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 ]