I agree 100%, NATS should not have been saddled with the debt as it was. But thats what was done.

You need to understand how the regulator works things out. When NATS submits its accounts the regulator goes through them with a fine tooth comb. NATS has to have put together a business plan which includes things like infrastructure investment, R&D, staff wages, pensions etc. The regulator looks at all the figures and if, for example, NATS underspent 10% on its investment proposal one year then the regulator would cut what it'll allow in the next years investment proposal. From all those figures it works out what NATS are allowed to charge.
Because NATS is a monopoly, regulated by government, it cannot charge what it likes and it would like to include pension costs but the regulator has already clamped down on that for people joining as at 1st Jan 2006. The regulator decides on what NATS may charge. Airlines are not regulated by government in this way and any pension charges they make are (as you rightly state) in the ticket price. Remember that the airlines have to be competitive or they go out of business, so they're squeezing pension costs hard (those airlines that have such schemes).

Hope that makes things clearer.

BD

BD.

I Do not agree with your "deductions"

Yes, NATS must pay into CAAPS.The rest of the sentence doesn't make sense (nor is it strictly gramatical)

CAAPS is actually performing VERY WELL. There is no evidence that it will not continue to do so. Just becasue other schemes etc etc....

More supposition, or if you prefer, guess work. It can equally be argued that there will no need to increase contributions. (Don't forget NATS has had a pensions holiday because CAAPS is doing so well)

"If" NATS goes bust, bears some examination. Would any UK government let NATS go to the wall? I think not, especially as it owns 49% of the company.

NATS does not need to make HUGE profits. The regulator is there is ensure that NATS does not abuse it's monopoly in trying to do so.

NATS can well afford it's CAAPS obligations, now and in the future. It might be squeezed a bit (or might not) and might not be able to make big a profit in the future.

BEX.

Apologies for my poor English. The surplus that CAAPS makes (its profit) is being used by NATS to offset its own contributions.
It performs well in part because NATS continues to pump funds into it. Neither you nor I can forecast the money markets (or we wouldn't be discussing CAAPS pensions!) but experience shows that they go up and down. If they go down.............
Yes a guess because I cannot see into the future but I do prefer to look at worst case scenario's when my pension is at stake. How many thousands of people got bitten by endowment policies which looked OK when they took them out?
One word. Railtrack.
But as I explained the regulator has signalled, very clearly, its intent to force NATS into taking action over pensions. NATS affords its obligations now because the regulator is allowing the cost to be passed onto the airlines. Its signalling that in future it will not allow this.

Am I missing the point somewhere?

BD

And what ACTUALLY happened to the Railtrack pension fund after the company was returned to a "not for profit company?" Terms and conditions for most of the workforce didn't change, although a 100 or so managers were made redundant.

Losers were those who held large amonts of shares in Railtrack, not the workforce.

Yes, i think you are. The regulator is there to make sure NATS doesn't abuse it's monopoly status. There is no evidence to suggest that NATS cannot fund its CAAPS obligations without "pass-through", it simply won't be in a position to make BIG profits.

Smaller profits are more of a worry to businessmen like barron, whose whole philosophy leans towards maximising profit at all costs.

BEX

Its an example of how this government will lie to push companies into receivership and back into public ownership.
One the one hand you acknowledge that the regulator regulates what profit NATS makes but on the other you state that Paul Barrons intent is to maximise profit. Which is it because both cannot be correct?

BD

Short term, they can be. barron is trying to maximise profits now, before the next CP, and his own departure.

:confused: If he's leaving a company, who's profits are regulated, why bother to attempt to maximise them when there will be no benefit to him?

I really don't understand what your view is and I'm certain everyone else is getting as bored as I am with this exchange.

BD

To be honest, this is one of the best discussions I've experienced about the pensions issues. I'd like to congratulate both of you on what is a very measured and deep exploration of what both management and unions are trying to establish as fact.

Please don't feel you have to stop on our behalf.

