I am voting 'NO' for a few reasons, but one of which is I do not have any trust in the company or the fund managers.
We are being told that the cap makes NATS more financially stable because
The cap has an immediate effect because it allows the actuary to make different assumptions. Those different assumptions have a very big difference on the predicted liability which in turn reduces by some margin the underlying contribution rate.
I totally understand the fact that the pension fund legally does not need to be kept in surplus.
I totaly understand the business reasons why NATS would want to keep the surplus as low as possible (reduces costs to NATS).
What grips my sh!t is the talk of
assumptions and
predictions. This implies long term planning, whereby you plan for good times and bad times realising that in a given time span (shall we say 15 years) the fund will sometimes over-perform and sometimes under-perform.
What the quoted statement above claims is that with the pension cap, NATS and it's actuaries will be able to shave off a couple of percentage of it's contribution rate (thus making a business saving), whilst still ensuring the pot remains funded at 100%. i.e. it will be able to do this without having to go to extremes and having too huge a surplus.
What the quoted statement does not take into consideration is the fact that NATS claimed several years ago that the contribution holiday and the reduced contributions would not affect the pension, yet seven years down the line, look where we are (
that's only seven years, not even half the time NATS want to tie us into this supposed new fix).
In other words, NATS was unable or unwilling to keep a sufficient enough surplus to overcome the current problems.
What the 'YES' men want you to believe is that this situation was unpredictable when NATS took the break and the reduced rates... so why should we now believe them when they say that the proposed measures mean that they can keep the pension correctly funded, whilst not having to pay in too much?
The pension fund does not need to be funded at more than 100%,
however it's basic common sense that you keep a bit aside for a rainy day, which NATS have failed to do. Allowing for contingency is the basic premise of any financial planning, be that in renovating houses, ensuring you have enough money to cover emergencies etc or in any other financial venture.
Any half-wit knows that if you only budget to pay for 100% of possible costs, something will come along to make those costs higher.
Only a complete bunch of half-wits would allow that to happen.
So the million dollar question is, are our finance people half-witted, or was the funding level done deliberately because it was known that it would make the pension scheme look dodgy at some point in the future, thus paving the way to restructure it, thus paving the way for breaking up and selling NATS?
Either way, can we trust our financial 'experts' (who up until recently 'hadn't heard' of SMART pensions
) - because one way or another they are either incompetent and/or underhand.