Nats Pensions

[BDiONU]

Fact The current pension scheme cannot be 'interfered with' by NATS, only a change in the law will allow it.

Fact Staff in the current pension schemes rights and benefits are protected by law.

What appears to be the concerns are that this scheme will close to new employees and a new scheme started up for them and/or that current staff will be 'encouraged' to leave CAAPS.

My personal opinion is that I would need a huge amount of 'encouragement' to leave the Gold Plated Rolls Royce scheme which is CAAPS.

As to closing it to new staff, well its obvious to me from everything I've read that there are very very very few companies (except for MP's) offering the Roller that CAAPS is to new staff because pensions are vastly expensive. NATS as a company will be forced by the regulator to do something about the huge cost of its contributions to the pension scheme. By forced I mean that charges will be capped and/or reduced so that income is less and less income means that something somewhere has to be cut back because NATS does not have a huge pot of gold to dip into, it runs on revenue.
So something has to be done now because of the lead time for it to have an effect. Why not close the scheme to new recruits I ask myself? Some people say we have a responsibility to new recruits, well do we? Are we their parents? They would be joining this company with their eyes open fully aware of the Terms & Conditions of employment, including pensions. Its their choice not ours to attempt to make for them!
NATS would be foolish to attempt to introduce a replacement scheme which does not compete with other companies because they could not attract staff.

Just to reiterate - Current members of CAAPS are absolutely protected by law, their terms and conditions and benefits are protected by law, NATS cannot do a Maxwell. The discussion (IMHO) centres on whether the existing scheme closes to new entrants and what decision current members want to make on behalf of future employees, whether or not those future employees want current NATS staff to make decisions for them!

BD

[BEXIL160]

NATS as a company will be forced by the regulator to do something about the huge cost of its contributions to the pension scheme.

Thats the point though. NATS pays very little into CAAPS compared with other companies and their schemes. It doesn't pay "huge sums".

BEX

[BDiONU]

Originally Posted by BEXIL160

Thats the point though. NATS pays very little into CAAPS compared with other companies and their schemes. It doesn't pay "huge sums".

Currently 12% I believe because its using the surplus to cover the shortfall (shortfall being the difference between what NATS has to pay to keep the scheme assets the same or greater than its liabilities and how much it is paying). How long will the surplus continue to cover that shortfall? How long is a piece of string? One sure thing is that it cannot be forever, not unless the scheme trustees find some fantastic investments which no one else in the financial markets has found.

BD

[oceans 11]

What about staff who joined NATS after april 2001?, I don't think their pensions are protected by law.

[120.4]

BDiONU

Forgive my ignorance in this matter and explain if you can...

Firstly: I have heard on a number of occasions that if new pensions terms are given to new employees then when their number exceeds those on existing terms a vote could be taken to close down the existing scheme. Is that correct? Surely, if new employees join a different scheme they cannot then vote in matters relating to the old scheme, it would be none of their business?

Secondly: I have spoken directly with one of the IPMS team working on this and have been advised that the start-up costs for any new scheme would be significant, both to NATS and the "new" employees. Therefore, why is that still more attractive to NATS than continuing the current arrangements, which go a very long way towards keeping NATS' ATCOs quiet? In other words, why kick up a huge stink over something that is not going to be much cheaper (certainly in the short term).

.4

[Del Prado]

.4, Your first point is the crux of the matter. The estimate is something like 10 years before 'new' staff outnumber 'old', then a huge amount of pressure can (will) be brought to bear to close the present scheme. Promotion dependent on you signing up to new pension, higher pay rises for those on new scheme there are hundreds of 'incentives ' that management can use.
This has happened throughout our industry and throughout privatised companies.


Your second point, way back at the start of this thread foghorn said

Closing it is more to do with keeping a bunch of crystal-ball-gazing actuaries in the credit rating agencies happy than a sensible response to increasing longevity.

As NATS is so heavily geared (and the higher it's credit rating, the cheaper it's borrowing) the company can save so much more by having a AAA credit rating than the start up costs of a new scheme.
High credit ratings are achieved by reducing long term liabilites (like pensions).

[BDiONU]

Originally Posted by 120.4

BDiONU
Forgive my ignorance in this matter and explain if you can...

I'm just giving my viewpoint based on everything I've heard and read. Not just what NATS are saying but everything we're all exposed to in the media and from friends employed in other companies. I do not profess to be any sort of 'expert', just a bloke with a slightly different opinion to the 'One out all out brothers!' type of post which seems prevalent.

Firstly: I have heard on a number of occasions that if new pensions terms are given to new employees then when their number exceeds those on existing terms a vote could be taken to close down the existing scheme. Is that correct? Surely, if new employees join a different scheme they cannot then vote in matters relating to the old scheme, it would be none of their business?

I concur with your conclusion. No one can 'interfere' with the current CAAPS scheme unless the law is changed.

