The Independent review into Transport for London (TFL)’s pension scheme led by former trade union official Sir Brendan Barber has suggested that TFL maintains the current final salary scheme with no changes.
The government instructed TFL to set up a pensions review as part of conditions it attached to almost £5 billion in emergency funding after the Covid-19 (Coronavirus) lockdowns led to a 95% drop in revenue. The review led to two 24-hour strikes earlier this month across all Tube staff grades and positions at RMT, ASLEF and TSSA, which are three of the major Tube worker unions.
The report calls the current scheme “well run and highly valued”, as TFL currently contributes above 5% into its staff pensions.
In the proposals set out in the review, existing employees would have their current pension schemes preserved and only new staff members would have contributions revised down. It suggests that even with some reform on existing pensions, “the employer [TFL's] contributions needed will still be between five and six times the level paid by scheme members [staff].”
It also noted that any attempts to “drastically weaken” the attractiveness of the pension scheme will make TFL less competitive in hiring talent. It found that senior managers get paid 20% less in cash terms than the market average, and that if they do not meet their pay for performance targets they could receive worse pensions regardless of their service length.
Manuel Cortes, TSSA general secretary, explained that the independent review is a “vindication” for TFL workers, showing that the pension fund is viable and there is no need to slash it.
“This review has taken over six months at taxpayers’ expense and all for a politically motivated agenda aimed at punishing London. Trying to slash workers’ pensions is a low blow. We’re absolutely clear, any move to get rid of TFL's pension scheme, any ask for workers’ to pay more for less, is a red line and we will ballot for strike action,” he said.
According to TFL, it will now review the findings and take action ahead of its next round of negotiations for further government funding by 24 June.
