NATS PENSION - IN DANGER?!

[donnie31]

Apparently the Airline Group ( owners of NATS) have agreed, with our unions, a pensions contribution holiday for themselves.
This is very disturbing as the NATS staff trustees are not in favour of this idea.
To summarise (a lot).......
They are concerned that at the end of this "holiday" period the likely contribution from AG will be about 30%, which is not likely to be realisable.
Under the rules, if this occurred, it would then behove the trustees to wind up the non-viable scheme and thereby allow the employers the easy and legal way out of pension contributions!
JUST WHO DOES OUR UNION REPRESENT?? :mad:

[Findo]

Apparently .... your information is interesting but in my humble experience our Union represents US and has done so well over the years. They were the ones who lobbied hard in Parliament and had the legislation framed so that we could remain in a joint pension scheme - which is one of the best in the industry. Although the conjecture is alarming I would be content to judge the actions of all sides when the information is published. :rolleyes: :rolleyes:

[ 21 November 2001: Message edited by: Findo ]

[28right]

Traffic info is correct. Our TU Pensions Committee representatives seem to be about [ within 48hrs] to agree a deal with the NATS management that would give the company a 'Contributions Holiday' for 3 years and then 18 months at a very reduced rate. After which in order to meet the fund requirements for laibilities the employers contribution would have to rise to 30% [ actuarial advice]. I doubt that any employer would agree to a contribution rate of that level. The member trustees have advised the TU reps not to agree the deal. The latter appeared to have decided to ignore the advice of our Member Trustees, a situation that has never occurred before.
I suggest that all NATS staff should be urgently seeking answers from their TU reps as to why the Member trustee advice has been ignored on this occasion.

[The Truth]

What worries me about this Pension "holiday" is that appears to be based on the surplus identified in the fund at the actuarial valuation - earlier this year? Since September 11th, stock markets have taken a big hit and so have investors in them - namely pension funds. How much of the surplus has been wiped out? does ANYONE (including the trustees) know for SURE?

[BuzzLightyear]

I can feel the "S" word about to rise again....

[Warped Factor]

Saw a letter relating to this at LATCC last night. It made grim reading to say the least.

Trafficinfo and 28right have surmised its contents accurately.

This is bad news......

WF.

[Undercover]

Pensions holiday season is coming then...

On the question of the size of the surplus due to stock market fluctuations, there was a huge dip after Sept 11 but then a recovery.
As far as I am aware TAG are entitled to use some of the surplus for a contributions holiday, BUT by the same rights that give them control of the surplus, they are also legally obliged to ensure the fund remains viable.
I find the idea of TU & Trustees agreeing to a deal that would compromise all our pensions in the future very hard to believe.

[PA7]

TAG have been speaking to the union with regards to taking a payment holiday, what makes it worse is that there is now no surplus on the pension, that is what we were told earlier this month. Hopefully someone has been playing with the figures to keep TAG's and Blairs fingers out of the pie. Aint PPP great :mad:

[vertigo]

Why are the union ignoring the trustees advice ?

[Euroc5175]

There was also mention in the e-mail about an increase in pension benefits for members....but can't recall the details without having the e-mail to hand :(

[Findo]

Bono - a few assumptions there about the union being able to "agree" anything about the NATS contributions. Maybe the trustees will confirm it, but I think each contributor representative can act independently.

In the meantime, as I said before - "Although the conjecture is alarming I would be content to judge the actions of all sides when the information is published."


We wait with interest.

[Undercover]

I don't think it's a case of anyone agreeing to let TAG do something... I think there is an agreement made between the sides on what to do with a surplus. The TU gets some of it's requests granted and so do management.
We get increased benefits, they get to stop making payments into the scheme for a while.
To me it seems no more of a threat than the last time the employers contribution rate was reduced. The only difference is this in a temporary saving.
Don't forget that those negotiating on the TU side have a pension due to them too. Do you think they'd put it at risk?