BD
 

I have to take issue with some of your supposed 'facts' :=
1) The regulator has NOT said that NATS must reduce its pension costs. If you think otherwise, please, please tell me where and what they have said !!
If you have taken the time to read cp2 and the Airlines response to it, you can see what was actually said.
"For instance, it would be unacceptable if NATS were able to benefit from savings in operating expenditure such as those that could be made by cutting back on pension contributions, at the expense of higher costs in future."
ie. don't cut back on contributions now, then ask us to make them up in the future. It doesn't say you must cut your pension costs !! :p
2) All companies pass their costs onto their customers, pensions included. NATS is no different in this. More so, NATS only pay a rate of 12.2% into pensions. This is considerably lower than most companies. To save money on pensions, this rate would need to be reduced even further. So just how little do they want to pay towards pensions?? :p
3) Yes, the AIrline Group 'bailed' NATS out after 9/11 BUT with the help of our pension fund. NATS rate before 9/11 was about 16%, they then paid 0% for several years and now are only at 12.2%. :p
4) NATS are NOT pumping huge sums into the pension scheme. They contribute 12.2% (about £30 million) a year into a fund worth over £2000 million. :p
5) The surplus has dropped due to lower NATS contributions, Pension Holidays, Equity market crash in 1990 and 9/11. Yet, it still is in surplus and subsidising NATS conributions which are lower than they were prior to 9/11 (12.2% vs 16%). Also, the markets are reaching their highest levels since the 'crash' and there is no reason to believe that after the triennial revue, the SURPLUS WILL HAVE INCREASED to well over £200million.
The market performance is better now than 10yrs ago when our pensions subsidised NATS. :p
I thank you for your time and indulgence :D

I agree with Asda :D

A matter of interpretation methinks ;) How do we know what the future markets will be giving in the way of returns on investments? Since the impact of reducing future pension costs will take years to achieve I think action has to be taken now. I note you make no mention of the regulator ceasing to allow pass through of pension costs for new employees. Why did they do that do you think?
But NATS is different in that its a monopoly and its regulated by the government, other companies are regulated (for want of a better word) by market forces. In addition the regulator has stopped allowing NATS to pass through pension costs for new staff. No other company has this burden AFAIK.
Because its currently using the CAAPS surplus to make up the 'shortfall'. I believe the figures are that NATS should be contributing 28%. That NATS is fortunate enough to be able to use the 'surplus' is all due to sound investment and proper funding over the years.
How do you predict the future and know that the market will give reasonable returns in the future so that NATS could continue to fund the 'shortfall' with the CAAPS surplus? Remember that CAAPS must pay out until everyone is dead.
As they're entitled to do, what they're not entitled to do is to jeopardise the fund.
£30m is a bit more than my take home ;)
Your point being what? NATS are still making contributions and they're increasing as they're being squeezed on passing through pension costs to their customers..
Whats 10 years in the timescales of our lifetimes? How do you know what the markets going to be doing in 10 years? Or when I retire? Or when I'll statistically die? Or when my wife will statistically die? There is no reason to suppose that the surplus will not have ceased to exist in the future. Myself I take a pessimistic view and I want to protect my pension. The whole discussion about pensions is about closing CAAPS to new staff, not about affecting current members pensions.
And I thank you for a well argued and reasoned rebuttal of my posts to date :) Its a first :D

BD

...... and the management Spin goes on.......

BEX

Keep it up lads... if nothing else its getting everyone (me included) aware of all the arguments on either side, and also clearing misconceptions up :ok:

BDiNOU

an old chestnut but in your rebuttal to Jonny B, one of the things you said was

You are 100% correct, it is a monopoly, it always has been and it probably always will be. Thats how succesive Governements set it up. Thats how it was when it was sold (against all the experts wishes), thats how the regulator has always known it.

The fact it is a monopoly and therefore not regulated by competition is not our problem. And it is certainly not any kind of excuse for management to p:mad: around with our pensions. :*

Thanks to all for explaining how NATS makes it money!!!! To be totally honest I don't care. My job is to control planes in "a safe and orderly" way. With the invaluble help of ATSA's and Engineers we provide an ATC service.This is what NATS does, this is what it's function is.

