Maritime Pensions Campaign May 2023

It has now been well over a year since P&O Ferries bosses ruthlessly sacked over 800 of its own workers and while this union continues to campaign for justice this cut-throat employer is still dodging paying the c£130m in contributions it owes to the Merchant Navy Ratings Pension Fund (MNRPF).

Whilst we understand the Trustees of the MNRPF continue to “negotiate” with P&O, it appears when it comes to doing the right thing and paying up its pension obligations, the Dubai parent company DP World, would rather give more than £15 million in bonuses to P&O Ferries bosses as a pat on the back for sacking hardworking crew workers.

As one of the nominating bodies of the MNRPF, RMT continues to monitor the situation closely in respect of the discussions between the Trustees and P&O Ferries, because the implications of P&O Ferries not paying what they owe go much wider than just ensuring that the contributions are paid into the fund to pay member benefits.

The MNRPF is what is known as “last man standing scheme” which means, in the case of P&O Ferries, if they were to go into administration (insolvency), the other participating employers such as Stena Line and the RFA, as an example, would pick up P&O’s liability to the fund as the debt would be shared out across all participating employers. This could potentially result in a financial strain being placed on some of the smaller participating employees who would also have to pick up P&O Ferries debt.

RMT believe that more pressure is needed to force P&O, and parent company DP World, to make good what they owe. To assist in this

pressure, our representatives believe that, initially, we should be asking all RMT members to consider writing to their local MP demanding that they raise this injustice at the highest level and that regulatory action needs to be taken against P&O so that they are made to pay what they owe to the MNRPF and other pension schemes they owe money to.

P&O and DP World continue to refuse to pay their pension debt to MNRPF members!

A message from the National Secretary, Darren Procter

Furthermore, our representatives believe that P&O Ferries’ routes, still in operation, are under massive financial pressure which could further jeopardise payments to our members pension schemes.

I can advise that at the time of writing (15th May 2023) the RMT have been infomed by the MNRPF Trustees that

an agreement has been struck with P&O Ferries in resepect of the contributions owed. I would advise that while the details of this agreement need to be considered by your National Executive Committee, it is the RMT’s intention to draft a pro-forma letter for members to complete and send to their local MP demanding that P&O Ferries pay in full what they owe

to the MNRPF if we believe that the agreement reached by the Trustees is not fit for purpose. In the meantime, I will of course keep you advised on developments.

Darren Proctor, National Secretary

Public Sector Pension Scheme: McCloud and Sargeant Court Case

Update

As previously reported in the June/July 2022 edition of the Maritime Pensions Campaign Newsletter, in 2015 the UK Government made changes to Public Sector final salary pension schemes, which resulted in the introduction of Career Average Revalued Earnings (CARE) pension arrangements.

Like other Public Sector workers, our members employed by the RFA who contribute to the Principle Civil Service Pension Scheme (CSPS) and Orkney Ferries, who are members of the Local Government Pension Scheme (LGPS), were advised at the time that they would either be allowed to stay in their current final salary arrangement, or they would be moved into the new CARE Pension Scheme. This decision to allow some members to stay in Final Salary was based on an individual’s closeness to retirement.

The Government’s decision to split workers into groups was later found by the Court of Appeal to be discriminatory because it was seen as

describing someone’s closeness to retirement is just another way of describing a person’s age. While the introduction of CARE pension schemes was not seen as unlawful in its entirety, the Court of Appeal ruled that a remedy must be found that is not age discriminatory.

The McCloud Court Case in 2018 ruled that a solution must be fair to all members regardless of age and therefore put in place a solution for each Public Sector Pension Scheme effected by the McCloud:

RFA CSPS Solution

1. The first part of the process was

completed on 1st April 2022 which resulted in all contributing RFA pension scheme members being moved into Alpha.

2. The second part of the process was to correct the discrimination that has taken place between 2015 and 2022. This is known as the “McCloud Remedy”. This in effect means that some RFA pension scheme members, who were contributing to the CSPS between 31st March 2012 and 1st April 2015 will have a choice between two different types of benefits i.e. the legacy final salary CSPS or the reformed Alpha CARE Pension Scheme.

