RMT Industrial Action - Hull Trains

[Wolfie]

I speculated earlier that part of RMT's issue was likely to be that this was the thin end of the wedge. Strike action is now threatened for the London Underground on pension-related issues.

 

[Starmill]

The salary for the Director of Bus Operations at TfL in 2018 was £145k. Director salaries have largely been frozen since then. That would make it a 40% pay cut for taking on an infinitely more challenging role.

Then again, that might be quite appealing if you were moving from a company you suspected would soon cease to exist into the public sector.

 

[Max]

The industrial action has been called off: https://www.bbc.co.uk/news/uk-england-humber-58114382

A planned strike by staff at Hull Trains on Sunday 8 August has been called off.
The Rail, Maritime and Transport (RMT) union said it would continue to take other forms of industrial action, including a ban on overtime.
The dispute relates to disagreements over pension arrangements for staff at the company.
The RMT said the decision to halt action on Sunday was to allow the union to consider recent developments.

 

[Meerkat]

The industrial action has been called off: https://www.bbc.co.uk/news/uk-england-humber-58114382

Are “recent developments“ discussions with Hull Trains, or realising there was no interest from Hull Trains?

 

[HullRailMan]

Support for the union is crumbling as people realise the unions demands will never be met, and this dispute is being driven by the unions fixed position of final salary schemes or nothing, not the reality of this particular situation.

 

[hello]

In case you hadn’t noticed, the Givernment has borrowed the thick end of £500 billion during the pandemic. That has to be paid back.

They borrowed that from the Bank of England I believe, dont the government own the Bank of England? If so, surely it’s more a case of just making it appear rather than borrowing it!!!!!!

 

[Robertj21a]

They borrowed that from the Bank of England I believe, dont the government own the Bank of England? If so, surely it’s more a case of just making it appear rather than borrowing it!!!!!!

Not sure if you're joking.....

 

[Bletchleyite]

In case you hadn’t noticed, the Givernment has borrowed the thick end of £500 billion during the pandemic. That has to be paid back.

It does and it doesn't. Government borrowing is far more like a share issue than going to the bank and asking for a personal loan. For instance, if you put your money in a National Savings account, you've just lent it to the Government.

They also gained a load of it through quantitative easing, which in essence is just printing money. Normally that causes devaluation, but because pretty much every country in the world was also doing it it didn't really have an effect.

 

[JamesT]

It does and it doesn't. Government borrowing is far more like a share issue than going to the bank and asking for a personal loan. For instance, if you put your money in a National Savings account, you've just lent it to the Government.

They also gained a load of it through quantitative easing, which in essence is just printing money. Normally that causes devaluation, but because pretty much every country in the world was also doing it it didn't really have an effect.

For the debt that's owed to someone other than the BoE, it still requires servicing. Which will be competing the money government spends. There's a double-whammy with this as QE pushes inflation up, (that's part of the object, to avoid deflation,) and some government bonds are index-linked so a rise in inflation means more spending on debt-servicing.

It's very cheap to borrow, but it's not free.

 

[falcon]

l neither have any real knowledge of this dispute nor am l any sort of fan of RMT. However, l do have a certain sympathy with them over this one. I strongly suspect that they fear that something done with respect to pensions in a small financially struggling open access TOC could end up being the thin end of a very big wedge. It could be deemed to set a precedent for what other, much more financially stable, rail industry employers seek to do. Remember that HMG have already talked about wanting pension changes to cut costs going forward.


Indeed.

Doing their own deal to keep drivers on defined benefit scheme. Like they tried in the early 2000's when there was a shortfall across the railway. ASLEF went to all the TOC and said we want a seperate DB scheme for drivers.

Support for the union is crumbling as people realise the unions demands will never be met, and this dispute is being driven by the unions fixed position of final salary schemes or nothing, not the reality of this particular situation.

The staff are not on a final salary scheme. If you are going to cast your opinion at least get the facts right.

 

[Carlisle]

The staff are not on a final salary scheme. If you are going to cast your opinion at least get the facts right.

A quick google search suggests Final Salary & Defined Benefit pension schemes essentially amount to the same thing.

 

[tspaul26]

Not necessarily. A lot of the surviving defined benefit schemes have now switched to a career average basis, not final salary.

 

[Carlisle]

Not necessarily. A lot of the surviving defined benefit schemes have now switched to a career average basis, not final salary.

Ok, thanks for that information

 

[Watershed]

A quick google search suggests Final Salary & Defined Benefit pension schemes essentially amount to the same thing.

For some people, there is a massive difference between the two. Defined benefit merely means that you are guaranteed to receive a certain benefit/amount when you retire.

As far as I'm aware, all accrual of new benefits under RPS is now on the Career Average Revalued Earnings basis, meaning that if you significantly increase your earnings late into your career, you don't see anywhere close to the same benefit as you'd see under a Final Salary scheme.

 

[Goldfish62]

Are “recent developments“ discussions with Hull Trains, or realising there was no interest from Hull Trains?

Or perhaps realising that there might be no Hull Trains?