[Goldfish Watcher]

Heard on 'working lunch' today that a lot of companies are pulling out of 'final salary' pensions because they are too expensive.

Im not normally one to subscribe to rumour and speculation (so why am I on this BB?), but I wonder if the pension holiday is just the first step in a move by TAG to change our pensions to an investment type...

Just a thought........

[surface wind]

This is all very disturbing. The bit that really frightens me is that IPMS are going against the trustees advice. Surely we all should be up in arms? :mad: :mad:

[Steep Approach]

The whole thing stinks, we are being shafted and the process appears to be being done behind our backs. TAG clearly wants out of our expensive "Rolls-Royce" pension fund and quickly. This isn't a pensions holiday but a pensions bail out all to be conveniently blamed on September 11th. What does the union think it is doing that represents the staff??

Moneybox live on Radio 4 at 8pm Monday 26 November has a pensions special where it will be discussing the flood of companies desparate to opt out of final salary pension schemes and into stock market based pensions. Listen and be scared, be very scared.

[ 23 November 2001: Message edited by: Steep Approach ]

[Undercover]

Sorry folks, but I think some here are trying to paint this blacker than it is.
The act of parliament that allowed PPP protected our pension - it cannot be altered so easily.
The figures show that by taking a 3 year contributions holiday, TAG are saving about as much money as it is costing to implement the improvements to the scheme that were asked for. You have to accept it can't all be take take take.
All those involved in the negotiations seem to be happy that the agreed moves will not threaten the scheme in the future.
The basic mistake we (myself included) sometimes make is to assume that as it's our pension fund, then any surplus belongs to us. It doesn't.

[Bono Vox]

oh dear, haven't 'xactly mastered the "italics" function yet, have i?

[Steep Approach]

Well I hope your right BV. I'll remain sceptical until I have an official briefing :D

WRT the holiday, can someone tell me, If the employer does not contribute, do the staff continue to contribute?

[donnie31]

I must say I have read this all with interest...however let us be aware that all private companies would prefer to get out of final salary pension schemes.
There will be a greater demand on our pension "surplus" as not only are we approaching a retirement bulge, but also more people are retiring early.
Add to this those that will be made redundant before they reach normal retirement age and the numbers start to rise quickly. The fund has done well but I think that any pensions holiday should be deferred for some time (1 year?) until we see how the economy pans out. Yres, TAG are entitled to this "holiday" but the timing could be better.
Will the 6 monthly review have actuarial advice? I wonder....... :confused:

[Rage]

For those interested here are the comments of one of the Members Trustees to the Scheme.
As someone who once worked in the Pensions industry I'm extremely concerned by the proposed 'holiday' following the recent actuarial valuation and even more concerned that the Union has apparently agreed without consultation with the membership. One of the union committee members who was involved in discussions has a lot to gain by the introduction of 57ths or 58ths in the near future, a concession which is unsustainable in the long term.

NATS PENSION PROPOSALS – FACT SHEET AND COMMENTARY

I have produced the following fact sheet in order to provide information to NATS members of the CAA Pension Scheme (CAAPS) regarding the current proposals by NATS for an employer’s pension contribution holiday and some benefit improvements. These are to be paid for from the past service surplus, identified by the Scheme’s actuary at his 31 March 2001 valuation updated at 30 September to take account of investment market fluctuations during the intervening period. In view of these proposals the member Trustees of the CAA Pension Scheme are extremely concerned about the security of the future funding of the Pension Scheme, and I believe we have now reached a watershed in the life cycle of the Scheme.

