TfL to review pension scheme as part of new funding package

On Monday, it was announced that a funding package of £1.08bn was agreed between TfL and the Department for Transport, which will be in place until  December 11 2021. 

The package will contribute towards TfL’s revenue loss due to reduced passenger numbers using their services as a result of the pandemic, the government said 

As part of this arrangement, TfL will implement a work programme to allow the company to reach a “financially sustainable position as soon as possible, with a target of no later than April 2023”.

One of the initiatives included in this project was a review of TfL’s pension scheme, to identify “potential reform options,” with the aim of moving TfL Pension Fund “into a financially sustainable position”, the government stated.

According to its latest actuarial valuation, concluded in March 2018, the scheme’s deficit stood at £603m — an increase from £396m in 2015.

With more than 85,000 members, the scheme has a deficit recovery plan in place until 2026, with annual payments around £70m. 

Pensions Expert understands the review of the scheme was imposed by the government as a condition to provide the funding arrangement to TfL.

Currently there are no proposals for change, with the company considering how to conduct the review. Should any reform be proposed, TfL will launch a consultation to its staff and trade unions.

Trade union RMT has already dismissed the government finance package, with general secretary Mick Lynch announcing its members would resist it through “London-wide industrial action if necessary”.

He said: “It is completely unacceptable for transport workers who have risked, and in some cases tragically lost, their lives to now be asked to pay this political price for the coronavirus.

“Attacks on workers pensions are wholly unacceptable while driverless trains are unwanted, unaffordable and unsafe.”