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NATS Pensions (Split from Pay 2009 thread)

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Old 21st Oct 2008, 22:11
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brummbrumm

With the greatest of respect,you went into a briefing that was wholly one sided!
You will have had no counter-argument.
I went into a briefing that laid the facts bare and gave me information to make an informed decision based on the figures ( Mathematics and Statistical analysis was my forte at university many moons ago).

I had may counter arguments and each and every one of them was purely an emotional reaction to:

A) Changes to a pension scheme that I believed could not happen

B) Wanting to get one over on Barron

C) Wanting to hit back at the union guys for doing this against specific madates not to.


The fact is the numbers do not lie, like I said, my heart says no, but my head says YES

Who would like to have a guess what jobs the "negotiating" team will be promoted into by next year.
I wouldn't care to guess what positions any of the negotiating team would be promoted in to by next year. However I will say that the PCS rep is one of the most committed trade unionists I have ever met (I'm from what was a mining community and have met a few in my time) his agenda certainly isn't one of career progression in fact I would say his loathing of all things managerial would instantly negate any argument you would care to put forward. The Prospect guys - judging by their positions within the union they should have been promoted a long time ago should their sole ambition in promoting this be personal career development.

I think they have seen you coming!
I consider myself to be a well educated balanced individual that can argue my corner and stand up for what I believe to be right.

I have been a member of various trades union since leaving school and I am committed to the union ethic.

Our union has acted in our best interests in protecting our pension and securing our future retirement benefits.

Emma1974, if your handle gives away your year of birth then you are sadly very naive for someone your age.

Let common sense prevail.
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Old 21st Oct 2008, 23:04
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brummbrumm
As Statistics was your forte in a previous life you will no doubt be well aware of the saying
" There's lies, damn lies and statistics"
Stats can be made to say whatever the person presenting them wants to say.
For instance the Stats gloss over the fact that they have been contributing at less than the underlying rate for at least 5 years ( and probably considerably longer).
The question with the pension is not whether something needs to be done but who should foot the bill.
The companies position is they can't afford it the unions position should have been that they should find a way not to say "Oh yes your right you can't afford it"
The inconvenient truth for Nats is that they can afford the pension they just don't want to. At no point in the presentation does it say we looked at any option but changing your pension because they never did.
Also before you start commenting on others naivety perhaps you'd lile to consider whether it is more naive to take a one sided presentation as unbiased fact.
My final point is on the perennial idea that it's okay to screw the terms and conditions of those not yet in the company so we don't have to fight with management is really starting to wear thin. When are people going to realise that these are our future work colleagues. Just remember the debacle that still is the college Atco wages and the effect that's had on the new colleague's you work with now. Think how much worse it will be when you try to justify your wonderfull pension while there busy doing financial gymnastics to get an okay one maybe if there lucky and the stockmarket doesn't imconveniently crash on them at the wrong moment.
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Old 21st Oct 2008, 23:09
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Briefings are completely one-sided presenting a fait accompli.

Several forumites have said they have been convinced by 'the figures'.

Well I don't think it IS as simple as that.

The Airline Group bought us for £50m up front, borrowing the rest (£800m) and dumping the debt on NATS (ie. US). This is screwing us (royally).

On top of this the CAA (the Govts proxy) is screwing us with RPI minus formulae and refusing pension cost pass through.

I believe that at no time have management or CTUS sought help/input from Govt. That should have been the FIRST demand of CTUS. The Govt created this problem they (as 49% shareholder) should be shamed into helping solve it.

By all means sit and wring your hands and say "we're doomed, and our only option is to believe the accountants and the managers and the Union".

Well I for one don't buy it.

When you see the years of underpaying (makes you wonder if it was specifically to undermine the pension..), and the £60m profit per year, and the cash the Govt have screwed out of NATS (and the fund), and the FACT that any company that reduces its pension liability is a bigger and juicier prospect to sell ...

I for one object to my pension PROMISE being screwed to pay for the debt and fattening up for sell-off.