Barry Gibbs (retired members’ Trustee) and myself sent e-mails to members of the Trade Unions Side of the NATS Pensions Committee, prior to its reconvened meeting on 13 November, reiterating our previously expressed views, endorsed by the other member Trustees, strongly advising the TUS against accepting either a contribution holiday or benefit improvements, at this point in time. Our reasons were contained in an earlier fact sheet, distributed to them at the Pensions Committee Meeting held on 19 October, which are highlighted by the following points:

1. The surplus being considered is the past service surplus, which takes no account of future service liabilities.

2. Following previous valuations the past service surplus has been used to meet future service liabilities before the residual (net surplus) has been considered for distribution.

3. Neither the employer nor the TUS has ever before suggested that the gross surplus should be the one open to negotiation, by the Pensions Committee, for distribution.

4. This will be the first time, within my memory, that the gross surplus is insufficient to meet future service liabilities. (Estimated deficit of £275.5m).

5. Although the Actuary says that, actuarially, Trustees need not take into account future service liabilities, I do not accept that this is either a sensible or prudent approach if we wish for the continuation of the Scheme in its present form.

6. At 31 March valuation, the employer’s contribution rate, in respect of future service, was calculated to be 30.5%. The past service surplus, of £563.3m at that time, could reduce this to 12.5% for an indefinite period. The agreed reduction of the employer contribution rate to 10.8% reduced this indefinite period to a period of just under 16 years.

7. At 30 September, the employer’s contribution rate, in respect of future service, was calculated to be 30.1%. The updated, lower, past service surplus, of £322.5m, could reduce this to 19.7% for an indefinite period. Maintaining the employer contribution rate of 10.8% reduced this indefinite period to 8.5 years only.

8. These calculations take no account of any benefit improvements.


9. If an employer’s contribution holiday is taken, and the original proposed benefit improvements introduced, the past service surplus will provide for 3 years employer's contribution holiday then 18 months at a 6% contribution rate. (Any variations to the benefit improvements will change these periods to a small extent).

10. At the end of this period the Actuary sees no likelihood, at the present time, of the employer being required to contribute at anything less than 30.1%, or 31.5% if the proposed benefit improvements are introduced. I do not believe that this contribution rate would be acceptable to any employer, or sustainable over any significant period of time.

11. Legal advice tells us that if NATS does not or could not pay the required contributions, the Trustees may be forced to wind up the NATS Section, in accordance with the provisions of the Statutory Instrument. As it would be the Trustees instigating this, NATS would not be in breach of Clause 3.1 of the Trust of Promise which would thus not give any protection.

12. The above points, plus consideration of the volatility of the financial markets and continuing uncertainty due to world events and economic consequences, together with suggestions by Bacon & Woodrow in their October 'Analysis' that "Trustees should be cautious about 'spending' any surplus shown in the valuation on, for example, contribution reductions or benefit improvements", and difficulties being experienced by other organisations having taken contribution holidays, lead me to the firm conclusion that the last thing we should be accepting is either a contribution holiday or benefit improvements.

At the Pensions Committee meeting on 13 November, the Trade Unions Side chose to ignore the advice given by the member Trustees, in their role as advisors to the Committee, and agreed to an employer’s contribution holiday for NATS, and a revised benefit improvement package.

I apologise for the length of this document but I believe NATS members of the CAAPS have the right to know the facts behind the proposal so that they may have the opportunity to express their views on the issue. Acceptance of these proposals, at this time, will, I believe, lead to the detriment of the Scheme and the future demise of the NATS Section of the CAAPS, as we know it.

GLOSSARY

Past service surplus – the excess of the actuarial value of assets over the actuarial value of the past service ongoing liabilities.

Past service ongoing liabilities – the present value of the benefits which members are entitled to, based on service completed to the valuation date and allowing for projected future increases to pay through to retirement or date of leaving service. It also includes the value of the benefits for members who have already left service i.e. pensioners and preserved pensions.

Future service liabilities – the present value of liabilities for active members in respect of service after the valuation.


:eek:

[Grasscutter]

:mad: The question I ask to all, if this action appears so wrong, why is it being allowed to happen at all :mad: :mad:

[terrain safe]

How can TUS accept this when we, the members, haven't been consulted or even informed that this is an option?