At the end of each month I receive a nice wage, and at the end of 30ish years work I WANT to receive a nice pension, after all I will of earned it.The pension scheme is in profit, leave it alone.

These are the basic facts, forgotten by all management types especially "the Barron"

Ask the question...If NATS pays 12.2% salary into the pension fund, how much as a percentage of pay do they pay into Paul Barron's pension pot? You can get the company accounts online as we are a PLC, but I seem to recall a figure in excess of 250K per annum! Nice work if you can get it!!!
Anyone who thinks that this is a course of action that can be got away with is quite frankly mad. I cannot think of a single issue that is more likely to unite NSL and NERL and have us ALL out on the picket line if neccesary. Divide and conquer my a£$e. Light the braziers, I'm ready to rant!!!!!!!!!!!
PS...Join the union now!!! If there was ever a time to stick together, this is it...

So he managed to negotiate great terms and conditions before agreeing to work for NATS and you didn't. Jealousy is no reason to strike IMHO.

BD

No, jealousy is not a reason to strike. Hypocracy is though.
Besides, I did negotiate great terms and conditions before I agreed to join NATS. Part of this was the NATS pension scheme. This is under threat and I and many others think this calls for action. IMHO!!!

Hear Hear :D :D :D

Can you explain how CAAPS is under threat?

BD

Pikman

My understanding is slightly different to yours and I would like to be clear...

I was party to a discussion about this with a NATS senior manager last week. Now I know he is NATS management and he will be spouting the company line but he did clearly state what I have heard on many occasions from other quarters...

The only risk to CAAPS and current employee's pensions is NATS going bust. Anybody who has a pension in the current scheme is protected by act of parliament. It would take a new act of parliament to change that or 100% vote of the members.

Assuming that to be correct, it seems to me that our pensions are not at risk. What is at risk are our future terms and conditions of employment because it seems NATS will use these to try and lever us out of the existing pension? So any future fight will be over pay rises, not pensions.

If that accurately sums up the position then it seems to me that any industrial action cannot be over pensions? If those in the existing scheme strike, won't management ask "What are you striking for, your pension is not affected." What answer would we have to that?

.4

120.4, that's my understanding also. I'm going to be receiving a briefing on the pensions issue from Prospect soon, so I hope to get a better idea of the current union thoughts from that.

120.4

Which is why I suspect that ATCO's would be excluded from any change (see my above post).

Also, as others have rightly said, NATS has a habit of of painting a black picture then presenting a package which is far less draconian. Staff think, "Well it could have been a lot worse", and are less inclined to resist.

I used to be suprised as to how gutless NATS ATCO's are. Many of our continental colleagues have far superior T&C than ours, mostly obtained by summer industrial action. I wish we would do the same. It would certainly clarify a few minds in a number of offices along the M27 and in Whitehall.

As other companies pension schemes have been scrapped I can't see why ours would be so protected. If it is so protected then why are the unions concerned about it ?

It has just been confirmed to me by another senior source that the existing pension cannot be touched so long as NATS remains solvent (excluding a 100% vote or Act of Parliament).

He also opined that future pay differentials are a risky and needless strategy for NATS because setting up a new pension scheme for new employees addresses the issue at hand and also sends the right signal to the regulator. Having achieved that, a question for the NATS board would then be, "What is the point in picking a fight with the unions by trying to introduce pay differentials when the longterm aim has been met?". Would the upset to the service and bad publicity be worth the short term gain to NATS when they have got what they really want, i.e. control of the longterm liability?

So, if there is to be no impact on our pension and if there is little risk of the board picking a fight over differentials, I have to ask the question again...

What would we be striking for? Make that clear to me and I will consider supporting it.

.4

"It has just been confirmed to me by another senior source that the existing pension cannot be touched so long as NATS remains solvent (excluding a 100% vote or Act of Parliament). "

It has just been confirmed to me by another senior citizen source that "we're all going on (another) pension holiday"

Keep the tinder dry folks!!

