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 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 :ugh:) - because one way or another they are either incompetent and/or underhand.

Asda

Not quite right I'm afraid. The scheme is protected through the protection to the Trust Deed afforded by the Transport Act and that protection applies to all members whenever they joined so they can't reduce the benefits of anybody who is already a member.

The Trust of Promise stops them forcing anybody out of the scheme. That only applies to those who were in the scheme in July 2001. The continuation of the Trust of Promise must be a condition if NATS is sold in the normal way so that protection would continue if NATS is sold but, very importantly, the Trust of Promise does not apply if NATS goes bust. Currently post PPP members have some rights to continuation in the scheme afforded by TUPE and other legislation which protects your terms and conditions but not as much as pre PPP members. If NATS goes bust we all have the same legal protection. The Memorandum of Understanding will probably give post PPP members a bit more protection than they currently have but as nobody has actually seen this proposed document we can't know for sure.

barstewards

You are still confusing profit with spare cash. The regulator has allowed NATS to make that profit only to fund the investment programme. If you work in NERL in the South you are sitting in front of that profit everytime you go to work, if you work in Scotland you have to look across the car park to see it. If that profit is not invested the regulator will quickly step in and either make NATS invest it or reduce charges by that amount. Those sums of money can not be used to fund your pension or any other normal running cost.

Did NATS pay off the shareholder loans with cash ? If you read the NERL accounts as well as the NATS ones I think you'll find that it's really re-financed that loan. That's good business sense, why pay 12.5% when most of your borrowing is between 5 and 8%, but the company is not significantly richer as a result. Why the emphasis on "EARLY" ? My credit card balance doesn't have to be paid off every month but I'd be stupid if I left the balance there when I could pay it off.

£120 million is a lot of money and it seems to me that it would be very hard to hide that amount in the accounts but I haven't been able to find it, perhaps you can.

You may be able to find the money year on year to fund the pension at 40% underlying rate but unless the regulator agrees to pass through those costs I can't and neither could the experts that NTUS consulted.

eglnyt Excellent post #1203 I've alluded to the same in earlier posts but I have to temper my posts as I'm viewed as a kiss ass management lackey by some contributors, so not worth my posting.

I'd be interested to know if any of the operational staff were aware that the company is £50million short in funding in CP2? Thats forecast and committed investment spend against actual revenue coming in. Expect project cancellations & shelving.

A word on celebrating success parties etc. All gone, there is no money. Nowadays in the company the reward for doing a good job is no punishment :}

BD

eglnyt
 

The point so many have tried to make is that pension-holiday money might have been used for some of the inappropriate purposes you suggest. Please don't insult an intelligent workforce by inferring that the accounts are anything but a smoke-and-mirrors exercise for the gullible....a masterpiece of creativity and denial.
Business costs include many elements, among them for example are wages and pensions.....a competent management plans a financial strategy to fund all expenditure both current and predicted.
Always remember this....if management were any good they would not be working for us.

All financial accounting is smoke and mirrors and NATS is no exception. The slight difference is that NERL does everything in the spotlight of regulation so it's all out there if you want to look. It's quite hard to plan a half decent conspiracy if you have to publish everything and the regulator has plenty of staff more than qualified in unravelling the NATS accounts.

Interestingly that's exactly why we've been having this debate over 1205 posts. NATS management has identified a hole in the accounts and the need to do something about it. I don't like the fact there is a hole and I'm not happy with the effect on my pension but I'd rather we were having this conversation than it being put in the too hard drawer until it's too late. Like NATS and the NTUS I don't think doing nothing is an option.
Presumably you could argue the same about all of us who could earn more elsewhere. In my opinion this particular set of management are better than those that went before them. That doesn't mean there isn't better out there and it doesn't mean I like the pressures that come from being a company rather than a cosy Government agency but they have far more idea of real management than the time served people who previously occupied those posts. Given the cards the Government dealt them post PPP I think they've done as well as could be expected, we will never know if somebody else could have done better.

The pension holiday saved NATS from going under. If you don't believe that take a look at the two reports written by the National Audit Office, they are both available on line. If you think it was used instead for inappropriate purposes I'd like to see the evidence for that.

eglnyt

I don't think anyone is confusing profit for spare cash. The £60m profit this year is the final figure in the finance sheet (i.e what's left after EVERYTHING has gone into the NATS bank account and EVERYTHING has been paid...including pension costs!!) so the pensions have already been paid before the profit is even announced.

Now if you have an extra £150m (or whatever barstewards figures come to...i'm far too hungover to add them all up:}) in the bank then it clearly becomes easy to pay the £125m pension costs, and still have money left over which can then be posted as a profit...whether the regulator lets us keep that profit or not is another question, but the point is, the increased pension costs have been paid using the extra money from not repaying loans etc!

Simple question...had the £80m(???) NOT been repaid early, what would the profit figure have been?:confused:

Seems fairly straight forward to me, but as mentioned, I am hungover!!:yuk:

FB:ok:

The profit is the final figure after everything has been paid but it's only there because the Regulator allows it to be. The Regulator and NATS agree the amount of investment required and the scales of charges are set to allow, if all the smoke and mirrors are in the right place, that amount of profit to drop out the end. The profit is then scooped up and used to pay for capital investment. If NATS used the money to fund pensions it won't drop out the end and can't be used for investment. At that point the Regulator is going to be a little bit upset because he only agreed the scale of charges on the basis that the profit would be used for investment. Now he might just say never mind but somehow I doubt it.