Don't the members of a pension fund have any say in the running of said fund?

Aren't we as shareholders also entitled to our views to be listened to and can't we call an extraordinary general meeting to discuss this and other burning issues and get Stephen Byers along to see that this could all be going for a ball of chalk?

Or is it going to happen again without us doing anything about it?

PROBABLY..............

{edited for (appall) (apae) bad spelling)

[ 23 November 2001: Message edited by: terrain safe ]

[Contact London 131.12]

Its all right people saying how can the union let this happen etc etc...

Unfortunately they don't have to ask our permission to do it anyway it is there right inlaw to do it... they informed the unions I believe you are either with us and talking about it or against us, in the first case we will review it every 6 months to see where we are at, in the latter its happening for six years end of story? (That I believe is basically how it was described to me anyway,may have misunderstood)

[Rage]

Contact London.

You're quite right to say that they can do it legally but they can also legally say we're going to freeze your pay for three years and you're either with us or against us! In the latter case I doubt reaction would be the same, although the long term financial could be less devastating! I thought that the one issue on which all members were prepared to undertake industrial action was that of our pension provision and so if we wouldn't put up with a pay freeze then why accept this unilateral holiday?

Having seen the TU circular on the issue it's apparent that the Past service Surplus reduced by 40% (from £563.3 million to £322.5 million) all by itself between 31 March and 30 September so why is it considered necessary to give it a further hand?

The TU side also quote the actuary as saying 'the question of future liability is not relevant'. Actuarially this may be correct but this assumes that TAG will honour their liability to make up any future deficit. Given that many large companies are now struggling with their pension burden I would suggest that this is questionable and they would look to closing the scheme to new members at the very least.

I think that the TU side may have seriously misjudged the situation but I hope I'm wrong. :(

[TheLizard]

Bono Vox,
Whilst Prospect may not have collectively learned the lesson of keeping members informed, some unit reps have - but there's one catch: I can't tell you what I don't know.

When there finally was some communication from the union Jedi Masters, I found it a bit patronising in tone and and did little to settle my fears. Nothing BA (sorry, TAG - I'll get that right one day) does or attempts to do will surprise me - after all, if they got away with something within BA, they'll get away with it with NATS - right?

I became a union rep to do the best for everyone at my unit, and everyone within NATS. That doesn't mean I'm going to accept the "everything's okay, stop behaving like children" e-mail as gospel - I don't like it, end of story. And if being a unit rep JUST means being a mouthpiece for the boys and girls at the top even when you don't agree - as many NATs managers had to be during the PPP run-up - then I resign.

This could run and run and run...

[Grasscutter]

Do I see a catch 22 situation here. Airlines ( including TAG ) allowed to keep but not use there runway slots, no airlines are being penalised for not using there runway slots. There are other airlines which would like to provide new services but cann't because no one is giving up viable runway slots.NATS revenue is way down because of all this, so TAG uses our pension surplus to save costs.

Why do I feel that TAG is winning both ways. :mad:

[hooplaa]

Much as it pains me to say this - but the Co is legally entitled to take a pensions holiday, you can't do diddly squat about it. The union has negotiated some benefits to the members, probably as a sweetener - but like I say, can't do anything about a holiday if the acctuaries say the fund can support it today.

[Harvey Wallbanger]

You're right that there is nothing that can be done about the company taking a pension holiday, except the Union could make their opposition to it clear, if that is what they think is the case. Obviously the Union has been negotiating some sweetener for the members but have they told anyone what they are up to? Not as far as I am aware. I for one would rather have been consulted about what is going on than read rumours in Private Eye. If the Trustees are against this (and they have managed the fund perfectly well for some time now) why are the Union so keen to go against their advice?

[Goldfish Watcher]

Hmm

After my last post, I read the memo circulating the ops room about this issue. I began to feel a little more positive..... But now I have had time to think - I'm not so sure.