Secondly: I have spoken directly with one of the IPMS team working on this and have been advised that the start-up costs for any new scheme would be significant, both to NATS and the "new" employees. Therefore, why is that still more attractive to NATS than continuing the current arrangements, which go a very long way towards keeping NATS' ATCOs quiet? In other words, why kick up a huge stink over something that is not going to be much cheaper (certainly in the short term).
.4

If what you say is correct (and I have no reason to doubt it but the 'new' pension scheme details aren't being announced until March/April next year) then the key bit is that costs will be significant to the 'new' employees. Also the company are looking at the long term view. If you joined the company at 20 you could be employed for 40 years, so if they close the existing scheme now it'll be about 20 years until the 'new' scheme members begin to be greater than the 'old' ones. Bear in mind that CAAPS will still be paying out pensions until everyone in the scheme dies which could be a very long time for some of us.

BD

[BDiONU]

Originally Posted by Del Prado

.4, Your first point is the crux of the matter. The estimate is something like 10 years before 'new' staff outnumber 'old', then a huge amount of pressure can (will) be brought to bear to close the present scheme. Promotion dependent on you signing up to new pension, higher pay rises for those on new scheme there are hundreds of 'incentives ' that management can use.

For a change to the current scheme, other than by government legislation, the members must vote on it and the vote must be 100% in favour or it fails. So if even 1 person voted against a change the scheme will stay intact. There is, to my mind, no incentive which could persuade 100% of members to vote in favour, unless the offer was to apply a coat of platinum over the gold

BD

[Del Prado]

My post would have been more accurate had I said "a huge amount of pressure can (will) be brought to bear to move members to the new scheme" rather than "a huge amount of pressure can (will) be brought to bear to close the present scheme".

BDiONU, they can't close the present scheme under existing guarantees. Do you trust those guarantees to still be in place in 10, 20 years time?

Management have many tools to force members from the present scheme into a new scheme. Who's going to look after present scheme members interests when 60% of the workforce are in the new scheme? What about 80%? Your estimate of a 20 year 'tipping point' when new members outnumber old is a lot higher than union estimates.

[BDiONU]

Originally Posted by Del Prado

BDiONU, they can't close the present scheme under existing guarantees. Do you trust those guarantees to still be in place in 10, 20 years time?

My crystal ball doesn't go out that far But I cannot, currently, envisage any situation which would move the government to make a change to the laws covering CAAPS.

Management have many tools to force members from the present scheme into a new scheme. Who's going to look after present scheme members interests when 60% of the workforce are in the new scheme? What about 80%?

100% of members have to vote for a change, lets say that the workforce stays static at 5000 and in future its down to 20% in the CAAPS scheme, a 1000 people. I still have difficulty in envisaging how you could get 1000 people to all vote the same way, particularly as many of them would be approaching retirement or could see it on the horizon.

Your estimate of a 20 year 'tipping point' when new members outnumber old is a lot higher than union estimates.

Was just a very simplistic calculation based on all staff joining at 20 years old and doing 40 years (or 50 as retirement age moves to the right ) I know that there is a big retirement bulge looming due to the big recruitment drive in the 70's.

BD

[120.4]

Okay

Thanks for those. It seems from what is being said that it is going to be an uncomfortable period all-round until we know the truth of management's intentions and the strength of feeling in the subsequent vote.

.4

[BDiONU]

Originally Posted by 120.4

It seems from what is being said that it is going to be an uncomfortable period all-round until we know the truth of management's intentions and the strength of feeling in the subsequent vote.
.4

well IMHO there appears to be a lot of hysteria and unfounded/unnecessary angst which doesn't accord with the facts, which are that the current CAAPS scheme is totally safe and ringfenced provided NATS doesn't go bust and the government does a Railtrack OR legislation is introduced which changes the laws covering CAAPS.

BD

[120.4]

BD

If it is as secure as you suggest, that is great. May I ask how you come to KNOW that it is that secure? Sorry - I 'm not really up to speed on the relevant laws etc myself.

.4

[BDiONU]

Originally Posted by 120.4

BD
If it is as secure as you suggest, that is great. May I ask how you come to KNOW that it is that secure? Sorry - I 'm not really up to speed on the relevant laws etc myself.
.4

Had lots of briefings on this recently plus I recall all the stuff that was going through around privitisation, which is when parliament passed the laws ringfencing CAAPS.
BTW I'm not saying it is totally and absolutely 100% secure, thats just my opinion based on my knowledge, everyone needs to make their own minds up.

BD

[SensibleATCO]

Had lots of briefings on this recently plus I recall all the stuff that was going through around privitisation, which is when parliament passed the laws ringfencing CAAPS.

This of course is the same parliament that previously announced "Our air is not for sale"

[BEXIL160]

Hmmm,

If everythinmg is as secure as BD suggests (and I'd like to believe he is right) then why are NATS management going to all this trouble when they have NO CHANCE of getting the allegedly required 100%?