Pensions....the Facts !! ??
 

BDI :E
Yet another rebuffal, I'm sorry to say: :=
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1) The reason the regulator has stopped pass through for new employees, and wishes to do so for all, is for the very reason explained earlier. It does not wish NATS to make short-term savings by cutting its contributions rates now, only to go to the airlines in a few year and say...oops, we have a shortfall so you need to make it up, please !!
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2) Yes, in enroute, NATS is a 'monopoly'. BUT this pass through is a red herring. ALL companies, even regulated monopolies pass their pension costs onto their customers. You say NATS has the burden of not having 'pass through'. Well, please show me another regulated monoploy which does ?? NATS is no different from anyone else operating in a regulated environment.
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Also, NATS only pay in 12.2%, a very low % by todays standards. YES, this is supported by the surplus, a surplus which appears to be increasing (as the triennial revue should soon show), and the surplus is the figure left over AFTER ALL members are paid their pensions (and future payments are included in this).
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3) YES, NATS are entitled to contribute at a rate of 12.2% and not 16% as they previously did. However, they are legally obliged to contribute at a rate which ensures the Pension Fund can meet all its commitments. Obviously, they therefore feel the scheme is doing so well, they need not contribute more (point of interest, the pass through is set at about 19% at the moment if they felt there was any looming problem with the fund!!)
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4) I'm guessing that you agree with me that £30million a year into our pension fund is actually a small amount of money in corporate terms. A 12.2% rate is relatively small as a company contribution and the scheme is almost 'Self-funding' being worth over £2billion !! :O
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5) Please stick to the facts...NATS contributions are not rising. They were 16% prior to 9/11. They then feel to 0%, and are only at 12.2% now, with the surplus increasing year on year (see NATS own publised accounts).
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Also, pensions are a long-term investment. YES, 10 yrs is a short time, it was used to show that the only time our HUGE surplus feel was after the equity crash from 9/11. Prior and post that, our savvy investers have consistently out performed the required market return, hence the HUGE surplus is continuing to grow, even after pensions holidays and lower contributions from NATS.
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Surely we do not want to go down the road of a 2 Tier NATS, with people doing the same job being paid differently (Yes, pensions is a payment). When payments from new members stop entering the current scheme, it makes the scheme more at risk as any long-term growth potential is removed. If there ever was another bad market crash, the scheme would then be more likely to face difficulty.
ONE NATS ONE PENSION :ok: :ok:

You're entitled :) Nothing much that I can rebutt though as most things we agree on, its simply a matter of interpretation. Although I'm not aware of the details of any other monopoly regulated by government as NATS is.

Sigh. As the regulator has fired the warning shot of ceasing to allow pass through its inevitable that NATS conributions over the years must increase (although employee contributions are only 6%). Yes the fund is doing well at the moment but if it ceases to do well NATS must (by law) make up the shortfall every year.

And thats different to how things are now in what way? Yes it would make a slight difference in negotiated grades (dependent on what the replacement scheme is and remember that no one forces you to work for NATS, new people have a choice) but not to Personal Contract employees. Also, without going too far down this route, it wouldn't be different to, for example, ATC (T&S) grades who do what were formerly ATCO desk jobs for less money and without the 'benefit' of shift pay (NOS) which ATCO's will always get, irrespective if its been 30 years since they last controlled an aircraft or worked a shift.
I disagree. Members pay only a 6% contribution (NATS pays 12.2%) but eventually receive a VERY substantial return. NATS is obligated, by law, to ensuring that the pension scheme has sufficient funds to be able to pay out everything its committed to. CAAPS, like every pension fund since the Thatcher days, is capped on its 'profit' which must be ploughed back in or distributed to its members somehow. BTW you're also arguing both sides here, on the one hand how brilliantly the fund is doing with its large surplus (which gets ploughed back in) and on the other how it would be doom and gloom if there were a crash. :}

BD

I've got to agree with many others: this is by far one of the best discussions I have seen in the ATC forum for quite some time.
Whilst NATS' percentage contributions may not have risen, every time we get a pay rise, they're actual contributions rise.