We are advised that, after October 2023, affected members within the scope of the 2015 “McCloud Remedy” will be offered a choice at retirement as to which benefits they would prefer to receive for any service between April 2015 to April 2022. This is not necessary an easy choice because in some cases members benefits may be higher under the Alpha CARE Pension Scheme depending on an individual’s age and salary progressions during the run up to retirement.

However, to assist members the Government Actuary’s Department has set up Retirement Modeller Calculators across the 12 different Public Sector pension schemes to assist members

with their retirement decisions.

One of these Retirement Modeller Calculators has been set up to assist members of the CSPS which will help RFA members understand the pension implications of the McCloud ruling. The CSPS Retirement Modeller Calculator can be accessed by visiting https://retirementmodeller.civilservic epensionscheme.org.uk/remedy

Click here for the CSPS Retirement Modeller Calculator

The retirement calculator aims to help scheme members eligible for the ‘McCloud Remedy’ to make an ‘informed decision’ on which scheme is better for them.

In addition to this, the calculator will allow members to compare these benefits using different retirement options, such as early or late retirement, or exchanging pension for a cash lump sum etc.

Therefore, if you were a member of the CSPS between 31st March 2012 and 1st April 2015 you are likely to be affected by the McCloud ruling and should visit the CSPS Retirement Modeller website for more information.

Orkney Ferries LGPS Solution

Unlike the CSPS there will be no Retirement Modeller for LGPS members to assist with their options. It would appear that the Government’s reasoning is due to cost of putting in place a modeller, but we are advised that members of the LGPS will receive written communication which will give then detailed illustrations in respect of their options as early or late retirement, or exchanging pension for a cash lump sum etc.

If you were a member of the LGPS between 31st March 2012 and 1st April 2015 then you are also likely to be affected by the McCloud ruling and should visit the LGPS website for more information.

https://www.lgpsmember.org/helpand-support/frequently-askedquestio ns/?faq-type=mccloud-court-case

We will keep you updated on developments.

Focus on Maritime Pensions Newsletter May/July 2023

Legislation

You may have heard, as part of the Spring Budget, the Chancellor announced changes to the Pension Lifetime and Annual Allowances. To the vast majority of working people these allowances will mean very little, simply because most workers are unlikely to contribute or build up a big enough pension entitlement to breach these allowances, or at least not the Lifetime Allowance. So, what are these allowances and what are the changes being made?

Lifetime Allowance

The lifetime allowance is the total amount you can build up in all your pension savings throughout your working life without incurring a tax charge. The current lifetime allowance is £1,073,100 and anything above this amount will result in an individual paying additional tax at retirement.

At certain times your pension provider/ administrator will check to see if the value of your pension benefits is over the lifetime allowance.

What’s happened? The Chancellor announced in March 2023 that the lifetime allowance would be scrapped in April 2024 so that individuals can build up as much pension as they like without facing a tax surcharge.

Annual Allowance

The annual allowance is the most you can save in your pension pot in a tax year (6 April to 5 April) before you have to pay tax. The annual allowance has changed several times since it was introduced in 2006 and was £40,000 up until 5th April 2023.

Depending on the type of pension arrangement you are contributing to will determine how your allowance is calculated:

1. For Defined Contribution Pension Schemes the calculation is the total contributions paid in any pension input period (year) which includes all individual and employer contributions

2. For Defined Benefit Pension Schemes the calculation is based on the level of benefits built up (accrued) in an input period (year) and not contributions. The calculation is generic across all schemes and can be requested from your scheme administrator.

While there may be an argument that the increase in the Annual Allowance from £40k to £60k would be welcomed by some members of Defined Benefit pension schemes, where you are more likely to build up a greater level of pension in an input period, the fact remains that the proposed removal of the Lifetime Allowance will only really benefit the wealthy and will do absolutely nothing to assist the poorest in our society.