First. PPP was supposed to bring fresh investment into NATS that the Government weren't prepared to provide. OK September 11th has changed a few things, but if there are to be massive savings from the company paying zero to the pension fund surely they should be making some investment too - not pocketing the savings.

The pension fund is ours too, why can't the pension holiday be shared? Company pays a little, we pay a little.

The improvement to 58ths seems good, but as it has already been said, this might be difficult to sustain. Great for the 'nearly deads' but what about us youngsters, still under 30 - what lies ahead?

I'm still not clear on the Unions view of this. Maybe they are happy. If not then it looks like Management have simply out negotiated the Union again. This begs the question -
"Who is negotiating on behalf of the Union"
If it's ATCO members, then do they really stand a chance negotiating with professional managers?

Just a thought

[ 26 November 2001: Message edited by: Goldfish Watcher ]

[Undercover]

Well the first point has to be that PPP was a terrible idea in the first place. How they argued that it would provide investment when the reality was that the company was landed with massive debts immediately on sale is beyond me. Sept 11th didn't cause these financial problems, only added to them.
As for using the money for investment... the savings they make will probably just about cover the interest payments on the debt!

I don't think the unions are happy with the idea of a pensions holiday - but when there is no way you can stop it what are you supposed to do?! The only thing the unions could do is to try and get as much as possible in return. Those who negotiate these deals are trained negotiators and so, with respect, are better skilled to deal with this than their ATCO members.

P.S. For those still unsure... The contribution holiday it for TAG/NATS only. Members contributions remain unchanged.

[Dan Dare]

Just because there is no legal reason why TAG can't pocket our pension surplus does not make it right!

This is yet another example of our Union ignoring our views. What is going on? Surely they should be our voice and should represent us, not just be nodding dogs for management :mad:

[Warped Factor]

Intersting snippet in the info that the union put out.....

Under previous accounting rules the pension fund would apparently currently be in deficit.

Using the new industry standard (creative?) accounting methods there is apparently a healthy surplus?

:confused:

WF.

[Kirk to Enterprise]

All sounds dodgy to me!

I assume this means only TAG take the holiday :cool: , not us too :eek: !

[information_alpha]

heard today that all negotiations have been suspended until a BEC meeting on (i think) the 4th December - watch this space... :confused:

[Steep Approach]

Perhaps the Unions have heard a little rumour that their Members may be a little concerned.

Now how could that be :mad: :eek:

[JuicyLucy]

Maybe if the unions had bothered to tell us what was going on BEFORE the management or the press they would have less of a problem with us bothersome members.....

[Harvey Wallbanger]

They may at last be listening but I haven't seen anything official from the Union about suspending negotiations. Obviously they still haven't mastered the communication bit yet :(

[hooplaa]

What does that mean for the art of negotiation!!
If the union had to ask permission of its members all the time to talk about things, we'd still be waiting for the 1990 pay negotiations to finish. Think on - they act under mandate from the members through Conference, give them some credit for ttaking time out to think about things.

Am I a member or not? Not necessarily so!! :eek:

[28right]

As they say it's a done deal. NATS have a 3 year pensions holiday. The members however keep paying at their usual rates. My fears are that in 3 years time plus the 18 months at the decalared reduced contributions rate for NATS, they will be unable/unwilling to pay their contributions at the required rate [ about 30%]. Then as the member trustees state, they would be obliged to close down the NATS section of the CAAPS and lo & behold staff will be offered by NATS a 'Money-purchase' pension scheme which will be infinitely inferior to the current scheme and definitely lesss costly for the employer. I hope that I am wrong.