Protecting "the company?" and therefore it's employees. You're having a laugh.

BEX

[BDiONU]

Originally Posted by BEXIL160

Hmmm,
If everythinmg is as secure as BD suggests (and I'd like to believe he is right) then why are NATS management going to all this trouble when they have NO CHANCE of getting the allegedly required 100%?

Its 100% of members who have to vote in favour of a change to CAAPS (or the law would have to be changed). NATS are not proposing a change, they're proposing to close it off to new employees. From the reactions in this thread its obvious why NATS are going to all the trouble of explaining to current employees just why they want to do it, they don't want disenfranchised, hacked off and militant staff.

Protecting "the company?" and therefore it's employees. You're having a laugh.

Sigh! The regulator has allowed a pass through of pensions costs to the airlines in CP2 (but not for those employed after 1st Jan 2006). In other words NATS are charging the airlines directly, in the form of an increased route charge, for the contributions to CAAPS. As you can imagine the airlines are less than pleased to have to shoulder this additional cost on top of what they already consider to be the most expensive ATSP in Europe. Particularly when you consider that BA has a HUGE hole in its pension fund and I doubt RyanAir or EasyJet have much of a pension scheme. The airlines are squeezed on how much they can charge because they're all in competition with each other and could price themselves out of the market. NATS is a monopoly provider, no one else can offer en route services in the UK. But NATS cannot simply charge what they like, the regulator examines the books and investment proposals and decides on what NATS may charge. Those charges have not only been capped in CP2 but are being reduced by percentages over the years.

The regulator has fired a warning shot over NATS bows in CP2 by not allowing the pass through of pension costs for those employed after 1st Jan 2006. The regulator has made it clear that if NATS do not take any action to reduce pension costs they will take further action in CP3. Further action means yet more reductions in route charges and less pass through of pension costs. The regulator has to take action because of pressure by the airlines to reduce the costs of charges made by the NATS monopoly.

If the route charges are made smaller by the regulator and pension pass through is not allowed then NATS faces a reduction in revenue with an increase in pension costs. By taking action now the company are protecting the employees from the prospect of NATS going bust and the government then doing a Railtrack (which I have no doubt they would, ATC is too important to the UK).

BD

[Roffa]

Originally Posted by BDiONU

The regulator has fired a warning shot over NATS bows in CP2 by not allowing the pass through of pension costs for those employed after 1st Jan 2006. The regulator has made it clear that if NATS do not take any action to reduce pension costs they will take further action in CP3. Further action means yet more reductions in route charges and less pass through of pension costs. The regulator has to take action because of pressure by the airlines to reduce the costs of charges made by the NATS monopoly.

Just curious, how does the regulator fund its own pension scheme?

Isn't what's good for the goose good for the gander?

As for being the most expensive in Europe, to quote our leader...

Barron acknowledges that "The airlines think we are far too expensive; they want to keep the pressure on and rightly challenge our costs." But he claims that "it is impossible to measure us against our European counterparts . . . our airspace does not compare." He continues, "No one else in Europe borrows several hundred million to run their business, has a regulator, has to absorb the cost of that regulation, has to pay for the buildings and land, etc. There are things we have to do because we are privatized that government-subsidized organizations do not. The regulator believes we are competitive with the rest of Europe. We know that we are among the best at what we do. So if our charge rate is the highest, it probably reflects what the real costs are. However, our target is not to be highest and to get that rate down successively year after year."

[Del Prado]

Beady, I don't see the threat as management making unilateral changes to CAAPS. As you've stated, present rules do not allow for that.
The threat comes when the majority of staff are in a new scheme. management are then in a very strong position to 'victimise' those in the present scheme. They will have 2 groups of staff on different terms and conditions, they will think nothing of offering larger pay rises to new staff and none to existing CAAPS members. There will be many incentives offered, both carrot and stick to get us to leave CAAPS.
Any move by management to split the workforce is very dangerous and will be exploited fully in the years to come.


I'd advise all NATS staff to be very wary of views offered both at work and on this forum. Management (down to some supervisors/chiefs) have been asked to push the board's position on this matter, what you read and hear may not be personally held opinions.

[PPRuNe Radar]

Leading the charge is the guy who was in charge of Alstom ...

Alstom was sold to Siemans in April 2003.* Workers have discovered through a letter from David Curtis, Alstoms' International Director of Pensions, posted on the company's website that workers applying for early retirement faced a further 20% cut in their pensions.

Workers who retire before 65 already face pension losses of 30% and have been kept totally in the dark over the new plans. Alstom has an estimated £435m shortfall in its UK fund, which has more than 20,000 members.

... yet he quite happily let NATS pick up HIS pension shortfall as part of his incoming pay package whilst leaving his previous workers to pick up the pieces of their own crumbling fund.

As soon as he's plundered our fund, got his knighthood from his pal Tony, and put a suitable golden parachute for himself and his buddies in place ... he'll be off as quick as a flash.