Quoting from the July statement jointly from NATS and NTUS following the meeting Pensions Committee at the end of June:
• The Actuary’s report showed that the assets of the NATS Section as at 31 December 2007 were £2,983.7m, compared with £2,785.3m as at 31 December 2006. This includes the value of money purchase additional voluntary contribution (AVC) funds invested separately.
• The Actuary’s report showed that the liabilities of the NATS Section as at 31 December 2007 were £2,923.4m, compared with £2,489.1m as at 31 December 2006.
• The Actuary’s report showed that there was a surplus of £60.3m as at 31 December 2007, compared with £296.2m as at 31 December 2006. This represents a reduction of £235.9m. This is equivalent to a funding level of 102%, compared with 112% as at 31 December 2006.
• The Actuary’s report showed that the underlying cost of the Scheme (future service cost) to the employer has risen to 42.1% of pensionable payroll, compared with 37.3% as at 31 December 2006.
So sadly the numbers being used in current negotiations do look rather out of date already.
Not knowing how well insulated the funds are from the likes of the FTSE100 plummet of some 10%? in the last few months (worst case -10% of £3bn is -£300m) I might nevertheless surmise that the scheme may already be in deficit at this moment.
Does anyone know if the Additional Voluntary Contribution funds are significant? If they were. it might be putting a too rosy blur on the health of the main defined benefits part of the scheme.
And does anyone know if the 42.1% is the total funding requirement and includes the 6% employee contribution? When I read a 2006/7? presentation from NATS which mentioned the old 37.3% number I gained the impression that 37.3% was the total estimated requirement at that time.
It's just that the surplus reported at December 2007 had already become quite marginal, and the continuing 'holiday' from full funding looks like it is already a very big 'runaway' type percentage deficit during current surely very adverse investment conditions.
Though I am not such a person, I am sure I am not much different to the average NATS ATCO member when it comes to trying to make sense of the numbers.
So it was agreed in April to make the net 2008 employer contribution 20%? Adding 6% from employees gives 26% of payroll for 2008 not 42.1% or any higher figure.
One assumes the only reason for actual funding not being higher is some continuing agreement to let the surplus subsidise the employer contribution until the day that surplus is used up or has been seen to have done so?
Wouldn't be surprised to hear that day may already have passed - now what?
Begins to look like you all need parachutes as well as powder ...