RPS Railway Pension SchemeWhich section of the Railway Pension scheme does this refer to? Ie which company?
RPS Railway Pension Scheme
GTR - it will impact Drivers, Engineers, Station staff, Cleaners and every employee on the pension scheme.
I don't know how many TOC's are part of this pension scheme but it will effect them if they are, I'm sure this goes wider than just GTR.
You can do 40 years full pension, but will lose 6% for every year you retire before the age of 62
Thank you very much Bald Rick, very in depth reply, lots of thing for me to think about and consider, your response was very helpful.Scheme rules vary by section - ie the employer that arranged the pension. This change will (probably) apply only to members in that section. For example I imagine that staff on ex Southern terms and conditions may be in a different part of the pension scheme than those those ex FCC.
The proposal appears to defer pension age by two years. This will be being proposed in order to help make good a deficit in the scheme. There are other ways of doing this, for example by raising the contributions of both employee and employer, or by limiting the pension benefit in some way (typically by changing what constitutes ‘final salary’, or deferring retirement age for new and/or existing members). As an example, to close the deficit in the NR defined benefit scheme all of these have been done over the past decade, except deferral for existing members.
Two important points in your case, both enshrined in law.
1) this does not apply to those who entered the pension scheme before 5/11/93
2) the trustees of the pension, and/or the company must consult on a proposal such as this. The consultation must be with all people affected (ie people in the pension scheme), and their representatives (the unions). The consultation must last at least 60 days.
If this consultation has been done and closed, and this is the confirmed proposal, there’s nothing you can do to change it, assuming the consultation was conducted within the appropriate regulations. You might want to ask your union how they responded to the consultation, and ask them to check that it was conducted properly. It is not unknown for unions to not fully understand pension changes and accept them without much challenge. It is relatively unknown for pension trustees to make changes outside the law, but it does happen.
If this is a proposal out for consultation now, I recommend talking to your union, and if they don’t know much, potentially seek independent pension advice to enable you to respond to the consultation. Be aware that one pension member responding is unlikely to sway a decision on this, and it will be far better to have an organised collective response with professional advice.
In any response you will need to ask for, or demonstrate, alternatives to help close the deficit. The consultation should have considered these. For example changes could be made to new entrants only - perhaps extending pension age to 65, or requiring 5 years service before joining the final salary scheme (both happened in NR in 2012). This protects existing members whilst making them worse than otherwise for those yet to join.
Please consider all of this as information, and not professional advice.
The TOC I work for had this change imposed on the non protected staff, we had no consultation on this matter. We signed up to a scheme enabling retirement at 60 then we had the same change as this imposed on us changing the age to 62.
There are final salary sections that are not only allowing continued contributions, but which are open to new entrants - quite how long that will continue is a good question!Other changes were percentage changes for early retirement, and the loss of 'Final Salary'.
E.g. A person could no longer gain promotion to a Manager and have their whole service pension increased as if their entire employment had been as a manager at the higher salary throughout.
A cap was put on the Whole Service element with anything extra added for future service only as a restructuring premium.
Please look at the attached photo,
What are your thoughts on this?
There are final salary sections that are not only allowing continued contributions, but which are open to new entrants - quite how long that will continue is a good question!
I'm not surprised by people not knowing these things have changed. Even the Financial Times published an article last year on how costly the Railway Pension Scheme was, citing all the archaic (in their eyes) gold platedness of it - specifically citing all three things:
•Retiring at 60
•Final salary
•Generous early retirement
Completely failing to keep up to date and understand that actually, ALL those things had changed.
Some may think this is an indefensible right, but in law it is merely an indefeasible rightThose who were in the pension scheme before 5/11/93, and have remained in it, have ‘indefensible rights’ to the pension as full final salary and retirement based on column A in the table shown in the OP.
For example, people in the NR scheme who joined between 1994-2012 have a retirement age of 60, but since 2012 any increases in pensionable pay has been limited to, initially RPI+0.5%, and since 2016, RPI. (Pay rises above that level due to promotion are counted only for future service - in effect an average earnings scheme).
Some may think this is an indefensible right, but in law it is merely an indefeasible right
Yes I remember attending an NR Briefing by a senior manager who after having presented details of changes to arrangements, contributions, etc with lots of graphs and charts was floored by someone asking "So basically you have just announced a change from "Final Salary" to "Career Average""
Please look at the attached photo,
What are your thoughts on this?
It was put up in our mess room, I am unsure where the table came from but I can confirm the figures are correct.Hi, can I ask where the photo was taken from? Or do you know where I can find that table? Thanks.
It was put up in our mess room, I am unsure where the table came from but I can confirm the figures are correct.
Statement from RMT regarding this change to the pension.
GOVIA THAMESLINK RAILWAYS SECTIONS
www.rmt.org.uk
Pensions Act 2014 - Ending Of Contracting-Out
www.rmt.org.uk
Except they haven’t changed, for some people.
Those who were in the pension scheme before 5/11/93, and have remained in it, have ‘indefeasible rights’ to the pension as full final salary and retirement based on column A in the table shown in the OP.
The table with Early Retirement Factors (ERFs, the percentage reduction if you take your pension early) is available in chapter 11 of the member guide to each section of the RPS.Hi, can I ask where the photo was taken from? Or do you know where I can find that table? Thanks.
This was very helpful, I didn't know I could be in more than one column.One th8ng I omitted to mention earlier.
The changes only apply to future service, future being defined as all benefits accrued after the changes took effect in 2016. Benefits accrued before then are protected as they were before the date.
To make the maths simple, if someone entered the pension scheme in 2006, and worked 20 years, and stayed in the same grade with pay rises in line with RPI, half of their pension would be based on ‘Column A’ and half on ‘Column C’. So if they elected to take their pension at 60, they would get 100% of half of it, and 88% of the other half, as that second half (only) has a retirement age of 62. Ie they would get 94% of the pension.
In reality, the maths is more complex due to people getting promoted through their career etc.
But, the most important thing to say is that this is not losing ‘a ‘substantional amount of your pension fund’, which implies someone is taking away money you already have. It’s a reduction in benefits paid out from future contributions.