A message from the National Secretary, Darren Procter
It can not be right that unscrupulous employers like P&O Ferries and Irish Ferries are allowed to use non-UK workers to undercut UK Ratings by paying below minimum wage and avoiding the pension automatic enrolment obligations. Our principles when it comes to pensions are simple, nobody regardless of nationality should be used by an employer to avoid having to pay pension contributions, this strikes at the very heart of auto enrolment and is articulated in the following statement:
“…in broad terms, we (the UK Government) are proposing that the Pensions Act 2008 provisions should apply to seafarers and offshore workers in the same way that they
It can not be right that unscrupulous employers are allowed to use nonUK workers to undercut UK Ratings
Welcome to the latest addition of the Maritime Pensions Campaign newsletter. With the recent election of a new Labour Government, RMT has been pushing home it’s campaign for greater protection for UK seafarers and, within this campaign, pension equality for all Ratings.
should apply to land-based workers. With this approach the location of the employer would not be a key determining factor in deciding whether an individual is ordinary working in GB, nor would their nationality or place of residence, or indeed country of registration of the ship.” Steve Webb MP, former Minister for Pensions, 2011.
While auto enrolment has given millions of workers the opportunity to save for their retirement, we believe that pension legislation needs to be improved when it comes to enforcement in the Maritime industry.
RMT has raised seafarers pensions
within the Maritime Labour Convention Tripartite forum and we recently met with the Department for Transport (DfT) to discuss pension issues within the maritime sector, including the issues raised above. As such, we have proposed that pensions form part of a mandatory Seafarers Charter which is included in legislation and would include clear guidelines when it come
Focus on Maritime Pensions Newsletter
to pensions. We believe that such legislation would only work if government departments, such as the DfT and the Department for Works and Pensions, are aligned when it comes to such matters.
I can advise that RMT has also written to Emma Reynolds MP, Minister for
Pensions, outlining the many breaches of legislation which have been carried out by some shipping employers and agencies which demonstrate while we need the Maritime Charter to include pensions protection. We have requested a meeting with the Minister to discuss our demands.
Our Ref: MRP 23/1
Emma Reynolds MP
Parliamentary Secretary and Parliamentary
Under-Secretary of State (Minister for Pensions)
House of Commons
London SW1A 0AA
Emma Reynolds MP Parliamentary Secretary and Parliamentary Under-Secretary of State (Minister for Pensions) House of Commons
London SW1A 0AA
Dear Emma,
Dear Emma,
Pension Provision for Seafarers
Pension Provision for Seafarers
I write to you to bring to your attention some of the inadequacies of the current UK pension system when it comes to ensuring that all workers are automatically enrolled into a qualifying occupational pension scheme, or they can request membership of such a scheme from day one of their employment.
I write to you to bring to your attention some of the inadequacies of the current UK pension system when it comes to ensuring that all workers are automatically enrolled into a qualifying occupational pension scheme, or they can request membership of such a scheme from day one of their employment.
The RMT has evidence that some employers and crewing agencies in Maritime/Shipping Sector are flagrantly breaching their Automatic Enrolment obligation contained with the Pensions Act 2008. This is despite assurances the RMT received from former Minister for Pensions, Steve Webb MP, in 2011 who stated that:
The RMT has evidence that some employers and crewing agencies in Maritime/Shipping Sector are flagrantly breaching their Automatic Enrolment obligation contained with the Pensions Act 2008. This is despite assurances the RMT received from former Minister for Pensions, Steve Webb MP, in 2011 who stated that:
“We have now completed cross-Government work to consider the full implications of extending automatic enrolment to seafarers and offshore workers. I am pleased to be able to inform you that this has concluded that automatic enrolment should be extended to those seafarers and offshore workers who work, or are ordinary working, in Great Britain.
“We have now completed cross-Government work to consider the full implications of extending automatic enrolment to seafarers and offshore workers. I am pleased to be able to inform you that this has concluded that automatic enrolment should be extended to those seafarers and offshore workers who work, or are ordinary working, in Great Britain.