Think on this. Your brothers in the CAA still have the same pension prospects as they did 7 years ago, promises that are funded (by Govt) at 38%.

So, be naïve and just believe the spin. Or look a bit more deeply into why we're here.

It's a big NO from me, because I don't trust 'them'. It's time to hold the politicians to account for all their previous promises.

So, please, get off your moaning ar$es and hassle those MPs !
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Old 21st Oct 2008, 23:47
  #804 (permalink)  
 
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idiots guide to pensions question 3,294:

erm... if NATS have been paying below the underlying rate, how come theysay we are 100% (or near as dammit) funded at the moment.? If future commitments cant be met, then how can the fund be at 100% funding or indeed 112% funded (in surplus) as it was recently etc. Is this one of those lies, damed lies and statistics situations?

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Old 22nd Oct 2008, 04:48
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brummbrumm
As Statistics was your forte in a previous life you will no doubt be well aware of the saying
" There's lies, damn lies and statistics"
Stats can be made to say whatever the person presenting them wants to say.
For instance the Stats gloss over the fact that they have been contributing at less than the underlying rate for at least 5 years ( and probably considerably longer).
Contributing at less than the underlying rate for the last 5 years does not change the underlying rate that needs to be paid today. If Nats had paid at 36% (assuming that was the underlying rate required in 2003) and continued to pay the underlying rate then the scheme would not be in quite as mucg deficit as it was at the Sept 08 valuation (£595m) the underlying rate that NATS would be required to pay would still be in the region of 42%

Also before you start commenting on others naivety perhaps you'd lile to consider whether it is more naive to take a one sided presentation as unbiased fact.
I didn't. I went in armed with all the facts from the briefingdocuments, the company accounts and the advice of an independant financial advisor.

My final point is on the perennial idea that it's okay to screw the terms and conditions of those not yet in the company so we don't have to fight with management is really starting to wear thin. When are people going to realise that these are our future work colleagues. Just remember the debacle that still is the college Atco wages and the effect that's had on the new colleague's you work with now. Think how much worse it will be when you try to justify your wonderfull pension while there busy doing financial gymnastics to get an okay one maybe if there lucky and the stockmarket doesn't imconveniently crash on them at the wrong moment.
No I don't think it's great, but in the same vain is it great to screw with our own pensions to protect the pension of those that are NOT employed by the company.

Is it perhaps naive to think that we would get any support from HMG or the public if we walk out of the door to protect the pension of schoolchildren who won't be employed by the company for another 10 years? I am willing to fight management tooth and nail for a justifiable cause, I believed that my pension is a justifiable cause and I believe that our unions have fought on our behalf and on behalf of those schoolchildren not employed by the country and they have done a fine job in protecting what is a great scheme for us and getting a fantastic scheme for future employees.
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Old 22nd Oct 2008, 06:48
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Extract from Unite's website outlining the consequences of closing Final Salary Schemes. Didn't hear much from Prospect on these issues during the briefing:

Final salary schemes - consequences of being closed to new entrants

This paper considers the consequences for a final salary funds of its being closed to new entrants, the effects on employer attitudes and behaviour and the possible consequences for scheme members future pensions and employment.

Recent survey data and our own experience indicate that the majority of final salary schemes are now closed to new entrants and more may follow. Trustees and negotiators need to consider carefully what the long term consequences of this will be.

Higher Contribution Rate

When a fund is closed there will be no new entrants, who would tend to be younger in age than the average of existing members, and the average age of the members will rise as time passes. With any pension scheme the cost of any defined level of member's benefits at retirement rises with age, as contributions are invested for a shorter time. So as the average age of members rises the average contribution rate will also rise. Depending on the actuarial method adopted this higher cost may be recognised at the time of closure or allowed to emerge at future successive valuations.

In a closed fund the proportion of the liabilities represented by pensioners and member close to retirement will increase more quickly over time than if the scheme were open. Trustees of such schemes will generally be advised and will tend to adopt more cautious investment policies. Such policies, typically a switch of investments from equities to bonds, will lead to estimated investment returns being lower and to the actuary advising that a higher contribution rate is needed.