The TU reps have obtained some member 'benefit improvements' the principal one of which is a change in the accrual rates from 59th's to 58th's, however if we lose the current pension scheme, in my books 58th's of nothing is no better than 59th's of the same.
I accept that NATS have the legal right to take a pension contributions 'holiday' [ something that has not happened before] but I fail to see why without member consultation and support the TU reps supported management, and I understand went against the advice of their executives and more fundamental ignored the advice of the member trustees. The latter body have ensured that over past years that the fund has remained healthy.
I suspect that the TU reps have been hoodwinked by their new access to NATS senior management and apparent involvement in company policy determination.
However on this issue, after 35 years in IPPCS/IPMS/Prospect, they have got it wrong.

All the external indicators are that the pensions industry is extremely volatile and now is not the time to make changes. Worldwide investment returns are plummeting, the ENRO collapse has cost investors and banks billions. I hope that the pension fund did not have any money invested there.

:confused:

[JuicyLucy]

Hoopla - read my message again. Nothing about wanting to be in on negotiations, just that we should have heard what had been decided from the unions, with their rational - not via the press or management.

[OrangeAdair]

I am concerned that a lot of people may have been reassured by the statement and very defensive/accusational/misleading background paper that the union put out on this issue. Very few are aware of the facts and the very serious threat that our pension is now under. I have therefore put together the following in the hope that it will be disseminated throughout NATS. Please encourage people to read it and, more importantly, encourage them to make their views known to the TUs and management. I think I shall be resigning from IPMS this week - after all, if they won't make a stance against this, what will they fight for - they're certainly not representing me at the moment! It's all very suspicious if you ask me.


The changes that have recently been agreed between NATS and the Trade Unions may be the beginning of the end for the NATS section of the CAA Pension Scheme. Although pensions may not be very interesting, please take the time to read and understand the following about the changes. It is important. Please make your views known on the matter to both the TUs and management. Also educate as many of your colleagues as you can.

NATS staff currently contribute 6% of their gross salary to the pension scheme. When the Airline Group took over, NATS also contributed 12.5% of your gross salary into the scheme.

When the pension scheme was split (between NATS & CAA) a valuation of the fund was performed up to 31/3/01. This showed a past service surplus of £584.3m in the NATS section; this is what is left after the pensions for the years worked so far have been allowed for. It does not take into account future years that will be worked. When the future years (future liabilities) are taken into account, there is a deficit in the scheme, not a surplus - this is the first time this has been the case.

When future liabilities are taken into account, NATS should currently be contributing at 30% (at the date of the last valuation - 31/3/01). However, the past service surplus is used to offset some of their contributions and by doing this they could contribute 12.5% indefinitely, without detriment to the scheme.

NATS asked the scheme’s Actuary to assess the effects of reducing their contribution rate to 10.8%, This could be done, but it would use up the surplus in about 16 years. They would then have to contribute at around 30% to maintain the scheme.

The latest agreement allows them to stop contributing completely (this was not recommended by the scheme's actuary, as the TU circular suggests). The past service surplus (that has been accumulated over many years) will now be completely used up in about 3 or 4 years. NATS will then have to contribute at 30+% to maintain the scheme. The unions have signed up to this without consulting the members.

This is important, because if in 3 years time NATS say they cannot afford to pay the new rate of 30% (which any company would refuse to do), the scheme becomes unviable. The trustees will then be obliged to close the scheme. The legislation, that was meant to protect our pension scheme, which was passed with PPP, will not apply (because it was not NATS who closed the scheme) and NATS will NOT have to offer an equivalent scheme. In all probability, they will offer a money purchase scheme, which will be much cheaper for them and provide the employees with much reduced benefits.

The unions have also agreed to increased benefits to the scheme members. They are using this so that they can say they won some concessions from NATS. The fact is that these benefits will cost money (from the scheme) and will reduce the past service surplus even more rapidly and hasten the closure of the scheme. If the scheme has to be wound up, these benefits will be of very little value, to say the least!!

The above is not being advertised by NATS or the unions. The TU circular that appeared on the subject was (deliberately?) confusing, misleading, erroneous and very defensive as they realise that those who are aware of the facts know that a very serious and costly mistake has been made.