This means that in broad terms, we are proposing that the Pensions Act 2008 provisions should apply to seafarers and offshore workers in the same way that they should apply to land-based workers. With this approach the location of the employer would not be a key determining factor in deciding whether an individual is ordinary working in GB, nor would their nationality or place of residence, or indeed country of registration of the ship.”
This means that in broad terms, we are proposing that the Pensions Act 2008 provisions should apply to seafarers and offshore workers in the same way that they should apply to land-based workers. With this approach the location of the employer would not be a key determining factor in deciding whether an individual is ordinary working in GB, nor would their nationality or place of residence, or indeed country of registration of the ship.”
While many shipping employers are carrying out their duties in respect of auto-enrolment, some are not. As an example:
I would hope by beginning of 2025 I will be able to update you on developments.
Darren Procter, National Secretary
• Workers in the offshore energy sector who are also employed on Voyage Contracts have no opportunity to join a pension scheme despite meeting the qualifying criteria to be automatically enrolled into a workplace pension scheme.
• Employees who do not reside in the UK cannot join the workplace pension as per the rules of that scheme.
• Workers in the offshore energy sector who are also employed on Voyage Contracts have no opportunity to join a pension scheme despite meeting the qualifying criteria to be automatically enrolled into a workplace pension scheme.
• Employees who do not reside in the UK cannot join the workplace pension as per the rules of that scheme.
• On vessels whereby the crew are employed by different companies or have different contracts of employment there are examples of some crew being auto enrolled whilst those on” voyage contracts” (who have worked solely for that employer on that specific vessel for years) are being refused entry into a workplace pension scheme even though they are working on the same vessel as other workers who are auto enrolled.
• On vessels whereby the crew are employed by different companies or have different contracts of employment there are examples of some crew being auto enrolled whilst those on” voyage contracts” (who have worked solely for that employer on that specific vessel for years) are being refused entry into a workplace pension scheme even though they are working on the same vessel as other workers who are auto enrolled.
• Non-UK workers who are employed on domestic routes are having pension contributions deducted from their salaries but are not members of an occupational scheme.
• Non-UK workers who are employed on domestic routes are having pension contributions deducted from their salaries but are not members of an occupational scheme.
• Employees are “laid off” just short of three months so the employer or agency does not have to automatically enrol them into a workplace pension scheme.
• Employees are “laid off” just short of three months so the employer or agency does not have to automatically enrol them into a workplace pension scheme.
• Many crewing agents cannot provide evidence of an auto enrolment scheme being in place allowing seafarers to join that scheme, particularly within the offshore energy sector.
• Many crewing agents cannot provide evidence of an auto enrolment scheme being in place allowing seafarers to join that scheme, particularly within the offshore energy sector.
The use of non-UK workers by some shipping companies and employment agencies is no more than a way to undercut wages and conditions while at the same time exploiting these workers. We need to make it clear we are not suggesting that these workers should not be employed but they should not be used so that employers can avoid their obligations to UK employment law whether that be pensions or other conditions such as wages.
The use of non-UK workers by some shipping companies and employment agencies is no more than a way to undercut wages and conditions while at the same time exploiting these workers. We need to make it clear we are not suggesting that these workers should not be employed but they should not be used so that employers can avoid their obligations to UK employment law whether that be pensions or other conditions such as wages.
The RMT believe that there is a pension crisis in the Shipping and Offshore Sector which has been verified by a recent report commissioned by the RFA and carried out by Faststream.
The RMT believe that there is a pension crisis in the Shipping and Offshore Sector which has been verified by a recent report commissioned by the RFA and carried out by Faststream.
The report identifies the following from research carried out across 4 sectors of shipping.
• Cruise (21 employers)
• Ferries (16 employers)
The report identifies the following from research carried out across 4 sectors of shipping.
• Cruise (21 employers)
• Deep sea (11 employers)
• Workboat/offshore (30 employers)
• Ferries (16 employers)
• Deep sea (11 employers)
The statistics support the RMT’s concerns:
• Workboat/offshore (30 employers)
• In 48% of cases seafarers were receiving no pensions at all.