Simple question...had the £80m(???) NOT been repaid early, what would the profit figure have been?

Simple question but no simple answer. If they repaid the loans of out of cash the profit would have been £80 million more. If they repaid the loans out of different borrowing the profit would be the same. The answer is somewhere in the middle but probably much nearer the same than £80 million more.

OK guys lets have a show of hands...who are the crazy ones on here that are going to vote yes??......and another thing who are the crazy ones that have not sold their shares back!! I reckon valuation in january will be 40% down on present value!!

Does not the regulator only apply to NERL not NSL?

If so should not the fund be split in two so that they can then be financed under the rule as there is an argument that NSL's pot is being retricted by NERL?

I know that NERL makes more money than NSL but NSL is not retricted by CP2 and 3.

The above are all talking points only, I don't think that we should be split up, and our pension should be left alone. If you vote yes NSL WILL be sold off in the next few years.

You are quite right NSL could potentially still fund the current pension if its customers are willing to bear the extra cost. The amount of profit on each airport contract is commercially sensitive and not published so we don't know which, if any, airports could support that extra cost. It is unlikely that many of the current contracts could and equally unlikely that many of the airports would be happy to negotiate new contracts with that kind of rise in cost. Certainly NATS management don't think they would if you look at the yellow posts in the NATSNET discussion.

NSL may be sold off or it may not. This particular vote won't make much difference to that outcome as the "new" pension arrangements will still be viewed as quite expensive by many potential suitors.

Could you expand on your statement that the Regulator only allows NATS to make a profit in order to fund the investment program.

If your statement is factually correct then how is NATS allowed to pass on profits as dividend payments to shareholders?






A dividend is a part of the company's profits that is given to shareholders.

Paying dividends and paying tax | Business Link


Dividends are payments made by a corporation to its shareholder members. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend.

Working in a glorified call centre .. ?
 

Interesting Sunday Herald article about absenteeism rates. At least somebody holds us in high regard, even if our managers don't.

Statements like this should not be used unless you have 100% evidence that it is true. You made finite statement and I hazard a guess that you have absolutely nothing to go on except speculation. It is a dangerous thing to do and somewhat unfair to those people who read this and do not fully understand the debate.
This is exactly the situation. Our pension is still terribly expensive and these changes do nto make it any more attractive. Not in the slightest! Besides, why would NATS sell of NSL when it is one of the main contributors to NATS debt and costs?! Remember NSL is unrestricted... (Now we just need some better negotiators... :})

I was sure the pension briefing was quite clear that the pension holiday never saved us from going under, it helped our cash flow but it was only the new investment from HMG and BAA that saved us from going bust.

If NATS didn't pay off the £65 million loan early* (plus £15 million early redemption charge) then profits would have been considerably higher, there is no doubt about this. Profits in the future will also be higher because of this early repayment.


*Your credit card analogy is erroneous. Loans and mortgages are structured over a defined period of time to give the lender a healthy return. Paying them off early incurs a sizeable early repayment charge, in this case £15 million. Paying off your credit card early does not involve these charges.

originally posted by gurucube
I will give odds of 25/1 that NSL will not be sold off by 2015. any takers, show me the money.pm me. i accept paypal.

Technically it was the £30 Million short term loan from the Treasury that actually stopped NATS going bust. It was the composite solution that got NATS back from the brink to a more stable financial footing. There were a number of elements in that composite solution all of which were required for it to work. One of those elements was £120 Million of savings within NATS of which the pension holiday formed a part. I'm not quite sure of the distinction between improving cash flow and stopping the company going bust, the two are normally equivalent for a company in the state that NATS was at the time.

Certainly higher but considerably higher ? It may be true but you can't justify that statement on the information in the public domain. As much of the repayment appears to have been financed by additional borrowing in NERL my guess would be about £15 million which was the redemption cost. There is no doubt that NATS expects to make savings as a result of that move because nobody spends £15 million unless they will and of course those savings will reflect in the profit figure in the future. I'm slightly puzzled that you think there is something wrong in that. Remember that the RPI-x formula for the bulk of its income means that NATS has to find savings year on year just to stay in the same place and if it makes those savings with financial manipulation it isn't making them through staff cuts which is the inevitable end game with an RPI-x charging regime.

The Regulator accepts that shareholders are entitled to make a reasonable return on their investment and the charging regime makes allowance for that. It is the Regulator's view that the dividend policy is a matter for the NATS board not the Regulator but there are a number of checks and balances in the system to stop the Board "acting irresponsibly". The Regulator has allowed full pass through of the Capital Investment programme in CP2 and as long as NATS funds that investment programme as agreed and provides the services required in the licence it can use any additional profit to pay dividends if the Board choses to do so. To date the Board has chosen to pay only modest dividends which is in keeping with the stated objectives of the Airline Group.

Nor I, yet management are quite categorical that it wasn't the pension holiday that stopped the company going bust.



I don't, I'm merely pointing out the company is now in a position to make even more profits. I have nothing against the company making profits but we shouldn't be misled over the financial state of the company.


Such as paying off loans early. Increasing their credit rating and therefore reducing interest rates on loans.