Railway pension commission set up

RMT leader Bob Crow threatened a national strike over pensions in May

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

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

The commission will look at other ways of dealing with rising pension costs.

Since privatisation the 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.

No strike

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.

At the time, the unions - the RMT, ASLEF, TSSA and CSEU - said the industry's pension arrangements were in crisis and demanded that contribution increases scheduled for July should be halted.

But after further talks with the employers the idea of a commission was developed.

Michele Lewis, pensions officer of the TUC, said: "They have been asked to come up with some solutions that are a long term, sustainable, arrangement."

John Armitt, chief executive of Network Rail, welcomed the idea on behalf of railway employers.

"This commission provides a real opportunity to make progress in tackling the issues involved in providing affordable, good value pensions across the rail industry," he said.

"We look forward to considering the Commission's findings, and to working with the trade unions, as we seek ways of securing long-term pension provision for people in the industry," Mr Armitt added.

The commission

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 own Pensions Commission, led by Lord Turner, which published its final report earlier this year.

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.