The statistics support the RMT’s concerns:
• Pensions were most prevalent in the workboat/offshore sector where 64% were receiving contributions.
• P&O Ferries operating two UK to UK vessels, the European Highlander and European Causeway, have no automatic enrolment pension provision in place despite employees on these vessels being qualifying workers.
While many shipping employers are carrying out their duties in respect of auto-enrolment, some are not. As an example:
• In 48% of cases seafarers were receiving no pensions at all.
• Across all sectors in the data set, only 4% were receiving employer contributions to their pensions above 10%.
• Pensions were most prevalent in the workboat/offshore sector where 64% were receiving contributions.
• Within the ferry sector specifically, 32 responses identified no pension contributions, whilst 40 were in receipt of pension contributions.
• Ferry operators working domestically around UK, as an example Cairnryan to Belfast (P&O), are employing seafarers on Voyage (fixed term) Contracts. Many of these seafarers have been working for the same operator for years but are not auto enrolled into a workplace pension scheme despite them working up to 17 weeks at a time.
• P&O Ferries operating two UK to UK vessels, the European Highlander and European Causeway, have no automatic enrolment pension provision in place despite employees on these vessels being qualifying workers.
• Ferry operators working domestically around UK, as an example Cairnryan to Belfast (P&O), are employing seafarers on Voyage (fixed term) Contracts. Many of these seafarers have been working for the same operator for years but are not auto enrolled into a workplace pension scheme despite them working up to 17 weeks at a time.
• Across all sectors in the data set, only 4% were receiving employer contributions to their pensions above 10%.
• The 3 top contribution rates within the ferry sector are 6% (17), 3% (9) and 5% (8).
• Within the ferry sector specifically, 32 responses identified no pension contributions, whilst 40 were in receipt of pension contributions.
• The 3 top contribution rates within the ferry sector are 6% (17), 3% (9) and 5% (8).
Representatives from the RMT have continuously raised this matter at MLC (Maritime Labour Convention) tripartite meetings and wrote top the DfT in July 2024 where the issue of access to pension schemes for seafarers on ferries was raised. What became apparent was that there was a disconnect between Government Departments on matters of concern to the maritime sector i.e. the DfT are not fully aware of what the DWP are doing and vice versa.
The subject of pensions is also a discussion point that RMT has raised with the shipping minister and DFT officials in response to the despicable actions of P&O Ferries and how the UK needs to strengthen the employment rights of seafarers in the UK and close the loopholes that shipping
Representatives from the RMT have continuously raised this matter at MLC (Maritime Labour Convention) tripartite meetings and wrote top the DfT in July 2024 where the issue of access to pension schemes for seafarers on ferries was raised. What became apparent was that there was a disconnect between Government Departments on matters of concern to the maritime sector the DWP are doing and vice versa.
enot fully aware of what the DWP are doing and vice versa.
nt was that there was
ents on matters of concern to the maritime sector
The subject of pensions is also a discussion point that RMT has raised with the shipping minister and DFT officials in response to the despicable actions of P&O Ferries and how the UK needs to strengthen the employment rights of seafarers in the UK and close the loopholes that shipping
companies have exploited for years. We believe this can be done through effective legislation and regulation including a mandatory seafarers charter.
It is of concern that the UK Government seemingly doesn’t have the ability to enforce pension regulations in the Maritime industry despite the commitments given by the previous Minister for Pensions, Steve Webb MP as outlined above because of jurisdictional boundaries which include but are not limited to:
• A seafarer’s nationality (despite working in UK waters)
• The Flag (of convenience) on a vessel
• Location of employer or crewing agency.
Without legislative reform in the Maritime and Shipping sector and enforceable legislation employers / crewing agencies will continue to breach their pension obligations to the detriment of UK seafarers continuing to exploit loopholes.
Considering this letter and the discussions the RMT have been having with the DfT in respect of a Maritime Charter/legislation, we would appreciate a meeting with yourself to discuss our concerns, and how seafarers’ rights in respect of pensions can be improved going forward.
I look forward to hearing from you.
