Railway Pension Scheme Sustainable?

[choo~choo]

As so many non railway workers/pension members seem happy to spout about the non sustainability of the railway pension scheme, what do you guys think?

Personally I put the negativity down to jealousy

Discuss

 

[Nym]

...Deleted...

 

[choo~choo]

...Deleted...

Eh?????

 

[Nym]

Had something really deep to say about how private sector workers tend to be better paid in my trade than public sector ones, and they should quit moaning since the pention is the only good thing we have left.

Then realised I'm not part of the pention scheme you're on about.

 

[choo~choo]

Had something really deep to say about how private sector workers tend to be better paid in my trade than public sector ones, and they should quit moaning since the pention is the only good thing we have left.

Then realised I'm not part of the pention scheme you're on about.

lol

 

[Legzr1]

Had something really deep to say about how private sector workers tend to be better paid in my trade than public sector ones, and they should quit moaning since the pention is the only good thing we have left.

Then realised I'm not part of the pention scheme you're on about.

But it would have been a very fair comment!

I know of public sector workers with qualifications which would allow a 30% increase in salary in the private sector but have a very good pension.
In return, those in the private sector choose to spend that extra 30% then have the nerve to chastise public sector workers and their 'unfair' pensions !

Jealousy and 'trying to have it both' ways definitely springs to mind.

 

[E&W Lucas]

Jealousy and 'trying to have it both' ways definitely springs to mind.

Sadly, there are plenty of people out there who really want a career on the railway, but resort to jealousy of those that have, rather than taking a more positive view. Same as those with "driver envy" on the inside.

What outsiders probably don't realise, is the level of contribution now being required for the RPS.

 

[WestRiding]

there do seem to be a lot of envious people with regards to the railway pension. But, it is not as though we do not pay for it %age wise from our earnings. The other half works for the council, they went on strike some time ago because the council wanted to up their contributions a couple of percent, but still no where near to what I pay for my pension. It seems there are a lot of people who want a 'gold plated' pension to coin a phrase, but who do not want to pay for it. You cant pay little in to get a lot out.

 

[The Planner]

Will have to double check but Im sure the % of the your pay packet that NR members have to pay in is around the 11.5% mark.

 

[E&W Lucas]

Will have to double check but Im sure the % of the your pay packet that NR members have to pay in is around the 11.5% mark.

Upwards of £100 a week as a driver. We too have had to accept a couple of significant contribution increases.

 

[AntoniC]

I am a civil servant of 25 years service.

When I joined I didnt have to contribute to my pension and didnt have to start contributing till Apr 2012.

I currently pay approx £20.mth towards it and thats projected to rise to about £60/mth in 2015, thats based on me NOT earning over £21k in the future, which is unlikely as I dont want promotion and the proposed payrises (if any !) wont get me there.

Do I object to paying ? - no - as when I retire at 62 (after 40 years service), I will still get a pension based on 26.5 years on the old scheme (index linked etc) and 13.5 years on the new career average scheme.

I agree that changed need to be made but I am lucky that as an old fart with previous years service, it wont be to bad for me - its the new starters I fear for.

 

[tbtc]

What outsiders probably don't realise, is the level of contribution now being required for the RPS

I'd be interested in the exact figures, but the cost of an "old school" final salary scheme nowadays is going to be around 20/25% of salary.

Of the schemes still open to new members in the UK, some have higher costs (like the Fire scheme, due to the large numbers of Ill Health retirements, for understandable reasons), but I think 20% is probably about the minimum.

AFAIK there are no plans to amend the railway scheme to Career Average (in the way that Local Government/ Civil Service etc are going), happy to be corrected though.

 

[gordonthemoron]

BR pension was fully funded, however I believe John Major made off with the proceeds during Rail Privatisation in return for a guarantee that the government would pay future pension benefits from general taxation

 

[TDK]

I'd be interested in the exact figures, but the cost of an "old school" final salary scheme nowadays is going to be around 20/25% of salary.

Of the schemes still open to new members in the UK, some have higher costs (like the Fire scheme, due to the large numbers of Ill Health retirements, for understandable reasons), but I think 20% is probably about the minimum.

AFAIK there are no plans to amend the railway scheme to Career Average (in the way that Local Government/ Civil Service etc are going), happy to be corrected though.

I do believe the RPS guarantee 66% of final annual salary if you have carried out 40 years service or equivalent! Unless it has changed.

 

[W230]

I agree that changed need to be made but I am lucky that as an old fart with previous years service, it wont be to bad for me - its the new starters I fear for.

As a young fart I find it frustrating that these pensions have changed to require higher contributions but i'm also sadly accepting of the fact that the average life expectancy is going up all the time and that the system isn't sustainable at it's current rate without these contributions going up.

It's a sign of us all living happily ever after for that bit longer - I have no doubt in another however many years the same conversations will rear their heads and contributions will go up again. Just the way it is!

 

[Legzr1]

What outsiders probably don't realise, is the level of contribution now being required for the RPS.

Thankfully (for now!) it's all paid pre-tax.

Looking at the wider pension 'world' I have no issues with the level of contributions currently needed.

 

[Quickthorn]

With the RPS, can you make additional voluntary contributions in exchange for better benefits on retirement?

 

[Marklund]

Yes, BRASS.

NRs current levels of contribution to RPS60 is 9.36% from employee, 14.04% from employer.
There's also RPS65 for newer entrants to the scheme, whose contributions differ from RPS60.

 

[Latecomer]

Well in 2012 the LOROL (DB) section of the scheme was in good health:

"London Overground Rail Operations is set to reduce the level of employee contributions into its defined benefit (DB) final salary pension scheme.
This is possible because the DB scheme is in surplus, so it has more assets in its fund than it needs to meet its liabilities to pay current and future pensions.
The train operator is currently in consultation with staff and unions about reducing employer and employee contributions. Employee contributions could fall from 10.6% to 9.28% from July.
Under the scheme's structure, 40% of contributions are paid by employees and 60% by London Overground Rail Operations.
Darren Hockaday, HR director at London Overground Rail Operations, said: "Although [the contributions] are coming down, they are not coming down as much as we could afford.
"We are keeping a buffer of slightly more contributions, which is seen as a very good compromise with our trade union colleagues. This was what the business was proposing to do, in terms of having the right balance between keeping the scheme affordable."

There's probably about £1000 a month going in for drivers when employer and employe contributions are combined. Couple this with salary sacrifice, etc and it is probably one of the few final salary schemes still in good health. It benefits those in the rail industry on lower income too so it upholds good values. Remember as well that ill health will often terminate a drivers career before many other positions due to the need to meet certain medical standards.

 

[Donny Dave]

it is probably one of the few final salary schemes still in good health.

It's probably in good health because DB have appointed a good fund management company to oversee the scheme.

 

[E&W Lucas]

Thankfully (for now!) it's all paid pre-tax.

Looking at the wider pension 'world' I have no issues with the level of contributions currently needed.

Spot on Brother, but I'm looking at making other provision as well, separate from the RPS. Just in case we have any more government interference!