SEA CHANGE AT MERCHANT NAVY PENSION FUND

2009 is a big year for the Merchant Navy Royal Pension Fund (MNRPF) following on from the valuation of the Fund. A formal valuation is carried out every three years, and the Fund has an informal valuation each year. The 2008 valuation results are being discussed at the moment, but the initial results show that the shortfall of assets held against the Fund liabilities has increased significantly. THERE ARE A NUMBER OF REASONS FOR THIS: • The Trustee has taken a more cautious position in estimating future investment returns • The expectation that members will live longer and draw pensions from the Fund. • The regulations which govern how Trustees have to act have been changed since the 2005 valuation. These regulations mean that all Trustees have to take a more safety first attitude than they would have been expected to be before. The impact of these three factors means that the deficit has increased to £203 million. The impact of this on seafarers’ employer contributions is to more than double the £13 million they have paid annually since 2001. It was assumed by the Actuary in his last valuation that the deficit would be cleared in 2015, if the Employers continued to pay the £13 million each year. Because of the revised Actuarial assumptions it is expected that the Employers will have to pay at least £26 million per year for at least 10 years before the deficit is cleared. MEETINGS There are around 50 employers who contribute to the Fund. Because of the impact of the valuation results, the Trustee is consulting with employers about the underlying assumptions which have been used in calculating the results, and a meeting is to be held with the Employers this month to discuss the actuarial assumptions. After this the Trustee will discuss and finalise the valuation report and the increased contributions will be required from the Employers. The expected future long term deficit in the MNRPF means that, apart from the pension increases for service after April 1997, it is highly unlikely that there will any future pension increase paid to pensioners. MNPA Ltd has not been able to contact more than 8,000 members. This means that these members don’t receive benefit statements, annual reports or any communication from the Trustee. The Trustee cannot trace these members as they may have changed address, died or forgotten about the benefit they have earned and they can’t be paid their benefits. There is a rule which allows the Trustee to reclaim the benefit from these members back into the Fund if they have not claimed this by age 68. An exercise is being considered which means that these liabilities are not taken into account by the Trustee and the assets used to meet other MNRPF pensions. If a member appears after this time, the Trustee will still pay the benefit due but it will take longer to sort out and pay the benefit. If you are unsure that you have kept the Fund updated of your latest address please write to : MNRPF, MNPA Limited, Leatherhead House, Station Road, Leatherhead KT22 7ET SEA CHANGE AT MERCHANT NAVY PENSION FUND Employers past service liability contributions set to increase significantly RMT helpline 0800 3763706 :: february 2009 :: RMTnews 16