We are advised that the average worker would have to save for 400 years to benefit from the scrapping of the Lifetime Allowance which creates further inequality!

It is proposed by the Labour Party that if they were to get into power they will reverse the decision to scrap the Lifetime Allowance. This we will have to wait and see.

Life Assurance Cover UPDATE

As previously reported, having life cover is one of the key components of being a member of a pension scheme and, while some employers may offer Death in Service benefits as part of your normal contract of employment, our research has shown that your family is better protected if you are a member of your employer’s occupational pension scheme because the cover you will receive is genuinely higher.

RMT is committed to improving pensions, but also other connected benefits such as life cover. As part of this strategy, please be advised that our representatives have successfully managed to negotiate, through pay negotiations, a vast improvement to life assurance cover offered to members employed by shipping employer DFDS.

We can report that the DFDS has offered a life cover arrangement which will offer Death in Service protection of three times annual salary for accidental death or death through natural causes, which occurs on or off a vessel whilst in permanent employment with the company.

Following a referendum our members have voted to accept this enhancement as part of pay discussions. This improvement in life cover will benefit all Deck, Engine, and OBS ratings employed permanently by DFDS Guernsey.

We would advise that our representatives are currently in discussions with Stena Line for both seafarers and port workers where the employer currently has life cover in

place where members of Smart Pensions, formally the Ensign Retirement Plan, dependents would receive two times annual salary death in service cover as well as a pension of 25% of annual salary paid for life to a dependent. Following discussions with the employer, it is clear that many members, and indeed shoreside management, are unclear on the details of this arrangement, so we will be working with the employer to improve communications in respect of this issue and indeed the level of life cover offered across this employer as there appears to be some disparity across Stena Line employees.

Another example of where ratings were unaware of the type of life cover offered to them was at shipping company James Fishers. We were advised that employees were covered for three times their basic salary in the event of their death but unknown to ratings or management was that this

cover only insured them if the worse was to happen on board a vessel. Cleary such cover is inadequate, but following positive negotiations between RMT representatives and management, we have been able to secure an improvement in that life cover protects ratings and their families whether they are on board a vessel or at home.

In the meantime, we would remind all members to carry out the basic checks to ensure they are receiving life cover so that their families and loved ones are protected in the event of your death.

It is important to note that life cover policies are not paid through pension contributions. Such policies are separate from your occupational pension arrangement and are paid for by the employer although membership of the pension scheme is a condition of receiving life cover.

Life Assurance Checklist

n3 CHECK whether you are receiving life cover with your employer and that you are receiving the highest level of cover

n3 CHECK that your have completed an expression of wish form so that any death in service payment is paid to the correct person

n3 CHECK that your expression of wish form is up to date

Calling all Pensioners... Join the National Pensioners Convention!

The NPC’s main objective is to promote the welfare and interests of all pensioners, as a way of securing dignity, respect and financial security in retirement. The NPC organises rallies and lobbies of MPs and makes submissions to government on policies affecting older people. The Convention also stages an annual three-day Annual Convention, previously in Blackpool, now in Southport, where up to 1000 representatives discuss issues of concern and share ideas in an atmosphere of genuine friendship.

In its relatively short history the NPC, through its campaigning they have achieved some significant benefits for older people:

n Restoration of the link with earnings – 30 years after the Thatcher government took it away

n Introduction of the free concessionary bus pass from the Labour government when John Prescott was Transport Minister

The NPC state that the real strength of the organisation comes from the work that their many affiliated groups, who are active in their local areas and regions promoting the NPC’s campaigns. This makes the NPC unique, as the only national campaign group in the country which is run by pensioners for pensioners.

RMT has close links with the NPC and Branches can affiliate to the NPC.

We would encourage you become involved with the Convention either as a member or as a “friend of NPC”.