Risks associated with future deficits

Where deficits arise in a scheme, the general practice is to express the deficit contribution as an additional contributions percentage for the employer in addition to the percentage contribution required for future service. As the number of active members gets smaller relative to the size of the fund the size of the additional contributions percentage for any deficit will get larger and the resultant figures will weigh heavily on employers perceptions of the cost of the scheme.

Likewise, where employers determine that they cannot afford the additional contributions for a deficit and decide to make an adjustment in the future benefits or member contributions to offset that cost, the size of the adjustments will become much greater.

Contribution rates in a closed scheme are in essence more volatile. Even if the employer recognises that, and they may well not have properly considered it, and suggest they are prepared to live with it their employees may feel that they will not and so feel threatened.

Widening cost gap vis a vis a DC scheme

Employers who close final salary schemes often offer a DC scheme instead to new employees. By their nature such schemes involve a fixed cost to the employer. At the time of closure there will be a perceived relationship between the cost of the old scheme and the cost of the new scheme.

As time goes on the cost gap is likely to rise on account of the factors driving rising costs in the final salary scheme. That cost gap may be enlarged greatly if further deficits emerge in the final salary scheme in the period following closure. This will make it much more likely that employers actions may be guided, whatever their original intentions, by the size of the cost gap. In effect they may begin to treat the final salary scheme more like a DC scheme by setting a limit on their future contribution.

Dividing the workforce and undermining opposition to future cutbacks

Employees may well object to scheme closures on the basis that the new DC scheme involves a lower rate of pension pay for new employees than for old employees. This may emerge in terms of lower benefits or through new members being required to pay higher contributions to their scheme in order to achieve a comparable level of benefit. It goes against the principle of people being paid the same 'rate for the job.'

New employees may resent the fact that their 'pension pay' is lower and come to feel that members of the final salary scheme are unfairly privileged.

The effects of a different pension scheme can divide the workforce and by doing so make it easier as time passes for an employer to impose changes.

Job security may be affected

Over time the higher pension costs of employees in a final salary scheme, relative to employees in a DC scheme may lead to a situation where the employer will seek to contrive that any job losses required are concentrated on the final salary scheme members.

Unions have always negotiated rates for new employees

In some companies it is established to varying extents that pension scheme benefits are negotiated. Just as employees would feel threatened by a situation where the employer brought in new employees on pay rates lower than those which had been negotiated so also will they feel threatened by new employees being brought in on pension terms inferior to those established for existing staff.

Unions will feel they negotiate pay rates for particular jobs and not just rates that are limited to particular individuals who hold them. If pay is negotiated for a bargaining group then unions are entitled to seek to negotiate pensions for that bargaining group. While employers may argue that pension terms for new employees are nothing to do with existing employees, those existing employees may take a different view.

Should you have faith in employer assurances?

While employers may say that existing employees are not affected and that there are no plans to change schemes for existing members they will never offer a guarantee to that effect – only for the foreseeable future.

Unions may feel that the new scheme and associated contribution are what the employer wants to pay for all employees and will have limited faith in any assurance or statement that existing employees will be protected or not affected. Such assurances may be accepted in good faith but employees equally are entitled to take the view that they are no more than a tactical ploy in a strategy to reduce all employees pay over a period of time.
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Old 22nd Oct 2008, 07:22
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I never trust NATS management, but the sorryest thing for me is that I don't trust the Prosect BEC either. What bribes have been promised to the negotiating team in return for a yes vote???
It is not only Prospect FFS-there are 3 unions involved here.

The second sentence is just scandalous based on what evidence?

I think a retraction is in order
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Old 22nd Oct 2008, 07:40
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Brummmbrumm said
Contributing at less than the underlying rate for the last 5 years does not change the underlying rate that needs to be paid today.
Are you sure about that??

