MARITIME PENSIONS

MARITIME PENSIONS RMT helpline 0800 376 3706 :: march 2020 :: RMTnews 13 Since the closure of the Merchant Navy Ratings Pension Fund in the early 2000s and also various shipping companies closing their final salary pension scheme to future service, many RMT members’ working in the maritime industry are either not saving enough for their retirement or are not even contributing to a workplace pension scheme. RMT has decided that it is time that pensions were brought to the top of the maritime industrial relations agenda. While some members will be contributing to some form of occupational pension schemes, many in the maritime industry were not members of their employers’ pension scheme and not saving for their retirement. With this in mind the union has launched a survey asking employers what type of pension scheme they offer to their employees’ i.e. Defined Benefit (DB) or Defined Contribution (DC). In the case of DC RMT also asked what level of contributions did employers’ pay into their employees’ pension pots. This question is very important if members are trying to build up a level of pension which is likely to give them a decent standard of living during retirement. As example pension specialists, First Actuarial, state that if an individual wanted a pension of half their salary at retirement they would need to have contributions of at least 16 per cent per annum going into the pension pot for 40 years. The results of the survey revealed that the majority of employers who offered some form of DC pension arrangement paid the minimum contribution allowed under legislation of just three per cent. Clearly if a worker wanted to receive half their salary at retirement they would have to make contributions of at least 13 per cent on top of the employers three per cent which we would suggest is for the vast majority of workers unaffordable. While the results of this short survey indicated that many employers were paying as little as possible, RMT was further alerted by union representatives that many seafarers’ were either not members of an occupational pension scheme or, where an employer had more than one pension arrangement they were contributing to, was an inferior scheme which offered the lowest level of employer contribution. Even more concerning was that many of members were in a pension scheme which did not offer any life cover even though they had the option to join a scheme which offered dependants benefits for no extra cost. RMT ran a pension survey amongst all maritime members last year to find out more about workplace pension options and how to improve pensions for seafarers and over 700 shipping and offshore members responded • Just under eight per cent of those responding were female maritime members • 37 per cent of those responding were aged between 51 and 60 with four per cent of responses from members aged between 17 and 30 • Just under 16% of members were not contributing to their employers occupational pension scheme • Almost 13% of members had opted out of their employers’ pension scheme • 58% did not know which type of pension arrangement they were a members of i.e. Defined Benefit or Defined Contribution • Almost half of responses did not know what level of contribution they were paying into their pension scheme with almost 59% not knowing how much their employer was contributing • 54% did not know if they had death in service (life cover) protection RMT findings revealed that 13 per cent of seafarers had opted out of a workplace pension scheme and therefore were not contributing to their employers’ pension scheme. Yet, when you consider that employees’ contributions receive tax relief and they are also receiving contributions from their employer it is concerning that individuals are not taking advantage of building some form of pension pot. The survey findings revealed that 54 per cent of respondents did not know whether their loved ones were protected in the event of their death by some form of life cover. We found that some of the pension schemes offered to employees’ have no death in service cover. However, often an employer will have two pension arrangements running side by side where one will offer such protection and the other will not. Employers’ will often facilitate more than one pension scheme, a statutory auto enrolment vehicle and a scheme employees can join if they so wish. RMT has found that the scheme which offers lower employer contributions and no life cover will often be the employers’ auto enrolment qualifying arrangement. Therefore, if employees’ want to receive the higher employer contribution and the life cover they have to make an informed choice to opt out of the auto enrolment scheme and join the better scheme. The results of this survey have been considered by the union and who have come up with the following action points in respect of having a clear strategy on pensions which include: • Educating reps and members by using union resources such as running a maritime pension course • That there are clear and understandable pension materials made available so that pensions can be seen as a key part of our members’ terms and conditions • initiate meetings with employers’ to discuss pensions and that pensions are included on the agenda when discussing our members’ terms and conditions • That it approaches employers’ in respect of establishing pension forums within individual companies which would discuss pensions on an on a regular basis If you are a maritime or offshore member without a pension you need to take action now RMT national secretary Darren Procter with young maritime members