Your pension is in very serious danger - do something now!

[ 02 December 2001: Message edited by: OrangeAdair ]

[2 six 4]

I've just managed to catch up with this debate after a nasty virus attack. So .....

As an ex BEC member and one who has maintained a healthy interest in what my succesors are doing I would like to comment.

I know Danny does not like names mentioned here but I'm sure he will not be accused of spreading slandererous statements.

Robin Morris has been the BEC and a general Union pensions expert for over 15 years. What he does not know about pensions is not worth knowing. He and the other BEC members did a superb job in guaranteeing our pension fund status in the legislation which eventually passed the bitter debate to complete the privatisation of NATS. Robin and the other BEC negotiators examined in detail all the advice and figures on offer and have taken the view that this is a deal worth taking AND there is NO significant risk to the long term health of our pension fund which they fought so hard to retain.

Contrary to previous posts the BEC have always been involved at the very highest levels of policy discussions and the involvement of a new management is not of any significance. For many years the serious decisions have been made way above the heads of NATS Executive but seldom above the Union sphere of involvement.

One question to all those who sudenly have an opinion on the intracacies of our pension fund. What would the opinion have been if it had been announced that there was a £350m surplus and all of it was being directed towards members benefits ???? Would we have seen all these comments about suspicious changes to the scheme ?

Bottom line has to be that we are employed to work as ATCOs. Those who dedicate a huge amount of their personal time to the greater good of us all deserve a bit of respect for the experience they gain. I am not one who leaves policy or actions unchallenged but on this issue the BEC have my 100% support.

[ 02 December 2001: Message edited by: 2 six 4 ]

[donnie31]

Well 264 what can I say! The introduction of names serves no purpose other than to put a specific person under pressure. This is not IMHO a sensible move. The BEC is more than one person.
However I draw your attention to the letter published by a trustee and apparently concurred with by another trustee, in which they reflect their deep concern for the future of our pension. I know these people well and trust their judgement above all others.
I know that Prospect/BEC had no option when it came to accepting TAG's requirement for a pension holiday, they are entitled to do this under existing legislation.
However I am deeply upset that my union did not see fit to keep me informed of developments as they were happening and the news was kept from me until it was let out by the trustees. Apparently the deal would have been done without our being given a chance to comment. This is what I am now doing.
Many NATS managers are also concerned about this arrangement and have publicly stated their opposition, I respect the opinion of many of these people.
Why not have the pension fund buy NATS? It can afford it! TAG have a massive debt to service, the interest payments are big enough, add to this the costs of running this company along with reduced revenue and you are looking at a dire situation.
For those of you working in ACCs you may not see much downturn in traffic, but look at the size of those aircraft and there alone you see a loss of income. We charge by the ton! At the London airports a B747 gives 7 times more income than a B737.
Hope this keeps the pot on the fire. :(

[Undercover]

Very well said 2 six 4.

I don't claim to be a pensions expert but I know enough about it - and about those representing our interests - to know that if it was as blatant a threat to the scheme as some make out, they would never agree to it.

Because you pay into the scheme doesn't make you an expert. We all have to keep questioning... but have a little faith. :)

[Whalerider]

I feel that our union has sold us down the river. It is bad enough that they have done so, but to do so against the advice of the trustees is unforgiveable. What really makes my blood boil is that they did so without consulting usa, the memners who they are supposed to represent !
null

[OrangeAdair]

In response to 2six4 above. I am mindful of the time and effort that our union reps put into the job and am grateful for it. However, I am convinced that a potentially serious mistake has been made and that an attempt is being made to shift the blame.

People keep talking about a 'healthy surplus'. The £350m that is often mentioned does not take into account the scheme's future liabilities. In the past the surplus calculation has allowed for this and a real surplus has existed. This time the real surplus is in fact a deficit! NATS & TUs are now comparing apples with oranges, not the other way round as the recent TU background paper suggested!