Imagine you put £100 per month into a savings account. After 1 year the account has £1200 + interest earned.
Instead you decide only to pay in £80 per month. After 10 months there is only £800 +some interest (less than if you had paid the full £100).
For the remaining 2 months of the year you therefore have to pay in over £200 per month - enough to cover the missing capital and interest.

This is where I believe NATS is at - they have paid in less than the underlying rate (not to mention the pension holiday).
That means there is less in the pot than there should be and they now come crying to us wanting our support instead of paying in what they should




NO
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Old 22nd Oct 2008, 07:43
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250kts.....Bribes what bribes???.....just look at most of senior management over the last 25 years..........most at one time were our union reps.....read into that what you wish!!!!
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Old 22nd Oct 2008, 08:26
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99.99% of this thread is all about ATCOs. You'd think that they were the only staff employed by NATS, let alone affected by the proposals. Spare a thought for those of us who dont have the strength in numbers, nor the professional 'clout' which the ATCOs are always so keen on professing.

Should you be in a similar position to myself or any of my ATSA colleagues at LL, you would be looking at this issue in an entirely different light. Reduction in pension is one thing - no job at all is quite another.
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Old 22nd Oct 2008, 08:53
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Any news on that front pelagic? Rumour has it the FBU is about to go?
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Old 22nd Oct 2008, 08:59
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250 kts
What is scandalous is a SECRET report about our pension fund and no access for those most affected!
What is scandalous is elected reps blatantly disregarding policy and negotiating with management WITHOUT a mandate!
What is scandalous is NTUS reps (I do realise that there are 3 groups) trying to soft-soap memebers with glossy brouchures and slick selling techniques! Then scaremonger tactics when the selling doesn't work!
What is scandalous is thinking we are daft enough to believe or trust you any more.

Retraction; I don't think so. Time will tell!!

I'm VOTING NO
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Old 22nd Oct 2008, 09:16
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autothrottle

I'm sure a quick chat with our PCS reps will put you in the picture.

The Company has gone fckn mad - and not only over the pensions.
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Old 22nd Oct 2008, 09:58
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Are you sure about that??

Imagine you put £100 per month into a savings account. After 1 year the account has £1200 + interest earned.
Instead you decide only to pay in £80 per month. After 10 months there is only £800 +some interest (less than if you had paid the full £100).
For the remaining 2 months of the year you therefore have to pay in over £200 per month - enough to cover the missing capital and interest.

This is where I believe NATS is at - they have paid in less than the underlying rate (not to mention the pension holiday).
That means there is less in the pot than there should be and they now come crying to us wanting our support instead of paying in what they should
The underlying rate increases are not due to the decrease in the surplus. The underlying rate is as it is, a calculated figure based on a number of variables. the variables don't include the size of the surplus. The surplus is used after the underlying rate is known to mitigate how much of it has to be paid.

Like it or not, NATS has done nothing wrong by allowing the funding level to reduce to 100%. It's their perogative.

Now... The RPI= 0.5% cap directly addresses the underlying rate problem. Mercer's presentation states that they predict underlying rates (currently 40%+) coming down to 20-25% with the RPI cap and SMART pension changes.

What effect does closing the scheme have on this primary point of concern? Absolutely **** all. The closure to new entrants is pure opportunism.

I intend to vote no on that point.
SMART pensions is a no-brainer. There is no down side.
I could live with the RPI+0.5% cap since I don't think there's a chance we'd be getting more than that anyway.
I don't accept there's an urgent need to close the scheme and create a two-tier workforce. If the first two points reduced the underlying rate to 20% and the eventual return to stability of the markets saw a minor improvement in investment performance, NATS has no excuse for not being able to meet those liabilities.

P.S. I can't believe people are still ranting about not being allowed to view a document subject to formal non-disclosure agreements. Have you never signed a legally binding contract before? I doubt it.
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Old 22nd Oct 2008, 10:06
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BrummBrumm

its obvious that emotions are running high over the whole issue, but I think you may misunderstand some people... your statement that 'doing nothing is not an issue' is a statement that I reckon 100% of NATS staff agrees with.

