RMT Briefing Note
THE RIGHT TO JOIN THE TFL PENSION FUND
As a result of Government legislation, in the form of the Pensions Act 2008, all employers will be responsible for automatically enrolling employees who are not currently saving for their retirement into a pension arrangement.
This legislation became active on the 1st October 2012 with the largest of employers being the first to auto enrol ‘eligible’ workers (Jobholders) into a ‘qualifying’ workplace pension scheme. Along with the responsibility employers will also be obligated to make pension contributions.
Employers will have a date when they have to auto enrol employees and in the case of Transport for London (TFL) the ‘staging date’ was 1st March 2013. However, as a result of Public-Private Partnership Agreements (PPP) in the late nineties and subsequently the outsourcing of parts of London Underground (LUL), those employers carrying out traditional LUL work will also have to auto enrol employees into a ‘qualifying’ occupational pension scheme.
While the majority of TfL employees will be Auto Enrolled into the TfL Pension Fund the RMT believe that workers who now carry out traditional LUL work or are now employed by franchise contractors should also be allowed to join this pension scheme. This point is particularly relevant to those workers formally employed by Tube Lines and Metronet.
While the pension scheme to be offered to the majority employees directly working for TfL will be the Defined Benefit Transport for London Pension Fund (TfLPF), for those workers who are not employed by TfL the likely pension scheme to be offered will be an inferior Money Purchase, Defined Contribution arrangement.
The RMT’s argument is that TfL pay other employers to carryout work which was formally ‘in-house’ and therefore why shouldn’t workers employed by these companies be offered membership of the TfLPF. Surely it makes sense that if more employees join the TfLPF and therefore more money is going into the scheme, the greater the long term security of the fund.
The RMT are committed in ensuring that all members have the opportunity to have the best retirement provision in place and that all workers regardless of whether they work directly for TfL or are employed by a auxiliary employer are allowed to join the TfLPF.
I urge all TfLPF members to support the requisition of an Extraordinary General Meeting.
TFL PENSION FUND - SUSPENSION OF TRANSFERS IN
In April 2010 TfL Trustee Board agreed to suspend for three years the right of scheme members to transfer in benefits from former employers or personal pensions into the TfL Pension Fund following a request from the principle employer. This decision was taken as a result of the significant deficit in the fund as highlighted by the 2009 Triennial Actuarial Valuation results.
While the 2012 valuation still illustrates a deficit, the shortfall has improved. However, following another request from the principle employer the trustees have again agreed by majority to suspend transfers in for a further three years.
Following a resolution (see below) submitted by the London Transport Regional Council requesting an Extraordinary General Meeting in opposition to the decision made by the trustees, the RMT General Grades Committee adopted the motion.
“This Regional Council calls on the General Grades Committee to mount a campaign against Transport for London Pension Fund decision to suspend ‘transfers in’ to the fund.
This policy was suspended three years ago and has been extended for a further three years from 2013. We feel this is a rule change by the back door and creates a very dangerous precedent.
We call on the General Secretary to arrange a meeting with all RMT Pension Councillors and representatives of each branch with members in the fund. This meeting should discuss this campaign and plan organization of a Special (Extraordinary) General meeting of pension fund members to oppose this back door change.”
The RMT believe that management are taking advantage of the present pension climate to continue to suspend transfer in. While it is recognised that the TfL Pension Fund is still in deficit the fact is the shortfall has reduced significantly. As the above resolution stipulates management are changing the rules of the fund via the backdoor.
There are no doubt scheme members who have been waiting patiently for three years to transfer their deferred benefits from other pension sources into the TfL Pension Fund and will no doubt see this move by management as a ‘kick in the teeth’.This suspension is quite clearly management’s underhanded way of taking away the ability of members to transfer in external pension benefits and should be opposed before other possible benefits are also eroded.