NATS has made an announcement in respect of a deferral of payments into the Defined Benefit pension scheme. Prospect and PCS are issuing the following clarification stating our position.
First and foremost, Prospect and PCS are disappointed that we were not consulted about asking for any deferral of pension or deficit repair contributions before this request was made to the Trustees. Whilst we understand the rationale around NATS’ immediate cash flow issues and the Pensions Regulator's advice around considering such measures, it is always of concern to us if payments into the DB Scheme are ever deferred. We also believe that any approach to the Trustees for such considerations are more appropriate if NATS can confirm that they have engaged with the Trade Unions beforehand.
The Trustees have agreed to a three-month deferral with a very strict timeline of when the deferred funds must be repaid. It is important to note this is a deferral of payments and NOT a pension holiday. The trustees have stipulated the deferred payments (approx. £22 million) must be paid in full in September, its therefore disappointing that NATS didn’t refer to this in their communication.
We are content that the Trustees decision should protect members benefits in retirement and they will be constantly monitoring the situation to ensure the best for the scheme. For the avoidance of doubt, the deferment has no bearing on scheme benefits for members. There will be no impact on those members in the DC Scheme or those that have left the DB scheme and are in receipt of the salary uplift.
In light of NATS managements actions, we have written to the Trustees underlining our view that a three-month deferral is sufficient to provide NATS with some cash flow without putting undue strain on the scheme, providing that the deferred payments are made good.
We don't believe that continuing to defer payments into the DB Scheme is the best way to ensure either the long-term viability of the scheme or the stability of NATS as a strong and profitable business. It is our view that deferring pension payments should be an option of last resort and that NATS should pursue other funding sources e.g. from HM Government.
Prospect ATCOs’, Prospect ATSS and PCS Executives.