For more information, please go to https://www.npcuk.org/ or contact RMT Pension Officer, Paul Norris, on 020 7529 8806 or at p.norris@rmt.org.uk

n Introduction of the winter fuel allowance when Gordon Brown was Chancellor

At a time of a cost-of-living crisis it has never been more important for the working class to campaign for justice and fairness, whether this is for an improved Basic State Pension, fighting to protect our NHS or improvements in social care. One such organisation that campaigns on all these fronts on behalf of pensioners is the National Pensioners Convention (NPC) which RMT, as well as many other Trade Unions, affiliate to.

As you will recall from the January/March 2023 Maritimes Campaign Newsletter, as a result of the acquisition of the Ensign Retirement Plan (ERP) by Smart Pension, members of the ERP were automatically moved across to Smart Pension on 1st April 2023. While ERP shipping industry employers had the option not to move to Smart Pension prior to the takeover, we are advised that the majority of employers have successfully moved across.

It would appear that moving to Smart Pension is in the best of interest of all employers and members due to a number of reasons, which include:

n Lower charges for the members

n Greater investment choice with a range of ESG funds

n Improved communications

n Better member technology so that members can view their pension whenever they want

As a reminder, Smart Pension is a Master Trust Defined Contribution occupational pension arrangement which has assets under management of over £5 billion, over 1 million members and has more than 90,000 businesses now managing their employees’ retirement savings.

We are pleased to advise that Smart Pension are keen to work with RMT to develop greater understanding of the Maritime industry and to engage with our members who contribute to Smart Pension. Like RMT they want members of this occupational pension schemes to have a greater understanding of their deferred wages so that they can save for retirement, make the right decisions leading up to their retirement and enjoy their retirement.

Darren Procter, our National Secretary,

and Paul Norris, RMT Pension Officer, met with representatives from Smart Pension on 19th April 2023 to discuss how RMT and Smart Pension can work together for the benefit of union members. We are pleased to advise that the meeting was both informative and productive.

While the relationship between RMT and Smart Pension is in its infancy, we believe that it’s important that, as a union, we engage and build a relationship with not only Smart Pension but all of our members pension providers as this can only benefit our members in the long term.

If you would like to arrange a meeting with a representative from Smart Pension please call 0330 124 7409.

In partnership with RMT, Smart Pension have provided us with campaign material which we believe will be informative and educational for members. This material can be viewed at https://bit.ly/41MnVGK

Picture: Paul Norris, Adam Tudor (Smart Pension), Darren Procter, and Andrew Sheavyn (Smart Pension)

Education Corner

Understanding how you can invest in a

Defined Contribution (DC) workplace pension scheme

In a workplace/occupational DC pension scheme, you build up a pension pot which is intended to pay you a retirement income based on how much you and/or your employer contribute and how much this grows. Simply the more money that goes into your DC pension pot the greater chance you have of securing a reasonable income at retirement.

While there is no promise that at the end of your working life you will have built up a sufficient amount of money, it is important that during the run up to your retirement your money is invested wisely and that the investments are fit for purpose.

Your money will usually be invested in one fund or a number of funds. A fund is a way to invest money. Depending on what type of fund it is, your money could be invested in property, shares (equities) in companies, bonds, or a mixture of different types of investments.

When you join a workplace pension your money will usually be automatically invested in a fund for you. This is sometimes called the ‘default’ fund and will have been chosen by the pension scheme who have investment advisors who set the default fund to meet the investment needs of most of the members.

The majority of members tend to stick with the default fund for many

Pension Regulator Toolkit

Click here for the toolkit

reasons but often it purely because they want to leave investment decisions to the experts… so to speak!

If you’re happy with this fund, you don’t need to do anything more. Often the funds are ‘lifestyle’ or ‘target date’ fund. Both are intended to take a higher risk the further you are from retirement and as you approach retirement your pension pot is de-risked into safer investments such as bonds or cash.

Most workplace pensions will also offer you the option of choosing a different fund if you prefer. These are sometime known as ‘self-select funds’. Self-select funds tend to offer higher investment growth, but these might be riskier, meaning your pension pot could rise and fall in value more often.

