MERCHANT NAVY PENSION SETS NEW COURSE

RMT helpline 0800 3763706 :: march 2010 :: RMTnews 24 There has been concerns for some time that it would not be possible to maintain the current pension arrangements offered by the Merchant Navy Ratings Pension Plan (MNRPP). The key reasons are the number of members has declined resulting in an increasing proportion of contributions being spent on administration costs and changes have to be made to ensure the plan meets the government’s new pension rules, originally set to be introduced in 2012 but now put back to 2013. The Trustee intends to replace the MNRPP with a new Group Personal Pension Plan called The Merchant Navy Group Personal Pension Plans (MNRGPP) to be arranged with AEGON Scottish Equitable. All future pension contributions will be made into this plan. Each employer will establish their own section of the MNRGPP. It is intended that the old pension will close to future contributions on 30 June 2010 and the new one will start on 1 July 2010. RMT’s nominees on the Trustee Board and the employers Trustees have insisted that the future arrangement must continue to offer the same life assurance benefit which the MNRPP provides. RMT and Chamber of Shipping have agreed the new proposals. WHY DOES THE PENSION NEED TO BE REPLACED? • The administration costs for Occupational Pension Schemes have risen as a result of changes in pension rules and these reduce the benefits payable at retirement. A Group Personal Pension Plan can operate with lower administration costs, increasing the amount invested behalf, which in turn increases the pot of money available to provide retirement benefits. • The MNRGPP is able to offer a wider choice of pension options and investment choices. The Joint Ratings Pension Committee has arranged for contributors to receive ongoing independent pensions advice on this and other pension matters from Pensions & Wealth Planning Ltd, at no cost. WHAT ARE THE MAIN FEATURES OF THE NEW GROUP PERSONAL PENSION PLAN? • Employers will contribute four per cent of employees Pensionable Salary towards their pension. • Employee’s own contributions will continue to be a minimum of 3.9 per cent of Pensionable Salary. Whether employees are taxed in the UK or not, they will benefit from tax relief up front equal to the standard rate of Income Tax, currently 20 per cent. As a result, the net deduction from pay will be 3.12 per cent of Pensionable Salary. Employees may contribute more if they wish. • Employees will benefit from FREE pensions advice from Pensions & Wealth Planning Ltd, through Group Pension Meetings, regular clinics and a telephone hotline service. • Aegon Scottish Equitable is one of the largest insurance companies in the world and have substantial financial strength. Importantly, they also have consistent long- term past investment performance across a wide range of investment funds. Scottish Equitable is building a website for members, designed to assist in making the right decisions in saving for retirement. • Employees will have the opportunity to invest their pension plan in a way that matches their personal attitude to investment risk. But, if they prefer to leave investment decisions to the Governance Committee, a lifestyle pension option will also available, reducing investment risk as retirement approaches. • There will be flexibility to select when benefits may be taken, but once contributions are invested they cannot normally be accessed until age 55. It has been agreed that a governance committee comprising of RMT officials and employer representatives will be established to ensure that the new pension operates in the members’ best interests as well as providing good value. WHAT HAPPENS NEXT? The Joint Ratings Pensions Committee is keen that all plan members understand why they are making this recommendation and have written to members seeking any views or comments with a deadline of responding in writing or email by 31 March 2010. Members questions on this matter, should be directed in the first instance to contact Russell Warman at Pensions & Wealth Planning Ltd on 01252 861380 or by email at enquiries@penwp.co.uk. MERCHANT NAVY PENSION SETS NEW COURSE Pension arrangements for Merchant Navy Ratings to change later this year