A decision about whether Transport for London’s (TfL) staff pensions should be changed as part of the funding settlement to keep London’s public transport running has been delayed.
Under the terms of the funding settlement agreed upon last August, TfL sent a report to the Department for Transport (DfT) last October outlining a range of options that could see staff pensions reformed, and also an option for no change at all.
In a letter sent to TfL’s Interim Commissioner, Andy Lord, the DfT said that “given the complexities of the options and the potential implications for wider Government, the Secretary of State has agreed an extension of the 31 January deadline, in order that Government can give the options further consideration.”
The revised date for TfL and the Mayor to agree with the government on a final proposal is now 28th February 2023.
At that point, if there are changes being proposed, those have to then go out to consultation with the staff and unions by May 2023, and only if an agreement is found there would any changes come into effect.
A Transport for London spokesperson said: “In our October options paper, we raised issues and questions that required responses from Government to further develop any possible proposals. The Government has today written to us to advise that they are still working on providing these to us. At the Government’s request, the 31 January milestone has now been revised to 28 February. It remains the case that there are still no plans for the reform of TfL pensions or any changes being proposed.”
Although TfL’s pension is more generous than most, that’s mainly a legacy of how the GLA was created by the national government, which locked in the scheme, so it’s not easy to change it anyway.
The main difficulty with how the pension is managed is that while TfL is regulated as a local authority, the pension is classified as a private sector scheme, where TfL is responsible for both past and future liabilities. A government guarantee on these liabilities could reduce TfL’s contributions to the scheme and save an estimated £100 million a year without reducing payments to staff. That would require a change in the law, so the decision lies with the government, not the Mayor.
The request from the government to study if TfL’s pension should be reformed has been one of the issues cited by the RMT union in its recent strikes, although TfL has regularly insisted that at this moment in time though, there are no changes to the pensions on the cards.