If a real surplus existed, 2six4 is quite right, members would be more than happy to share in the benefits. But they would also be supportive in NATS' proposal to take a contributions holiday at this difficult time - if the scheme could afford it!

Given that the deal is done (and in any case NATS could have done it without it being given credence by TU agreement) we should now be making representations to NATS (either directly or by encouraging the unions) to give some concrete guarantees about the criteria that must be met for contributions to recommence. There is no way they will contribute at 30+%, if the scheme was to get to the stage where contributions at this level are required, it would fold - there is no alternative at that stage!!

We need to know at what level the past service surplus will be allowed to reduce to before contributions recommence. Will they start contributing if the actuary says they need to contribute at x% at one of the six monthly reviews - if so what is x? Will they expect us to make up some shortfall by increasing our contributions??

The TUs can go some way to redeeming themselves if they can negotiate an acceptable answer.

[ 04 December 2001: Message edited by: OrangeAdair ]

[2 six 4]

traffic - a couple of points. The pension fund is not allowed to invest in its own company never mind buy it. That was done some years ago by a media person and it did him no good.

I must have missed it but would be interested to see where the NATS managers have publicly opposed the NATS management actions. where is this info ?

[OrangeAdair]

Well, it looks like most people aren't really bothered about their pensions. Maybe we are all too well paid and don't need the money?

I really hope I'm proved wrong - apathy still rules!?

[Undercover]

I think the number of posts shows there's not an apathetic audience on this subject, but there's no reason to jump to conclusions without considering all the facts.

1. Over recent years, if the only thing making money for the scheme was the employee and employer contributions then there would probably have always been a contribution rate of around 30%. The money is invested and healthy profits made which reduce the burden on contributions. This continues to be the case and - as with any sensible investor at the moment - i don't think they'll be investing within the aviation industry!

2. Under the 'trust of promise' should the scheme fold for any reason, NATS are obliged to offer 'an equitable scheme'. I think it unrealistic that management (NATS or TAG) would see it as a positive move to wind up one scheme only to have to pay horrendous start-up costs on an equally expensive new scheme.

I dislike the idea of a contributions holiday as much as the next future pensioner, but it's not quite as disasterous as some would like to make out.

[OrangeAdair]

In response to Undercover's points:

1. In the past, the scheme has done exceptionally well (out performing the market and most other schemes). This has generated a past service surplus (and in the past a real surplus when future liabilities are taken into account - it is a gross deficit now). However, even after taking into account return on investments, NATS should currently be contributing at around 30%. The past service surplus has always been used to offset the employers contributions and brought them down to a reduced SUSTAINABLE level (eg. 12.5%). If the only source of income for the scheme was from contributions, the contribution rate would be much, much higher than 30%.

2. Don’t rely on the trust of promise under these circumstances. There is a loophole! If in 3 years time NATS say they cannot afford to pay the new rate of 30% (which will be the case when the past service surplus runs out), the scheme becomes unviable. The trustees will then be legally obliged to close the scheme. The legislation, that was meant to protect our pension scheme, which was passed with PPP, will not apply (because it was not NATS who closed the scheme) and NATS will NOT have to offer an equivalent scheme. In all probability, they will offer a money purchase scheme, which will be much cheaper for them and provide the employees with much reduced benefits.

None of the above is mentioned in the highly spun documents coming out of NATS (eg this week's Update) or the TUs. No one is setting out the criteria for when NATS will recommence contributions - don't you wonder why? Phrases such as 'when the actuary recommends' are meaningless. He can only tell them the effects of various scenarios that are put to him - such as how long can we not contribute for (ans: until the money runs out).

Given that its going/gone through, all we can do is watch them like hawks at each actuarial update and continue trying to dispel the management/TU spin and disseminate the real facts to as many people as possible (there are a lot of unconcerned people out there who do not realise the serious implications to their pensions).