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ONE NATS ONE PENSION 2006...........
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NATS Trade Union Side[/FONT][FONT='Times New Roman','serif']
To:All NTUS Members7 March 2006
Dear Colleague
NATS PENSIONS SCHEME - UNIONS MEET MANAGEMENT
Firstly, thanks to all of you who took the time to respond to the circular dated February 2006. Your comments were most welcome and show the depth of feeling amongst members in support of defending the existing pension scheme arrangements.
As promised this is an update following a meeting between the NTUS and Senior NATS Management which took place on Thursday 2nd March.
At the meeting, Paul Barron and senior colleagues stated the following:
NATS intention is to safeguard the pensions of all our existing pension members. Existing NATS scheme members will remain in CAAPS and continue to accrue benefits on the current basis.
The Trust Deed and Rules and/or the "Trust of a Promise" protect current scheme members. This is through: a) The "no decrement" principle of CAAPS and b) the HMG "Trust of a Promise" for scheme members at the time of the PPP on 26 July 2001.
By Control Period 3 (CP3) there will be unsustainable pressure from NATS customers and the Regulator because this represents an open ended and volatile cost.
Most of the Defined Benefit "Final Salary" schemes of NATS customers have already closed.
In addition Management indicated that they had a number of concerns regarding future liabilities:
The cost of providing Defined Benefit Pensions has increased.
The ability to recover tax paid on dividend payments has been removed.
Members and dependents are living longer.
Stock Markets are down in relation to 2000 level.
Fall in Long-term Government Bond yields at lowest since 1950's.
Funding level has dropped from 144% March 2001 to 119% at December 03.
Pensions cash pass-through for CP2 only applies to NERL. (This has no implication for staff in NSL other than NATS having to pick up the cost as all staff are employed by NATS).
The cost of providing £1p.a. of pension has been increasing.
Paul Barron also stated that "doing nothing" was not an option and he invited the NTUS to work together with Management between now and 2008 to identify the choices we may have going forward. He also offered to investigate whether the next scheme tri-ennial review due on 31 December 2006 could be brought forward.
In relation to a possible new scheme for future employees NATS indicated:
Only new employees will join any new scheme, under which they would contribute at a level that is more in line with the TUC's recommended 2:1 employer/employee funding ratio. New employees would have choices from Defined Benefit through to Defined Contribution Options at appropriate employee contribution rates.
The target date for a new scheme would be April 2008.
In response the NTUS stated the following:
Welcomed the fact that Management recognised the strength of feeling amongst the membership on the matter of pensions and re-stated that we have a clear mandate to oppose any changes to the existing arrangements including the setting up of a two tier scheme for new employees.
Didn't wish the tri-ennial review to be brought forward as we have complete faith in the Scheme Trustees and Scheme Actuary who administer the scheme on a day to day basis. If at any time they identify the need to consider the existing or future viability of the scheme we would be the first to indicate our desire to have a dialogue through the existing arrangement which is the NATS Joint Pensions Committee.
Regarding the pressure being applied by the customers on the Regulator we requested that NATS arrange for representatives of the NTUS to meet with the British Airways CEO when he attends a NATS function on 8th March. NATS did not feel that it would be appropriate for a customer to debate an internal issue and declined the request.
The NTUS also finds it somewhat ironic that the Regulator is also a part of CAAPS albeit the CAA Section.
The NTUS will continue to campaign with members to oppose any changes to the current arrangements and any proposals to set up an alternative scheme for new employees.
Two further points:
Management intend to set up a Question & Answer process on Pensions. The NTUS agreed to input comments.
Paul Barron and colleagues will be conducting Road Shows around NATS within the next few weeks and they intend to raise the issue of Pensions. The NTUS welcomes this opportunity for members to be directly involved in the debate and therefore asks as many as possible of you to ensure that you attend a session at your unit.
Finally, we see this campaign to defend our pension scheme as being a marathon rather than a sprint. With that in mind the NTUS have set up a small working group to draw up a campaign strategy and should the need arise we will be calling for your support. In the meantime, as before, your comments and ideas on campaign activities would be most welcomed.
ONE NATS - ONE PENSION SCHEME
Yours sincerely
Alastair Nicolson
Alastair Nicolson
Trade Union Co-ordinator[/FONT]