give enough return to suppliment my pension without loss off capital
now didnt expect that amount but hoped for perhaps 3 or 4 % with the actual average being around 2% i am now down to 5k
now perhaps 3k-5k on top is money i didnt have to spend but hey lives for having fun and helping others

but anyway the point is 6% on 30k is £1'800 not going into the coffers a year to cover the £2'600 a year i had average that i needed[£50 a week]

AntoniC · 6 Mar 2019

I`m a Civil Servant of 30 years service, we had our final salary scheme closed in 2016 and replaced with a career average scheme, which surprisingly is worse for me.
Its worse for me as I now have to contribute to my pension scheme, something I hadnt had to do before - and I actually agree with this as I had 29 1/2 years of NOT having to contribute previously.
As others have said we are now in a race to the bottom.

Tom Quinne · 6 Mar 2019

There does seem to be a attitude of that you take the bottom and drag everyone else down to that level, seems to be driven by the green eyes monster is some cases.

Cavan · 6 Mar 2019

You only got your cs classic contributions back on retirement if you were not married.

AntoniC said:
I`m a Civil Servant of 30 years service, we had our final salary scheme closed in 2016 and replaced with a career average scheme, which surprisingly is worse for me.
Its worse for me as I now have to contribute to my pension scheme, something I hadnt had to do before - and I actually agree with this as I had 29 1/2 years of NOT having to contribute previously.
As others have said we are now in a race to the bottom.

GLENMAYE77 · 6 Mar 2019

pdeaves said:
If the scheme is closed to new starters there will be an alternative in place for those self-same new starters.

Just thinking as that article didn’t state any new scheme had been decided on so was presuming the old scheme would have to run until a new one had been decided on for nomes starters.

AntoniC · 6 Mar 2019

Cavan said:
You only got your cs classic contributions back on retirement if you were not married.

Thats wrong,
If I do my 40 years service , I will get a pension based on 29 1/2 years based on the Classic Pension Scheme and 10 1/2 years under the new Alpha Scheme.
I will get a refund on my Widows & Orphans contributions when I retire, provided I am still single at retirement BUT I wont get a full refund.
(I expect this entitlement to be removed at some point , as it costs money and its a benefit to me).

zoo · 6 Mar 2019

Will the new starters still get into the final salary scheme before the consultation period

pdeaves · 6 Mar 2019

zoo said:
Will the new starters still get into the final salary scheme before the consultation period

Does there even need to be a consultation period? It won't affect existing members and for those just joining, today or in the future, the scheme will be 'all there is' and they won't know anything different.

train_lover · 6 Mar 2019

I'm curious to know how this will affect anyone currently in the final salary RPS with another TOC who is moving over to DB Cargo?

Cavan · 6 Mar 2019

train_lover said:
I'm curious to know how this will affect anyone currently in the final salary RPS with another TOC who is moving over to DB Cargo?

Something that anyone in the RPS should get clear information on before taking a job (same with all pensions)

Stigy · 6 Mar 2019

GLENMAYE77 said:
Just thinking as that article didn’t state any new scheme had been decided on so was presuming the old scheme would have to run until a new one had been decided on for nomes starters.

My TOC has two schemes (albeit of the same sort of ilk I guess?). We were all automatically transferred to the new scheme when it was introduced, but could opt out and continue in the previous one if we desired. I took the new one because I pay less but get more out (apparently.....I’ll find out for sure in about 25-years I guess :lol:

).

I wonder what happens with DB to anyone wanting to transfer from their section of the RPS should they be recruited by them? I’m assuming this will apply to ALL new starters, even if already part of the scheme?

gazthomas · 6 Mar 2019

Bletchleyite said:
Final salary pensions are unsustainable - they are basically a pyramid scheme. They require a continuous growth in both workforce and salaries to work. They are near enough dead in the private sector as a whole, and so this is not surprising and is definitely not something to be striking about given that they haven't unlike many private sector employers done anything to those who are currently contractually entitled to it.

Spot on

DuncanS · 6 Mar 2019

AntoniC said:
I`m a Civil Servant of 30 years service, we had our final salary scheme closed in 2016 and replaced with a career average scheme, which surprisingly is worse for me.
Its worse for me as I now have to contribute to my pension scheme, something I hadnt had to do before - and I actually agree with this as I had 29 1/2 years of NOT having to contribute previously.

BLIMEY!!!
I'm late 40s and have always had to contribute to my pension.

Meole · 6 Mar 2019

AntoniC said:
I`m a Civil Servant of 30 years service, we had our final salary scheme closed in 2016 and replaced with a career average scheme, which surprisingly is worse for me.
Its worse for me as I now have to contribute to my pension scheme, something I hadnt had to do before - and I actually agree with this as I had 29 1/2 years of NOT having to contribute previously.
As others have said we are now in a race to the bottom.

Your comparative pay awards were always adjusted to reflect the pension capability so you did contribute albeit invisibly.

Meole · 6 Mar 2019

train_lover said:
I'm curious to know how this will affect anyone currently in the final salary RPS with another TOC who is moving over to DB Cargo?

A voluntary move would probably introduce to the current entry scheme at the new employer, i.e. non TUPE.

AntoniC · 6 Mar 2019

DuncanS said:
BLIMEY!!!
I'm late 40s and have always had to contribute to my pension.

They were the Terms & Condition when I joined back in 1988

MichaelAMW · 7 Mar 2019

Bletchleyite said:
Final salary pensions are unsustainable - they are basically a pyramid scheme. They require a continuous growth in both workforce and salaries to work. They are near enough dead in the private sector as a whole, and so this is not surprising and is definitely not something to be striking about given that they haven't unlike many private sector employers done anything to those who are currently contractually entitled to it.

I don't think that is entirely true, that they are unsustainable. It's just that they are really just a fancy savings scheme and if people are going to live much longer in retirement then they need to pay more in. There was a dispute involving teachers' pensions a while back and I looked at the news and thought that they just needed to appreciate that someone has to pay for it all, now that teachers don't drop dead in their sixties as - one is led to believe - they used to do. A final salary scheme is perfectly workable if everyone involved understands that the percentage paid each month out of pay has to be higher. I guess employers don't like them because it costs them more too, given that the contributions are usually shared between them and the workers.

Tom Quinne · 7 Mar 2019

Isn't it true though to a degree after 40 years of shift work you'll probably not see many years after 70 anyway, so Railway final salary schemes are probably much more sustainable than other normal working hours jobs.

DB Cargo to close Railway Pension Scheme (Final Salary) to new starters!

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