Summer 2020

Over the last few months members in both Unite and GMB have taken part in a survey to help give steer on negotiations on our future pension scheme. Thank you to everyone who completed the survey, who attended the drop in Q&As and to the wide ranging feedback you have provided since last year.

The negotiating team has reviewed all of your feedback and we have established a joint staffside approach, as follows:

• Negotiations are being conducted as a joint staffside

• Members can continue to feedback by email if you did not complete the survey

• Key findings include:

• Explore future pension design either around Final Salary or significantly improved option compared to employer’s proposal

• Accept tapered member contributions subject to seeing the details

• Accept balanced trustee structure subject to seeing the details

• Reject and continue negotiations on green and ethical investments.

• Feedback since Autumn 2019 has been reviewed and will be discussed in future negotiations eg. dependant pension, death in service etc.

As we move into this critical phase of negotiations we hope that the employer will reflect carefully and put forward credible options to ensure we all have a safe and secure retirement.

Governance, green and ethical investments

We are proud that members have given negotiators clear steer to scrutinise and negotiate in these areas. In fact, we are pleased to see that the current Pension Schemes Bill 2020 Part 5, Section 124 Climate Change risk (currently at the Lords stage) explicitly requires effective governance of pension schemes with regards to climate change risk. Even if this part of the Bill does not become law, we know that members are on the right side of the argument.

Pensions and Coronavirus

We have had some feedback from members asking about the impact of the Covid-19 pandemic and our pensions. We hope to release a more detailed analysis after the summer and wanted to outline staffside’s opinion.

• Pension funds should continue to invest for the long term, so although short term market conditions have likely negatively impacted overall fund values, in the long term (20+ years) that is highly likely to recover.

• If you are due to retire soon, your pension promises (from either of the NEU pension schemes) are safe. It is extremely unlikely you’ll be impacted.

• The NEU pension schemes are both open to new members, healthy with cash going in. The employer has not taken a coronavirus payment holiday as far as we’re aware.

• Just because financial markets are currently weak does not mean that any future scheme design should be designed at the same level - there should be a pragmatic long term view on investment returns. Low share prices today could provide substantial growth opportunities longer term.

• The employer has seen a growth of membership, and although this might be a short term spike in income, the employer is stronger now in terms of income than before the pandemic.

• The Pension Schemes Bill 2020, Part 5, Section 123 Funding of defined benefit schemes shows clearly that even if it is not passed in law, there is a growing movement and argument to treat open defined benefit schemes (like those we have at NEU) differently to those that might be closed.

This update references this version of the Pension Schemes Bill 2020:

https://publications.parliament.uk/pa/bills/lbill/58-01/120/5801120(Rev).pdf

You can track it's progress through parliament at:

https://services.parliament.uk/bills/2019-21/pensionschemes.html