Defined Benefit  

MPs question regulator over Railways pensions

MPs question regulator over Railways pensions

The Work and Pensions select committee is questioning The Pensions Regulator about its engagement with the Railways Pensions Scheme, which is reported to have a deficit of £5-£6bn. 

In a letter sent yesterday (April 15) to Charles Counsell, the chief executive of TPR, chairman of the committee Frank Field requested that the regulator reports on the extent of the final salary scheme’s deficit, and TPR’s actions and future plans to work with firms and the Department for Transport to address this shortfall.

Last week, the Department for Transport disqualified Stagecoach, which owns 49 per cent of Virgin Rail Group, from bidding for three current UK rail franchises, amid concerns it is a "pension risk".

In his letter Mr Field said that the government action "will send a clear message to the industry".

Mr Field said: "While the staggering, parlous state of the Railways Pension Scheme is anything but welcome, the one positive here is the clear signal from government to industry of further, heavy consequences for so badly mismanaging a pension scheme."

However, a substantial deficit in the industry-wide Railways Pensions Scheme remains, which "surely requires an urgent solution," he noted.

In the meantime, the National Union of Rail, Maritime and Transport Workers has warned of co-ordinated action if there is any threat to staff pensions, as a result of mis-managing at company level.

Speaking at a meeting yesterday at the Scottish Trades Union Congress, Mick Cash, RMT’s general secretary, said: "The fiasco over Stagecoach and Virgin being banned from the franchise lottery, because they refuse to underpin ‎their pension obligations, has laid bare the chaos of privatisation and has left RMT members, including many in Scotland, facing a period of deep uncertainty.

"That scandalous situation has to be brought to an end as a matter of urgency.

"RMT has made it clear that any threat to our members pensions, jobs or working conditions as a result of a politically-driven, privatisation crisis they are not responsible for will be met with co-ordinated and robust action."