The vote for 'yes' or 'no' is not about doing nothing or doing something, it's about whether doing what is proposed is the correct or best answer.

We are being sold the solution as a fait accompli - The briefings (mines is not til November) seem to be unable to make clear to people the bare facts.

People are still coming out of briefings confused and unsure as to what everything means... the briefings (it seems from various posts) are more geared to telling people we have a problem (everyone knows that) and this is the solution.

I for one am very uneasy about voting 'yes' for something so far reaching that I do not understand... to vote 'yes' in this circumstance would be totally reckless and stupid.

If I come away from a briefing fully conversant with the facts and I believe all other avenues have been explored, then i will vote 'yes'. I need to be happy thatI fully underrstand the issues though - not just pay lip service to what soemone else tells me, as opposed to properly explains to me.

I do not sit with the camp that believes letting the company go bust and getting re-nationalised is a good idea - it's wrong for so many reasons.

However I am still to be convinced that a company that manages to spunk so much cash on lavish events and ill-thought out projects that fail cannot stick it's corporate hand in its corporate pocket and take a bit of a hit to help the pensions.

It does not mean the company would have to go bust - we are being told left, right and centre how financially well off the company is. We, the employees, and the pension fund took the hit to help the company when we were saddled with government debt as part of PPP (remember the speech 'our skies are not for sale'?).

The company can afford to take more of a hit than the people at the top want it to - because taking more of a hit impinges on the financial health of the company (though not to a hugely detrimental effect) and makes those lovely bonuses less likely to come by.

Barron got a whopping pay rise - so what if he is a PCG? We are all in this company together PCG or not. It's the common workers who make the company so succesful, in conjunction with a hard nosed business orientated senior management. Therefore we should all be given the same recognition - and when needs be, we should all suffer the same to 'help' the company... the fat cats get away with huge bonuses and pay rises, then hide behind the PCG argument.

Barrons abilities as a business mogul do not make me any more efficient at shifting traffic, which at the end of the day is what NATS is mostly about, therefore why should my abilities result in his bonus???

We are being asked to trust a management without being made fully conversant of the facts and without fully understanding the implications.

We were promised by Labour that 'Our skies were not for sale'.

They then sold us and saddled us with hundreds of millions of debt.

We were promised that the pension contribution holidays (that NATS came to us cap in hand for) would not affect the pension.

We are now being told the pension is in trouble (and before you start, I know it has to do with a hell of a lot more than the contribution breaks).

We are being told that NSL is not being set up for sale, we are being told that we will have a 15 year MoU.

Do you trust this company that much to swallow these latest statements?

What exactly is a Memorandum of Understanding worth?? Not the paper it's written on to be honest, it's an understanding, not a legally bindingdocument. It's something that can be torn up willy nilly in the future with the comments "sorry, but it doesn't suit us anymore"

Staff are not willing to vote 'yes' because they still feel they are not fully conversant with all the facts. If this issue was addressed, then maybe the staff would change their mind. There is a huge amount of misrust over past promises, this is carried over to the pension issue. Unless management and the Union address this by making sure people understand the facts, then people will vote 'no'.

Although I fully agree that we need to take measures to help the pension, unless I am made to understand one hundred percent the facts and figures and that this is the only option, I will vote 'no'. If I have any lingering belief that there may be other less staff orientated and more company orientated methods of solving this, I will vote 'no'.
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Old 22nd Oct 2008, 10:13
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Brummbrumm said : "I didn't. I went in armed with all the facts from the briefingdocuments, the company accounts and the advice of an independant financial advisor."

