New rail pensions plan is rejected: BR and unions say proposals are not good enough

THE GOVERNMENT'S latest proposals for dealing with British Rail pensioners after privatisation have been rejected by the company and unions. The trustees are also thought to be unhappy.

Rejection will add to controversy over the privatisation of BR - due to be debated in the House of Lords this month - and reflects worries about the security of pensioners' rights.

In January the Government outlined a plan for transferring some of the pounds 8.8bn pension fund to the Treasury. In return, the Government would have taken on the liability for paying BR pensions. This was dropped in the face of fierce opposition.

The alternative - which remains a government favourite - was for some of the fund to be set aside in a closed scheme that would be shut to new members. This would have to pay pensions out of its existing resources and would no longer be able to call on the Government if it ran out of money.

At the end of May the Government made a further concession, agreeing that the closed scheme for pensioners could become part of the joint industry scheme agreed for BR staff if satisfactory arrangements could be made. A note dated 6 June was circulated to BR, the trustees and others.

But BR says this is still not good enough. A spokesman said the board was continuing to discuss 'the appropriate way forward to ensure that pensioners retain the full security they now enjoy'.

The 1992 White Paper promised arrangements that would ensure that 'the security of rights enjoyed by pensioners and members now is not undermined by privatisation'.

Union leaders believe the current proposals do not fulfil this promise in respect of pensioners. Jimmy Knapp of the Rail, Maritime and Transport union said yesterday: 'RMT believes pensioners should be encompassed within the joint industry scheme as an integral part with the benefit of guaranteed index-linking, the ability to participate in any future surpluses and government solvency backing.'