Sorry for the further late response, just wanted to be clear on something.

Are you saying that NATS must never change any of its Terms & Conditions of employment (because thats what pay and pensions come under)?

Are you saying that if NATS closes CAAPS to new employees, who will be aware of the changed T&C's and will have made a conscious choice to work for NATS anyway, that NATS staff should take industrial action?

Are you saying that current NATS staff should take industrial action to 'protect' the T&C's of people who don't even work for the company yet, aren't forced to work for the company and will be aware of the companies T&C's before they sign on the dotted line?


BD

Here's my viewpoint on the pensions debate.

I think the real reason why Barron is proposing these changes is to prepare NATS for full flotation on the stock market. Any reduction to the contributions made by NATS will make the company appear to be a better investment for any would-be future shareholders and also increase the 'windfall' that the government would make by selling its 49% stake which of course would then be used to bribe the UK voters with lower taxes in the run up to the next election.

People keep saying over and over again that we are protected by 'the trust of a promise' whatever the heck that means??? which is guaranteed by law. This law is not worth the paper it's printed on - I bet the government has already drafted a change in legislation that would be implemented within weeks of a change of the NATS pension which would then be followed closely by flotation.

Some may say that NATS is too small to warrant such a change in law but we all know that when it comes to plundering our hard earned cash this government will stop at NOTHING to get whatever they can.

Recon you may be right, but I suspect that this is all heading towards a break up of the company and the pensions issue is really a smoke-screen. Unlike NERL, there is no strategic/national security issue which could be pulled out of the hat by opponents of a 100% sell-off of NSL.

The one problem for Mgt in order to do this is the Pension Scheme - in its current form.

No private company like SERCO or whomever would be willing to take on NSL with the current scheme in place and the surest way of solving that problem is to wind up the existing scheme and open new ones which distinguish between NSL and NERL.

Like I say, I suspect there is a bigger issue here than just pensions.

Hang on, the pension fund is worth £2 billion and the company is putting in £30 million a year?

1.5%?

CAAPS could put the entire pension fund in a current account and still grow twice as fast as with NATS contributions.
NATS' contributions are a drop in the ocean so far as the fund is concerned and still they're trying to reduce their (overall) payments.
The numbers we're presented with from management (and BDionu:eek: ) don't stack up.
We need to see a strong rebuttal from the union.


I really wouldn't believe any 'senior management' sources that anyone is privy to, there's a lot of incentive to sell this one to the troops.

[QUOTE I bet the government has already drafted a change in legislation that would be implemented within weeks of a change of the NATS pension which would then be followed closely by flotation.
[/QUOTE]

Dunebug

What you are saying is that the government intends to use valuable time in Parliament to get a bill through so that it can more easily sell off NATS for... how much?

I doubt there is sufficient value to merit what would surely be seen as a blatant back tracking on the PPP arrangements. It would surely suggest to the country that parliament was abused by the government in order to get around a difficult issue that was likely to prevent PPP. I suggest the political dangers in that are immense. This country has little trust in this government as it is; such an admission of the mistreatment of Parliament would hardly encourage trust of government in the run up to the next election.

I could yet be proven wrong but I just don't see that; it's Political suicide.:=

.4

DP

I understand the fears. If the "strong rebuttal" you seek involves strike action then the first question I will ask the union is...

If the law says CAAPS cannot be touched, and there is little risk of the introduction of pay differentials (no need to take on the troops over that if what they really want is in the bag), what would we go on strike for?

There is no way I am going to vote to strike unless there is a "clear and present danger" of serious errosion of my T&C.

.4

Bit of history of the reasons behind PPP as it relates to NATS.

The Tory government pre 1997 had already earmarked NATS for sale, and had already budgeted for it's sale bringing in many million quids. Cue much hand wringing from the then Labour opposition, including the infamous "our air is not for sale" statement. (Sounds like "your pensions are safe", doesn't it? but I digress......)

