Defined Benefit Scheme
Those paying in now are not paying fopr those on pensions.
In very simple terms, when you nare working, the investments in the scheme are in more 'volatile' investments, such as equities and propoerty, as these tend to produce larger returns. These larger returns are needed as your salary will likely increase by negoitiated pay rises (possibly above rpi) and any restructuring/regarding deals, which may also increase your salary. WHen you are retired, the investments tend to be in 'safe' investments, such as bonds. These produce low returns, but since your pension in retirement can only increase by rpi, these lower returns are enough to fund your pension.
We have few pensioners and many active employees, therefore about 75% of the scheme investments are in more volatile investments.
Trust Deed and Rules (No Decrement)
This applies to all members of the scheme, irrespective of when they joined NATS.
This is conatined in the Scheme Trust Deed and Tules, available to any member. The no decrement ensures that any benefits you have accrued and the way in which they are accrued cannot be worsened. Simply put it means all the pension you have built up is safe, you will continue to accrue more benefit at a rate of 1/58th per year, and your pension will continue to be based on 2/3 final pensionable salary (and yes, it does say 2/3 final pensionable salary). It does not say that you are entitled to, or will recieve, a pay rise each year, nor that any pay rise must all be pensionable.
Trust of a Promise
This only applies only to members of the scheme prior to PPP (27th July 2001).
This says that if NATS, or any part of it is sold, then the new employer is obliged to join CAAPS and continue to provide the same pension to employees covered by the trust of a promise. If they do not join CAAPS, they must show that the pension scheme they have is at least as good as that in CAAPS. However, there is a get out clause that talks about best endeavours when it is not reasonable for a company to provide such a pension, in which case, best endeavours only are required.
Cost Pass Through
This only applies to NATS employees in NERL who were members of the pension scheme in Jan 2006.
In CP2, NATS was required to submit what it charges would be. Within this was the cost of the pensions. The regulator then looks at the costs NATS quoted and basiclly makes a call as to if this is reasonable. The job of the regualtor is to mimic market conditions. He felt the costs eregarding the pension were acceptable and allowed NATS to charge up to 19.1% in their business plan from Jan 2008.
The cost pass through issue is seperate.
Cost Pass Through means that if the costs in NATS business plan are exceeded, then this additional cost can be passed on.
As the job of the regulator is to mimic market pressure, is it likely an actual pension cost of at least 42% will be allowed, let alone any cost pass through for CP3. In the market, companies have been made to deal with increasing pension costs by changing pension arrangements. It is likely this is what he expects of NATS.
Memorandum of Understanding
The 15 year period refers to the cap and the no pension holiday, as well as discussions with NATS about benefit sharing (as happens now).
The bit that matters most is the section in it which states that no incentivsing to move to the new scheme, nor any discrimination due to membership of either scheme, will become part of your employment contract (this is legally binding). These last to points will remain for the term of your emplyment and will not fall away after 15 years.
Shareholders
Shareholders are not required to bail out a company.
If you hold shares in M&S and it goes bust, you lose the value of your shares. Someone doesn't come knocking on your door saying you need to make up all their losses to keep it going! The same applies with the Govt, BAA, Airline Group and YOU being a shareholder.
Re-Nationalistaion
Worked well for Northern rock .. 1300 redundancies with 800 forced. There are more to come with 1/3 of the staff eventually being lost.
What pay rises do you think they will get?
The civil service is not the same as it was in 2000.
They now have 2 pension schemes and pay rises are subject to the public sector pay cap.
Would NSL be re-nationalised or just parts of NERL?
It may or may not be a better place than where we are now.
I don't want to tell anyone what why to vote, as that is what the ballot is for. All I would ask is that you understand what is being asked from you and what you may or may not be giving up.
To this end, go to the briefings, ask all the questions you can think off, including everything that is on this site, and don't stop asking until YOU understand. Everyone else will have a different agenda, you need to understand what is right for you and not what may or may not suit someone else's agenda.
jonny B good is offline Report Post Reply
A post from a different forum which I think may help those who are confused by some of the terms used.