The briefing documents you mention here I assume was that lovely expensive glossy pamphlet sent out by NATS and NTUS designed to get everyone on side with the idea's that WE need to do something to OUR pension because THEY ran the surplus down to the bare minimum so there was no room to manoevure when the markets fell.

not be in quite as mucg deficit as it was at the Sept 08 valuation (£595m)

These monthly figures given at the briefing were a ridiculous bit of scaremongering I doubt that with the sudden collapse of the markets that any pension fund would have looked rosy in September. The guy from Mercer at the meeting even stated that the £500 million deficit was a short term thing as the markets would recover.

The thing all the YES voters seem to be overlooking is that the company doesn't need to find £120 million a year to fund the Pension they need to find an extra £65 million in 2010 to fund the pension if the 2009 triennial review keeeps the underlying rate at 42%. Now I'm no financial genius but I think that we made £65 million profit this year and that doesn't even take in to account all the money wasted by NATS on repaying loans early and the subsequent penalties in doing so.
As the wonderful story on NATSNET said the company is financially sound and making money.
The company will not go bust because of our Pension it will if our management keep negotiating NSL contracts that don't cover our costs and agreeing to the CAA's price capping without argument.
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Old 22nd Oct 2008, 11:13
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Anotherthing,
Top post....you've just about hit the nail on the head with every point there.
I think people should consider, too, that as well as destroying our pension, voting this piece of rubbish in will leave us totally dead in the water when it comes to any future negotiation over ANY change to our t & c. Theres a lot at stake here and the figures don't tell the whole story.
I'd also like to reiterate the point to those outside of NERL that NONE of us, certainly nobody I work with anyway, thinks that we should shaft NSL as a way of getting what we want. The Union rep who told you PF and PH guys and gals that NERL doesn't give a s**t about you is totally out of order. If anything, we are more concerned because fattening you guys up for a potential sale makes us ALL weaker in the long run.
Unite and vote NO.
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Old 22nd Oct 2008, 14:39
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Is it possible that Nats wanted this year's profit to be as low as possible to quote to us i.e £60m in order to scare us into accepting these changes, loans paid back early would certainly have affected this figure, and obviously cost of relocating TC etc. They can then use this £60m figure and say that there is no way they can afford to pay double this to cover the underlying cost of the pension. They knew profits would take a hit this year because of the cost of relocating TC, EGLL tower etc, so payback a few loans owed to our shareholders to massage the figures even more in their favour, combine this then with already forecast problems with the pension funding, and bingo, scare us into not only closing the fund to new entrants but cutting ours as well.

Maybe being cynical, but Barron and Co may have had this in the pipeline since he joined, he has good form on destroying pensions and was probably taken on by the board to to exactly this.
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Old 22nd Oct 2008, 15:19
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Paying back the loans early was a sensible financial move.

These were loans given to NATS when it was in a dire financial situation, at very high rates. Paying them back at point when the company could afford to take the hit will save money in the long term on the interest payments. It also was a huge factor in the last re-valuation of our share value showing an increase - even against a fall in operating profit.

I'm against closing the scheme... but less red herrings please.
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Old 22nd Oct 2008, 16:33
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There are a lot of people here with very short memories.

The NATS obligation is to keep the pension fund at 100%. They have done that to date and as far as I can see from the proposals are not suggesting anything but doing that in the future.

At the time that the pension holiday was agreed the tax laws were such that pension funds were not allowed to carry large surpluses. That has changed since with amendments to pension legislation but at the time there was actually a requirement to reduce the surplus.

The surplus was not just reduced by the pension holiday. It was split between NATS and employees with NATS getting a pension holiday and the employees getting a reduction in contributions. Previous surpluses were mostly used to improve pension benefits. Although the surplus has now gone and NATS has resumed contributions we will continue to enjoy taking our part of the surplus until we cease to be members of the scheme. In my case I hope that will be a very long time. Those of us in NATS at the time had the opportunity to attend meetings and vote on that and, although some of us cautioned against that decision, the majority of union members voted to take the benefits offered to them in exchange for NATS taking its share as a pension holiday. Anybody who was a union member at the time is probably more responsible for the depreciating surplus than Paul Barron or Phil James neither of whom were members of the executive at the time.
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