1997 arrives and Gordon arrives at No.11, finding finances in a shambles. First thing he does though is ADOPT all the financial plans already in place, and puts a stop to any further borrowing. No tax and spend Chancellor will Gordo be, no siree. But there's a problem. £750m of a problem. Without the sale of NATS, which is against Labour policy, poor old Gordo is short of said £750m.

Solution, change policy like the wind. Use your majority in Parliament to force the sale of NATS through, as least a bit of it that rasies enough cash. Appease the masses with some claptrap about pension protection (you can always change this later when no-one's looking, say on Friday when something bad has happened in Iraq / Afganistan etc etc) and Robert's your Uncle.

Gordon fills the hole in the accounts, and also tidily sidesteps questions about CAA NATS future investment.

Governments can and do change policy, and legislation, at the drop of a hat when it suits them or their friends. The union did their very best to protect CAAPS both at the time of PPP, and after NATS enforced split from the CAA. The legislation is only as watertight as the Govenment will allow it to be. Do you trust the politicians?

I don't trust them an inch, they can and do change with the wind. We only have to look at the latest (and fastest) U-turn over the compulsory requirement to have 25% of children in faith schools not of that schools faith or of non-faith. I think that took 6 days from full steam ahead to full reverse.

However this is a red herring concerning closing CAAPS off to new entrants (which is what we're discussing). If the government want to change the law concerning CAAPS so they can do a Maxwell and plunder it then they will, irrespective of whether or it its been closed off to new members.

BD

Quite! What've we seen so far........

BD

Quick Response....
 

Lets get something straight....
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CAAPS, Deed of Trust/Promise is extremely good protection. It makes it very difficult for changes to be made in the current scheme but only relates to members of the scheme prior to July 2001. There are employees who are not protected by it !! The TRUST/DEED is NOT PERFECT, but it is as good as the unions could get for PPP.
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NATS, under PPP, was set up as a NOT FOR PROFIT company, but look how, in such a short time, things have already changed in that respect !!
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In the latest NATS Pension Presentation, and interesting point they made was
"The Trustees cannot return any surplus in the scheme to NATS."
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mmmmh!! Do I detect they wish to get their hands on the £200million in OUR Pension Scheme ?? No, surely not !! HaHa.....
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Why is there such a rush to sell this one to Staff and not await the results of the Triennial Revue being carried out this month, with results due in March. Surely you would want to know exactly what is happening with the scheme before you make any hasty decisions ??
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I am going to lay my cards on the table here for BDI and others who support the changes...
-:ugh:
WHY NOT AWAIT THE TRIENNIAL REVUE IN MARCH 2007, SEE THE TRUE STATE OF THE SCHEME AND WHAT THE INDEPENDANT SCHEME ACTUARIE SAYS THE FUTURE HOLDS, THEN ACT ON WHAT THE TRUSTEES REQUIRE. ALL THESE PEOPLE INVOLVED ARE LEGALLY BOUND TO ENSURE THE BEST RESULTS FOR THE MEMBERS OF THE SCHEME. LET THEM DO THEIR JOBS !!-
-:ugh:
If they say the scheme is in difficulty, trust me, I will be the first to demand action be taken. If the scheme is fine, then, If it aint broke, don't fix it !!-
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PS......Glad everyone is enjoying the debate, but please, please....don't blindly believe everything you are told. ASK questions, of both sides, find out the facts for yourself, and finally make your own decision.
Cheers guys/gals. :ok:

You mean in the same way as they said "our air is not for sale"

Simple. We're not talking about now, we're talking about the future, the next 10 or 20 or 30 or 40 or 50 or 60 or 70 years. I feel like I'm going round in ever decreasing circles but to make the point once more. The regulator has clearly told NATS to sort out its pension contributions, it has ceased allowing pass through of pension costs for anyone joining after 1 Jan 2006. Undoubtedly it WILL do more as we enter 'negotiation' for CP3 if NATS does nothing now. NATS costs increase but its charges do not, NATS goes bust and our pensions get hit HARD.

BD