Yours sincerely
Michael Lynch General Secretary
Our Eire Shipping Branch submitted a pensions resolution to this year’s BMIOC. The resolution raised two important issues which can detrimentally affect a scheme members’ Defined Contribution (DC) pension accounts (pots).
The issues which were raised within the resolution were the need for an industry minimum contribution level to allow seafarers to build up a decent pension so that they can retire in dignity and secondly, that both member and employer contributions are paid to the relevant pension provider in good time and within the statutory limit.
The Eire Shipping Branch also demanded that these issues are incorporated into the Maritime Pension Campaign and that ‘progress is seen by our members and used as a recruitment /retention tool as pensions are an important part of Seafarer’s terms and conditions of employment’
So, what do these two demands mean in real terms?
Biennial Maritime Industry Organising Conference (BMIOC) – Pension Resolution
DC Pension Scheme Minimum Contribution Rates
Currently Auto Enrolment pension legislation requires employers to contribute at least 3% of a member’s pensionable earnings into their occupational pension scheme. Members must contribute at least 5% of their pensionable earnings.
Many employers across the Maritime industry only contribute the minimum contribution required under legislation, as do members, but is minimum contribution enough?
Pension provider First Actuarial advise that if a total contribution of 16% per annum was paid into a DC arrangement over a 40-year period, then the individual might expect to get around 50% of their annual salary as a pension income.
So, to give you an idea of what this means in real terms we estimate that:
• If an employee had pensionable pay of £25k pa and was paying minimum contributions of 8% for 30 years they could expect to
build up a DC pension pot of c£78,247. This would provide them with a drawdown pension of £6,435.85 pa.
• However, if the same employee was receiving joint contributions of 16% then after 30 years their pension pot could be worth in the region of £156,495.72 and provide them with a drawdown pension of £12,871.71 pa.
The key to the above is that while members should try to contribute more to their pension, they need help from the employer because not many individuals can afford to contribute the majority of the 16%. Employers simply need to increase their contributions and RMT will continue to campaign for improved pension contributions on behalf of our members within the Maritime sector because, based on the above, who could live on £6,435.85 pa if you have no other source of income?
Late Payment of Pension Contributions
The legislation is clear when it comes to the duty which is placed on
Chris Lawless, Eire Shipping Branch Secretary, speaking at 2024 BGM
employers to ensure that pension contributions are paid on time:
“The law requires that when you deduct contributions from your staff’s pay you must pay these to your staff pension scheme no later than the 22nd day (19th if you pay by cheque) of the next month.”
The Pensions Regulator
The level of pension from a DC arrangement is not only dependent on the level of contributions going into a member’s pension pot but is also dependent on investment exposure. Therefore, if an employer holds on to contributions longer than they need to, or a pension provider fails to invest the contributions in good time, then member’s contributions will miss out on investment income.
If an employer doesn’t pay contributions on time, or not at all, the first course of action should be that a member(s) contacts their employer immediately or ask their RMT representative to take up the matter on their behalf. If an employer fails to correct the delay and reimburse the members’ pension pot due to any lost investment exposure, then a complaint can be made to the Pensions Regulator.
The Pensions Regulator can impose fines on employers and providers if they do not correct any discrepancy.
If members or representatives need assistance, please contact RMT Pensions Officer whose details are at the end of this newsletter.
NEC Decision
I can advise you that your NEC (National Executive Committee) has fully supported all the demands within
Pensions Checklist
n3 If your employer offers more than one Defined Contribution (DC) occupational pension scheme CHECK that you are receiving the highest level of employer contribution.
n3 You should also CHECK that the DC pension scheme’s Annual Management Charge (AMC) is giving you value for money. AMCs vary but generally they will be below 0.75% pa. Even a small percentage can increase or reduce your DC pension pot, so CHECK and if your considering changing arrangement contact the scheme administrator or contact RMT for assistance.
n3 Is your family protected in the event of your death? CHECK that you are receiving highest level of life cover as some
Eire Shipping Branch resolution and we will be working towards ensuring that these demands are met as follows:
• That a minimum joint contribution rate of no less than 16% should be established across the maritime industry in respect of occupational DC pension schemes and that our workplace representatives and officers make this part of their negotiation with Maritime employers
• To ensure that our members’ contributions are paid within the legal time limit, our officers and representatives are instructed to report any breaches of late payment of legislation not just to the employer in question but also the National Secretary for further investigation.
