Colas Rail Pension Valuation
To: The Secretary All Branches & Regional Councils
COLAS RAIL SECTION OF THE RAILWAYS PENSION SCHEME – 2013 ACTUARIAL VALUATION
I refer to Circular NP/050/15, 25th March 2015, our representatives met with management on 11th September to discuss the Colas Rail Pension Scheme proposal. It was made clear by the RMT once again to management that the employer was mainly responsible for the large deficit in the scheme and that they had a duty to help make the fund affordable for members.
While management were reluctant to accept they were responsible for the shortfall they did agree that they would consider taking some of the deficit correction payments away from members of the scheme. However, it was unlikely that member contribution would be below 20%.
It was also suggested by the RMT that a cap on member contributions should be introduced to protect active member from seeing their contributions becoming unaffordable in the future.
Management agreed they would go away and consider the RMT’s proposals and respond accordingly.
Please find below managements amended proposal:
- Member contribution to increase from 15.68% to 20.68% minus salary sacrifice savings 18.5% approximately
- Employer contributions to remain at 23.52% but Colas Rail to make 12 lump sum payments of £1.7m pa
- Member deficit correction contributions to be capped at a maximum of 11%
The General Grades Committee in consideration of this proposal on 20th October 2015 adopted the following report:
“We note that that following a meeting with RMT representatives’ on 11th September, management have formally proposed to cap member’s future deficit correction payments. This will result in the employer making additional lump sum payments into the fund to reduce the shortfall now and in the future.
While it is noted that the member contribution rate will be in the region of 18.5%, it is recognised that before the discussions with our representatives the member contribution rate was set to increase from 15.68% to 35.8%.
These proposals can be found on file with the enhanced Defined Contribution scheme management have also proposed in the event members are unable to afford the contribution rate mentioned above. It is noted that the employer is also offering financial advice for members.
In light of the progress our representatives have made we instruct the General Secretary to inform management of our acceptance of their revised proposals.
Branches and Regional Councils to be informed.”
I will keep you informed of any developments.