An interim report of the TfL Pension Scheme review has proposed four different defined benefit options, including career average schemes. Unions showed relief that no defined contribution or cash proposals were made but threatened to strike if pensions are cut or contributions increased.  

 

The report published on Friday comes as the mayor of London and Department for Transport are thrashing out another last-minute funding deal for the pandemic stricken public transport system. 
London’s transport service has been the object of major disagreements between the capital’s Labour mayor Sadiq Khan and Conservative central government.  

 

A short-term funding deal that had been achieved ran out on Saturday without being replaced. The deadline has been extended until 17 December as negotiations continue. Transport minister Grant Shapps told parliament on Monday that support to TfL is on the condition that TfL reaches financial sustainability as soon as possible and with a target date of April 2023, which includes identifying new sources of income of between £500m and £1bn. 

 

Central government’s June funding agreement came with other strings attached, including a review of TfL’s final salary pension scheme, which unions and observers have said is politically motivated.

 

The review started in August this year, and responses by the TfL trustees and the Transport Salaried Staffs' Association - the biggest union in TfL - both argued that the scheme was on a good footing unless TfL’s covenant weakens, which is primarily the case if central government denies it long-term funding.  

 

The interim report of the pension review, led by Sir Brendan Barber with the support of Joanne Segars OBE, has now shortlisted four options; DC and cash options were not on the shortlist. 

 

The options outlined in the report are: 

 

A TfL spokesperson said: “Sir Brendan has compiled an interim report, which provides an update on the progress of the Independent Review; including an explanation of the options for potential reform of the TfL Pension Fund that will be considered in further detail by the Review and those options that will not be considered further. Sir Brendan submitted his report to TfL today and TfL has now submitted it to Government as required by the Funding Agreement.” 

 

TSSA said it welcomes recognition that the existing scheme is a viable ongoing option and restated its opposition to any cuts. “Let’s be clear – our members will not accept any cuts to their pensions or hikes to contributions. This is a fully funded scheme and any attempt to scrap it will be overtly political and we will resist any cuts in the strongest ways possible. We stand ready and willing to ballot for strike action to protect members’ pensions,” said general secretary Manuel Cortes. 

 

The National Union of Rail, Maritime and Transport Workers, which represents drivers, said in January that it would use “every weapon” in its arsenal if the pension scheme was changed. 

 

   

For TSSA, the report confirms that the scheme is the only substantial benefit on offer to TfL employees; it says that the vast majority of TfL or London Underground staff have no health or other benefits. 

 

“It’s significant that the report specifically recognises the pension scheme as the only benefit of substance to TfL staff. With staff retention issues across the organisation, pressures on salaries and threats of staff cuts, this must be central to considerations and the current scheme must be retained,” Cortes said. 

 
The Department for Transport declined to comment. 

  

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