We will keep you advised on developments.
employers will offer more than one level of cover depending on the pension arrangement you are contributing to.
n3 Have you completed an Expression of Wish Form? An Expression of Wish Form is a document which states where who would like any death in service payment paid to. As death in service payments are discretionary the trustees of any pension scheme will need evidence that your wishes are being carried out in the event of your death, so CHECK you have completed a form and CHECK that it’s up to date.
Merchant Navy Ratings Pension Fund (MNRPF)
– 31st MARCH 2023 ACTUARIAL VALUATION
At least every three years under pension law, Defined Benefit pension schemes, like the MNRPF, must have a formal valuation to assess whether there is enough money (assets) to pay members benefits (liabilities). If there is not enough money, then corrective action needs to take place which, in the case of the MNRPF, means participating shipping employers must pay deficit correction payments towards any shortfall in the fund.
The latest MNRPF valuation took place on 31st March 2023, and we asked the Chair of the Trustee Board, Doug Ross, to talk us through the latest valuation.
Doug Ross says: “I am delighted to say that the results of the MNRPF 2023 valuation were very positive, and members of the Fund can rest assured that their benefits are secure. The Trustees have been working hard to improve the Fund’s financial position and have made significant progress”.
We can advise that following extensive engagement with employers, the Trustees have made changes that will reduce the Fund’s deficit. Initially, the valuation proposals indicated a ‘net deficit’ of £110 million from liabilities equalling £1,012 billion. £110 million is the amount needed to cover the gap in funding. This
would have required considerable additional contributions from employers to cover the gap the Trustees aim to achieve by March 2030.
The Trustees have been negotiating with several employers, including P&O Ferries, about offering extra support. These arrangements have now been finalised, and enabled a further reduction in the ‘net deficit’ so as to reach the position of £24 million deficit. These reductions represent a considerable improvement from the original estimates. This all means that members’ benefits continue to be secure with considerable improvements in funding.
We will keep you updated with developments.
Education Corner
How much do you know about the State Pension?
Question 1:
How much is the new full State Pension?
From April 2024, the full new State Pension is around £11,502.40 per year (£221.20 per week).
You earn your State Pension by building up qualifying years on your National Insurance (NI) record.
To qualify for a State Pension, you need at least 10 qualifying years on your NI record. And to get the full new State Pension, you need at least 35 qualifying years.
The State Pension age is currently 66 for someone reaching that age in September 2023, but it’s increasing. As it stands now it’s 68 for anyone born after 6 April 1978.
If you are unsure of your qualifying State Pension Age, please click here to check
Question 2:
Where can you check how much State Pension you will receive?
There are several ways to get a State Pension forecast but the easiest way is to click on the link below. You will need to register for Government Gateway but there is a link for you to do this which is reasonably easy.
Click here to check your State Pension forecast
Question 3: How can you boost your State Pension if you
do
not have the full 35 NI qualifying years?
If your State Pension forecast and NI record shows that you have some missing qualifying years – and you aren’t expecting to build up 35 qualifying years before you reach State Pension age – then you may want to consider boosting your State Pension.
You can do this by buying back missing years through voluntary NI contributions. But there’s a deadline. You only have until 5 April 2025 to make voluntary NI contributions for any missing NI years between 2006 and 2018.
Question 4: How much does a qualifying year cost?
In the 2023/24 tax year, it will cost you £824 to buy back one missing qualifying year. But bear in mind that buying back just one year can add over £300 to your State Pension every year (before tax) once you retire.
However, don’t make any voluntary NI contributions until you’ve spoken to a government helpline and received your personal figures.
The helpline can tell you if you have any missing NI years and exactly how much it will cost you to buy back these missing years. They will also tell you how much your annual State Pension will increase as a result. You can then decide if it’s worth it.