As far as I'm aware, all accrual of new benefits under RPS is now on the Career Average Revalued Earnings basis, meaning that if you significantly increase your earnings late into your career, you don't see anywhere close to the same benefit as you'd see under a Final Salary scheme.

It depends. When the local government scheme went from final salary to career average a few years go it moved from 60ths to 49ths, meaning that some people actually benefitted, although the sting in the tail was that the normal retirement moved from 60 to state retirement age.

 

[Meerkat]

For some people, there is a massive difference between the two. Defined benefit merely means that you are guaranteed to receive a certain benefit/amount when you retire.

As far as I'm aware, all accrual of new benefits under RPS is now on the Career Average Revalued Earnings basis, meaning that if you significantly increase your earnings late into your career, you don't see anywhere close to the same benefit as you'd see under a Final Salary scheme.

However it still has the huge advantage that at any point you know what pension you will get and can plan accordingly, you don’t run the risk of bad luck around pension age brutalising the value of your pension. And much less stress about how you should invest your pension!

 

[Goldfish62]

However it still has the huge advantage that at any point you know what pension you will get and can plan accordingly, you don’t run the risk of bad luck around pension age brutalising the value of your pension. And much less stress about how you should invest your pension!

Oh absolutely. Final salary pensions are the Gold standard and anyone on them (that includes me) are very lucky in this world of such schemes rapidly disappearing. I know someone who had a good job in the world of finance on a salary I could ever dream of, but their pension pay-out is no better than mine.

 

[jayah]

Steve Montgomery is a director of Hull Trains, thus his salary will be quoted if it is the highest. It would be pretty odd if the MD of Hull Trains got paid more than their boss.

To further put it in context, the former MD of Hull Trains has just moved to TfL to a job that is paid substantially less than £240k. So no, I don't believe the highest quoted salary is that of the MD Hull Trains.

The accounts refer to 2018.
Their highest paid Director wasn't on £240k in 2019.

The point you seem to be missing is that £540k pension contributions is no albatross, even to a relatively small company like this spending £30m a year.

The salary for the Director of Bus Operations at TfL in 2018 was £145k. Director salaries have largely been frozen since then. That would make it a 40% pay cut for taking on an infinitely more challenging role.

The TfL pension is rather more generous though - 33% employer contributions.

Oh absolutely. Final salary pensions are the Gold standard and anyone on them (that includes me) are very lucky in this world of such schemes rapidly disappearing. I know someone who had a good job in the world of finance on a salary I could ever dream of, but their pension pay-out is no better than mine.

Defined benefit aren't all gold standard.
TfL is 5% employee, 33% employer contribution.

On the other hand a career average scheme, 20% total contributions, with a fair split of payments should be the norm and is a perfectly affordable payroll cost for a viable business.

Nobody is retiring for 20 years on the national average 3% contribution.

Fantasy economics followed by the ballooning cost of state pensions.

 

[jayah]

There are many other defined benefit types e.g. career average earnings where you cannot game the system by working overtime in the final 18 months to inflate your pension for 20+ years.

 

[Goldfish62]

The TfL pension is rather more generous though - 33% employer contributions.

Indeed it is, and I'm in it.

 

[philthetube]

There are many other defined benefit types e.g. career average earnings where you cannot game the system by working overtime in the final 18 months to inflate your pension for 20+ years.

overtime is not pensionable in many schemes, including tfl

 

[flitwickbeds]

Oh absolutely. Final salary pensions are the Gold standard and anyone on them (that includes me) are very lucky in this world of such schemes rapidly disappearing. I know someone who had a good job in the world of finance on a salary I could ever dream of, but their pension pay-out is no better than mine.

Indeed it is, and I'm in it.

And I hope neither of you are the type of people to call younger people just entering the world of work "snowflakes" or the like for demanding good working conditions!

 

[Goldfish62]

And I hope neither of you are the type of people to call younger people just entering the world of work "snowflakes" or the like for demanding good working conditions!

Well, for one thing I am one person, not two, and on your second point what on earth are you smoking?

 

[flitwickbeds]

Well, for one thing I am one person, not two, and on your second point what on earth are you smoking?

Sorry, didn't realise I was quoting the same person across 2 different posts!

I'm sure this doesn't apply to you but you must be aware that there is a section of society who, at the merest sign of young people wanting to have good working conditions, call them slackers, snowflakes, millennials, and a whole host of other derogatory terms. In my experience the people saying those things have a gold plated pension, protected employment contracts, a mortgage for a large house they paid off in their 50s, guaranteed retirement rights, etc - all things that an 18 year old in 2021 will only be able to dream of.

 

[Goldfish62]

Sorry, didn't realise I was quoting the same person across 2 different posts!

I'm sure this doesn't apply to you but you must be aware that there is a section of society who, at the merest sign of young people wanting to have good working conditions, call them slackers, snowflakes, millennials, and a whole host of other derogatory terms. In my experience the people saying those things have a gold plated pension, protected employment contracts, a mortgage for a large house they paid off in their 50s, guaranteed retirement rights, etc - all things that an 18 year old in 2021 will only be able to dream of.