Self-select may also offer ethical or socially responsible fund that appeals to you. They may also offer Sharia-compliant funds which invest in accordance with Islamic law, for example avoiding companies involved in gambling or alcohol.

Even if you decide to stay in the fund chosen for you by the pension scheme for now, you can usually change your mind later. You can then change to a different fund or spread your money across a number of funds throughout the time you’re building up your pension pot.

Annual Management Charge (AMC)

Whether your money is invested in a default or self-select fund, these investments will be periodically reviewed by investment specialists to ensure that you are getting the most from your investment for which you will be charged.

1. If you are in a default fund you will be charged no more than 0.75%pa as there is a restriction on the most you can be charged if you invest in this way. The administration charge for running your pension is included in the 0.75%.

2. If you are investing in self-select funds, then you will generally pay a little higher than 0.75%pa as these funds will take more to administer and potentially more expert investment advice.

Of course, there is no guarantee that self-select funds will outperform default funds but by having choice this gives members the opportunity to invest how they want to whether that be for ethical reasons or just to take more investment risk.

If you are unsure how your money is invested, or you want to take control of your own investments, you should contact your employer or the provider of the pension scheme.

If you have an interest in learning more about pensions or just want to sharpen up your knowledge why not sign up for the Pension Regulators Toolkit. The Toolkit is a free online learning program from The Pensions Regulator and while it is aimed at trustees of occupational pension schemes anyone can sign up.

The Trustee toolkit includes a series of online learning modules and downloadable resources developed to assist in learning more about occupational pension schemes. It doesn’t matter whether you are in a Defined Contribution or a Defined Benefit pension arrangement, the Toolkit is a great way to build up your pension knowledge and, just as importantly, you can learn in your own time.

For more information, please visit https://www.thepensionsregulator.gov.uk/en/trustees/ understanding-your-role/trustee-toolkit/

RMT Maritime Pension Champions STILL needed!

Do you have an interest in pensions? If so, we need you!

pension arrangements, and that of your workplace colleagues, whilst having an understanding of where they can seek advice if necessary.

As stated in previous Maritime pension updates, we want pensions to be at the forefront of our members’ terms and conditions and the only way this can be achieved is for our representatives to understand the importance of pensions and to understand their workplace pension and their entitlements. While we don’t expect individuals to be complete experts in this often-unnecessary complex subject, we want individuals to be comfortable with their own

Therefore, we want our representatives and/or members to come forward and be our ‘RMT Maritime Pension Champions’

While in its infancy we want RMT Maritime Pension Champions to support our members in the workplace to assist members with their pension questions and, while you would not be able to give financial advice, we want our members to understand their occupational retirement benefit options.

To assist in this role, we intend to hold a three-day pension course later this year at the Bob Crow Education Centre, Doncaster, which will be purely focused on Maritime Pensions. At the end of the course, we would hope that interested members or representatives will have ascertained the basic understanding of what a pension is and what arrangements are available in their workplace. RMT Maritime Pension Champions will receive the full support of the union and assistance when and if required.

If you are interested, please contact RMT Pensions Office Paul Norris on 020 7529 8806 or at p.norris@rmt.org.uk.

Do you need help with a pension problem or understanding your pension?

RMT has recently assisted members with work related and general pension issues which include:

• the understanding of a MNRPF retirement estimate and transfer value

• assisting with a complaint to the Department for Works & Pensions about the level of Basic State Pension being paid to them

• an error made by an administrator of a pension scheme in respect of a members’ recalculated pension.

These are just a few issues RMT can assist members with so please get in contact with us.

If you have a pension problem or just need some pension understanding please get in contact with RMT Pensions Officer, Paul Norris, on 020 7529 8806 or at p.norris@rmt.org.uk

Please be advised that RMT does not give financial advice.

For more information on the Maritime Pensions Campaign and to view past newsletters, please click here: http://bit.ly/3rL8cad

If you have any views comments, or questions about this newsletter please get in touch with us.