Railway Pension Commission Set Up

Employers and trade unions in the rail industry have agreed to set up an independent commission in an attempt to resolve the industry's pension problems.

The idea of an independent commission arose after rail unions voted earlier this year to strike in protest over plans to make large increases to the pension contributions of their members.

Since privatisation the rail industry's pension scheme has become fragmented, with more than 100 separate sections. Last year a regular valuation of the scheme revealed that two-thirds of the sections had deficits. As a result, plans were put forward that in many cases would have forced members to make higher contributions or have a slower build up of pension entitlement. In some cases, pension contributions would have gone up to more than 10%, and in one case 18.5%, of staff salaries.

The unions received a "yes" vote in an industry-wide ballot for industrial action in May that would have led to the first national railway strike since the General Strike of 1926. However, further talks with the employers led to the idea of a commission, which will look at other ways of dealing with rising pension costs.

The chair of the commission will be Jeannie Drake, a full-time official with the Communication Workers Union. She sat for nearly three years on the government's Pensions Commission, led by Lord Turner, and her nomination was agreed by both sides. The two other members are Bryn Davies, an actuary nominated by the unions, and Peter Thompson, an actuary nominated by the employers. They will start work this month and publish an interim report early next year.