Just because I have a gold-plated pension and, yes, have paid off my pension doesn't make me like that.

 

[falcon]

A quick google search suggests Final Salary & Defined Benefit pension schemes essentially amount to the same thing.

No they arn't at all. They are two entirely different things.

A final salary scheme means that the final salary that the person is receiving on retierment is used to calculate the pension payments. There are virtually none in exstance now because of the way the financial service industry changed in the 1980's.

All Railway pensions are careeer average earnigs pensions. That means a person recieves a pension based on the contributions made into the scheme regardless of whatever the final salary is.

A defined benefit scheme is simply a scheme that has a 'defined' benefit (a guaranteed amount on retierment). A defined 'contribution' scheme gaurantees how much you will pay NOT what you will recieve.

Hull Trains are trying to move staff from their career average earnings 'defined benefit' scheme onto an industry wide defined 'contribution' scheme.

It is nothing to do with final salary scheme at all.

Final salary schemes are almost impossible to fund now and are plain and simply recognised as inequitable.

The term final sallary is missused all the time.

Take this for instance,link below( badly written internet info) it is supposed to be accurate, but in fact it is written incorrectly and does not explain properly at all the difference between final salary and defined benefit.

Final Salary Pensions - Pension Works

Final Salary Pensions are becoming more complex over time. Learn more about Final Salary Pensions and your options with your pension!

www.pensionworks.co.uk

The term final salary is missused. Final salary means one thing only, the pension received is based on the salary being recevied at the time of retirement.

Look at paragraph two no.2 and it says. a Finaly salary scheme is....

Quote: known as ‘career average’ schemes. Career average schemes are based on your average salary throughout your career with the company.End Quote.

That sentence is correct. But a career average earnings scheme has nothing at all to do with final salary. To describe it as a final salary scheme is incorrect.

 

[jayah]

overtime is not pensionable in many schemes, including tfl

There are plenty of other opportunities. Final salary are said elsewhere to be inequitable and I would agree as the level of contributions and entitlement are not closely tied - especially considering most of the appreciation comes from compounding i.e early years salary not the final salary.

 

[Wolfie]

No they arn't at all. They are two entirely different things.

A final salary scheme means that the final salary that the person is receiving on retierment is used to calculate the pension payments. There are virtually none in exstance now because of the way the financial service industry changed in the 1980's.

All Railway pensions are careeer average earnigs pensions. That means a person recieves a pension based on the contributions made into the scheme regardless of whatever the final salary is.

A defined benefit scheme is simply a scheme that has a 'defined' benefit (a guaranteed amount on retierment). A defined 'contribution' scheme gaurantees how much you will pay NOT what you will recieve.

Hull Trains are trying to move staff from their career average earnings 'defined benefit' scheme onto an industry wide defined 'contribution' scheme.

It is nothing to do with final salary scheme at all.

Final salary schemes are almost impossible to fund now and are plain and simply recognised as inequitable.

The term final sallary is missused all the time.

Take this for instance,link below( badly written internet info) it is supposed to be accurate, but in fact it is written incorrectly and does not explain properly at all the difference between final salary and defined benefit.

Final Salary Pensions - Pension Works

Final Salary Pensions are becoming more complex over time. Learn more about Final Salary Pensions and your options with your pension!

www.pensionworks.co.uk

The term final salary is missused. Final salary means one thing only, the pension received is based on the salary being recevied at the time of retirement.

Look at paragraph two no.2 and it says. a Finaly salary scheme is....

Quote: known as ‘career average’ schemes. Career average schemes are based on your average salary throughout your career with the company.End Quote.

That sentence is correct. But a career average earnings scheme has nothing at all to do with final salary. To describe it as a final salary scheme is incorrect.

A useful post. One slight correction that l would make is that final salary pensions were actually often based on the highest paid six month period in your final three years of employment or similar. The number of people getting temporary promotions.....

 

[Goldfish62]

A useful post. One slight correction that l would make is that final salary pensions were actually often based on the highest paid six month period in your final three years of employment or similar. The number of people getting temporary promotions.....

Similarly, with the TfL scheme it's your average salary over your last 12 months of service.

 

[AntoniC]

Long time Civil Servant here .
I had my pension scheme changed by my employer in 2005 , from a final salary scheme to a career average scheme.
The reason for the change was that under the final salary scheme I had paid NO contributions to my pension (Classic Scheme_ over the previous 26 1/2 years and it would cost the Government a fortune in unfunded pension schemes.
They brought in a new Pension Scheme called Alpha which means I have to contribute to my pension of 4.6% of my gross salary - my union PCS objected to this - I saw this as fair because I have had 26 1/2 years not contributing.
Following the McCloud Judgment the 6 years I have paid into the Alpha Scheme I have a choice of keeping it in Alpha (which is a better scheme as it accrues at 1/60th instead of 1/80th in the Classic).
Just because your Union objects to the change doesn`t mean the change is wrong.