Latest news with #CareerAverageRevaluedEarnings
Telegraph
04-03-2025
- Business
- Telegraph
Tube drivers to keep gold-plated pensions after Sadiq Khan bows to unions
Tube drivers will still be able to retire at 60 on their gold-plated pensions after Sadiq Khan bowed to union pressure by scrapping a planned overhaul of the scheme. Rail workers took six days of strike action in 2022 and 2023, in part due to changes being proposed to their lucrative pension deals which could have seen them working for five years longer. But the rail union, RMT, confirmed this week no changes would be made to the scheme in what it described as a 'huge victory' over Transport for London (TfL). An underground driver who has worked for TfL for 40 years can expect a pension income of nearly £50,000. But in 2020, a review into the pension fund was launched by the Mayor of London with an aim to save £100m a year. Discussions included moving rail workers on to less generous plans similar to those offered to MPs and NHS workers. TfL also considered increasing their retirement age from 60 to 65. Mick Lynch, the general secretary of RMT, said: 'This is a huge victory for our members who showed tremendous tenacity to stand together to defend their pensions. 'We were told these cuts were inevitable, but our members' determination has ensured that these attacks on pensions have been thwarted.' He added: 'This win proves that when workers are organised and willing to take strike action, they can defeat even the most determined attacks on their rights and living standards. 'RMT will continue to stand ready to take action to protect our members if any such attacks on pensions or terms and conditions come to pass in the future.' The TfL fund, which has 85,439 members, is a generous final salary pension scheme, offering a 60th of a tube driver's salary for every year of service. For a tube driver who works at TfL for 40 years, this would be equivalent to two thirds of their final salary – or £46,788, if they retire on the current salary of £70,182. TfL pays contributions of 10.5pc of salary for new starters – with employees contributing 5pc. The transport body pays 11.67pc for existing staff. The fund had a surplus of £3bn at its latest valuation in March 2024, with auditors estimating that it had a funding level of 125pc. A 2022 review, chaired by Sir Brendan Barber, a former trade union official, found that TfL could save up to £154.4m a year by switching to a Career Average Revalued Earnings (Care) scheme. Other public sector schemes, including that for MPs and NHS workers, have switched to Care in the last decade. Another consideration was to put tube drivers on the Local Government Pension Scheme offered to council staff. In 2023, the unions agreed with TfL that no changes would be made until September 2026, but last month it was confirmed that the pension review team had been totally disbanded. Tom Selby, of pension provider AJ Bell, said: 'The pensions enjoyed by tube drivers are incredibly generous final salary arrangements – the sort that most private sector workers could only dream of. 'The fact these are going to be maintained, including the retirement age of 60, will be seen as a huge victory for employees and Mick Lynch, the RMT trade union's firebrand boss. 'It may also be a reflection of the improved funding position defined benefit schemes have enjoyed in recent years, in large part as a result of shifts in gilt yields which have reduced the accounting value of liabilities.' Pensions can be taken at 60 with no reduction, annual payments will be linked to the retail prices index, rather than consumer prices index and TfL will be on the hook for any future deficits. The victory comes days after Aslef called off some planned strikes on London's Elizabeth line after rejecting a pay deal of £76,000. Almost 500 drivers had been set to walk out during March. A spokesman for Transport for London said: 'As part of our funding agreements with the last government, we were required to carry out a review of the TfL Pension Fund. Extensive work was carried out and we have always held the position that 'do nothing' remained an option throughout the process. 'No requirement on pensions featured in our most recent capital funding agreement with the new Government and our view is that the original condition has now been met. There are no plans being developed or actively considered by TfL to change the TfL Pension Fund.'
Yahoo
04-03-2025
- Business
- Yahoo
Tube drivers to keep gold-plated pensions after Sadiq Khan bows to unions
Tube drivers will still be able to retire at 60 on their gold-plated pensions after Sadiq Khan bowed to union pressure by scrapping a planned overhaul of the scheme. Rail workers took six days of strike action in 2022 and 2023, in part due to changes being proposed to their lucrative pension deals which could have seen them working for five years longer. But the rail union, RMT, confirmed this week no changes would be made to the scheme in what it described as a 'huge victory' over Transport for London (TfL). An underground driver who has worked for TfL for 40 years can expect a pension income of nearly £50,000. But in 2020, a review into the pension fund was launched by the Mayor of London with an aim to save £100m a year. Discussions included moving rail workers on to less generous plans similar to those offered to MPs and NHS workers. TfL also considered increasing their retirement age from 60 to 65. Mick Lynch, the general secretary of RMT, said: 'This is a huge victory for our members who showed tremendous tenacity to stand together to defend their pensions. 'We were told these cuts were inevitable, but our members' determination has ensured that these attacks on pensions have been thwarted.' He added: 'This win proves that when workers are organised and willing to take strike action, they can defeat even the most determined attacks on their rights and living standards. 'RMT will continue to stand ready to take action to protect our members if any such attacks on pensions or terms and conditions come to pass in the future.' The TfL fund, which has 85,439 members, is a generous final salary pension scheme, offering a 60th of a tube driver's salary for every year of service. For a tube driver who works at TfL for 40 years, this would be equivalent to two thirds of their final salary – or £46,788, if they retire on the current salary of £70,182. TfL pays contributions of 10.5pc of salary for new starters – with employees contributing 5pc. The transport body pays 11.67pc for existing staff. The fund had a surplus of £3bn at its latest valuation in March 2024, with auditors estimating that it had a funding level of 125pc. A 2022 review, chaired by Sir Brendan Barber, a former trade union official, found that TfL could save up to £154.4m a year by switching to a Career Average Revalued Earnings (Care) scheme. Other public sector schemes, including that for MPs and NHS workers, have switched to Care in the last decade. Another consideration was to put tube drivers on the Local Government Pension Scheme offered to council staff. In 2023, the unions agreed with TfL that no changes would be made until September 2026, but last month it was confirmed that the pension review team had been totally disbanded. Tom Selby, of pension provider AJ Bell, said: 'The pensions enjoyed by tube drivers are incredibly generous final salary arrangements – the sort that most private sector workers could only dream of. 'The fact these are going to be maintained, including the retirement age of 60, will be seen as a huge victory for employees and Mick Lynch, the RMT trade union's firebrand boss. 'It may also be a reflection of the improved funding position defined benefit schemes have enjoyed in recent years, in large part as a result of shifts in gilt yields which have reduced the accounting value of liabilities.' Pensions can be taken at 60 with no reduction, annual payments will be linked to the retail prices index, rather than consumer prices index and TfL will be on the hook for any future deficits. The victory comes days after Aslef called off some planned strikes on London's Elizabeth line after rejecting a pay deal of £76,000. Almost 500 drivers had been set to walk out during March. A spokesman for Transport for London said: 'As part of our funding agreements with the last government, we were required to carry out a review of the TfL Pension Fund. Extensive work was carried out and we have always held the position that 'do nothing' remained an option throughout the process. 'No requirement on pensions featured in our most recent capital funding agreement with the new Government and our view is that the original condition has now been met. There are no plans being developed or actively considered by TfL to change the TfL Pension Fund.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