Pension Regulator Toolkit
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.g ov.uk/en/trustees/ understanding-your-role/trusteetoolkit/
Click here for the toolkit
If you’ve not yet reached State Pension age, contact the Future Pension Centre on 0800 731 0175
If you’ve already reached State Pension age or have delayed taking your State Pension, contact the Pension Service on 0900 731 0469.
Public Sector Pension Scheme: McCloud and Sargeant Court Case Update
At the time of writing, the Government’s implementation of the McCloud unlawful age discrimination remedy continues.
As a reminder, 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. Members of these schemes 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.
However, the decision to allow some members to stay in Final Salary pension schemes was based in an individual’s closeness to retirement and was later found by the Court of Appeal to be discriminatory because it was describing someone’s closeness
to retirement as 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 2015 McCloud Remedy legislation came into effect on 1st October 2023. It effects our maritime members employed at the RFA who are members of the Principle Civil Service
Pension Scheme (CSPS) as well as members employed by Orkney Ferries who are members of the Local Government Pension Scheme (LGPS).
As per the requirements of the McCloud Remedy, members who are affected have been placed back into their “Legacy schemes” so that there is no detriment to them. Their Annual Pension Estimates will illustrate these changes.
If you are unsure if you are affected by the McCloud Remedy, please click on the links below.
CALLING ALL Dock Workers, Divers, Offshore Workers and Inland Waterway Workers –we want to hear from you!
Tell us about your workplace pension… does your employer provide understandable information about your occupational pension, if any? Do you need to know more about your potential retirement benefits?
If you have a pension issue, we need to hear from you! Please get in touch with RMT Pensions Officer, Paul Norris at p.norris@rmt.org.uk or on 020 7529 8806. All emails and calls will be treated in confidence.
MNRPF Ill Health Court Case update
As previously reported the MNRPF Ill Health Early Retirement (IHER) Court Case settlement court case concluded in February 2022. It will result in over 8,000 members and dependants receiving additional benefits as a result detrimental changes made to IHER rules in the early 1990’s.
As a reminder members and dependants are split into three categories A, B and C.
Category A/B members are those who retired on an IHER pension on or after November 1989 and before 8 October 1993, and had an IHER pension which was:
• scaled back on retirement; and/or
• was reviewed after it came into payment and as a result was reduced or suspended.
Category C members are those who:
• were in service on 8 October 1993, and had been in service long enough at that time to have qualified for an IHER pension (had new IHER pensions not been stopped on 8 October 1993); and
• left service before Normal Pension Age due to permanent unfitness for sea service at the time they left service.
As at 31 May 2024:
• The value of £29m has been paid out as lump sum payments including arrears. Of this £21m
had been paid to category A/B members
• Pension uplifts of £0.7m pa had been established. Of this £0.6m had been paid to category A/B members
• The average lump sum payment is c. £47k
• The average pension uplift range is in between £8 to £2,880 p.a.
The Trustees continue to try to trace members, former members and family members of deceased members. If you know of anyone who may have been entitled to IHER please email MNRPFemployers@wtwco.com
We will keep you advised for developments.
Do you need help with a pension problem or understanding your pension?
As part of being a member of RMT we have a dedicated Pension Officer who can advise you on most things to do with your retirement benefits and assist you where necessary. In recent months we have assisted members and representatives with matters such as:
• Late payment of contributions
• Incorrect pensionable service
• Understanding State Pension Forecasts
• Delays in pension scheme transfers being made
• Applications for Ill Health Benefits
For more information on the Maritime Pensions Campaign and to view past newsletters, please click here: http://bit.ly/3rL8cad
• Understanding scheme rules in respect of dependant benefits.
These are just a few of the issues RMT deal with on a regular basis, so if you need help 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.
RMT continues to campaign industrially and politically for improvements to Maritime pensions along with pay and terms and conditions of employment. Please encourage any colleagues, not currently member’s of RMT, to join by sharing this QR code with them.
If you have any views comments, or questions about this newsletter please get in touch with us.
