NATS Pension Guarantee

[Fallows]

In todays Times on the front page, it refers to the share price slump and how one third has been wiped of the value of the stock market. It also reports that pension fund members have lost approx £10,000 each in that slump. I am intrigued as to how this "squares" with NATS taking a pension holiday and stopping contributions?. I am very concerned about this, Is the pension fund so overfunded that it is able to take this kind of loss? or will we be presented with a fait accomli when the pension fund is wound up with insufficient fund to fulfil its obligations?
Does anyone know the answer to this?

[DtyCln]

HM Government Transport Bill Dec 2000

... NATS or any company which succeeds to the business of NATS (ie a takeover)

...para (9) The NATS employer (TAG) shall contribute to the relevant scheme (ie NATS Section of CAAPS) at no less than the rate recommended by the scheme's actuary as being sufficient to secure the accrued rights from time to time of the protected beneficiaries in full (ie NATS employees, past and present). ..... the NATS employer shall not be entitled unilaterally to suspend or terminate its contributions to the relevant scheme except upon its insolvency. You may have read elsewhere that the actuary did not recommend a contribution holiday for NATS at the last Scheme Valuation. This is however untrue, the actuary DID recommend a contributions holiday, it was one or two of the trustees who objected, not the actuary.

para (12) The NATS employer shall continue to provide future benefits in the relevant scheme which, in respect of the protected beneficiaries, are at least equivalent in value to those available under the scheme at the transfer date. (ie 2/3rds final salary at the time of the PPP).

para (13) No amendment may be made to the relevant scheme which would result in a reduction of the accrued or future rights of protected beneficiaries, nor in an increase in the contributions payable by protected beneficiaries who are active members.


I hope this helps explain. TAG cannot wind up the NATS section of CAAPS. Were TAG to go bust we are still technically owned by HM Government, they are the majority shareholder. Were we to be taken over by a company which the CAAPS would not allow to be associate members of CAAPS then the new company must establish a new 2/3rds final salary scheme for protected beneficiaries at the time of PPP. (Covered in section 65 para (5).

Live long and prosper.........:)

[nippa]

DtyCln

I've been trying to locate the legislation in which these guarantees were given and have been unable to locate them in the Bill you mention.
I presume its the Transport Act 2000 to which you refer.
Could you be more specific please?

I have looked at the NATS Licence and can find nothing in there covering these points so where are these "guarantees"?

My advisors believe that our fund is at risk if the "company" has insufficient funds to restart payments at the level required by the Actuary.
The fact that HM Government is a major shareholder places it in no different position to any other shareholder in any other company.

Please , please , would somebody demonstrate that this is not the case.

[Minesapint]

I also understnd that there is still a substantial surplus in the fund. Can anyone confirm this?:confused:

[DtyCln]

As requested.

http://www.parliament.the-stationery-office.co.uk/pa/ld199900/ldbills/124/2000124.htm

Section 65

There are many editions of the Transport Bill around you have to make sure that you read the one that actually went through the House of Lords in Dec 2000. Many of the amendments were put in during the latter stages to try and appease Labour backbenchers, many put forward by MP's supported by IPMS in the commons and Lord Brett ex IPMS Chair who was leading the rebel Labour Peers in the house of Lords.

I have no knowledge if there is still a surplus in the fund even after recent falls. However only half the fund is invested in stocks anyway, the rest is in Bonds and property both of which have performed very well against the falling stock market.

Live long and prosper...........:)

[Undercover]

First of all can I say I dislike this pension "holida" thing as much as any of you, but...

As you say it is entirely legal and entirely within the rights of the company AS LONG AS THEY LIVE UP TO THEIR RESPONSIBILITIES!

Also, the people who will decide if the scheme is at risk and what should be done about it are the scheme Trustees. Personally I believe we should all have a little more faith in these people as their whole reason for working is to ensure the scheme is in a healthy state for all of us. Their own jobs, pensions and reputations are on the line.

It went unnoticed in all the hoo-ha... but the unions did negotiate with management at the time of agreeing the holiday that more regular valuations of the scheme would take place and, if a valuation showed a marked decrease in the surplus to a level that concerned the trustees, the employer contributions would have to recommence. I believe the valuations are now ever 6 months... but don't quote me on that!!

Perhaps I'm a little less edgy on this than some as my pension gathering days are rather far over the horizon still... but I think we're as safe as any contributor can be in this day and age.

And any of you that like to dabble on the FTSE will know that what goes up must come down... and vice versa!!