Pensions in the Nuclear industry

From defending members’ statutory pension protections in the courts to representing individuals with specific pension issues, Prospect has a track record on Nuclear industry pensions it can be proud of.

Members employed in the Nuclear industry belong to a range of different workplace schemes. Prospect’s role is to protect and improve the terms of all members’ pensions.

Workplace pension schemes

The largest scheme in the industry is the Combined Nuclear Pension Plan (CNPP). This is a multi-employer scheme covering several companies in the Nuclear Decommissioning Authority (NDA) group. It has defined benefit sections for members who previously transferred from public service pension schemes and defined contribution sections for members who joined since then.

Another large defined benefit pension scheme in the industry is the Magnox Electricity Supply Pension Scheme (Magnox ESPS) (this was closed on 31 August 2007 and new entrants since then have joined the defined contribution section of the CNPP).

Private sector employers who are not in the NDA group offer their own pension arrangements. These are generally much better than the statutory minimum requirements but are almost invariably defined contribution schemes for new entrants.

There are a number of public sector organisations in the sector who can still offer public service pension schemes to their employees (either the UKAEA’s Combined Pension Scheme or the Civil Service Pension Scheme).

Prospect’s Research department has produced content on different pensions issues relevant to members in this sector. Some of these are detailed below. You may also find some of the general pension topics (such as state pensions and pension tax relief) covered in the main ‘pensions and retirement’ pages useful.

The final salary pension schemes in the NDA group

The two final salary pension schemes in the NDA group are the CNPP and the Magnox ESPS. Most members of these schemes are covered by statutory pension protections – promises enshrined in legislation at the time of privatisation / contractorisation.

These protections prohibit employers or others from making detrimental changes to pensions. Despite this, the government announced it would apply the principles of the 2011 reforms of public service pension schemes to the final salary pension schemes in the NDA group.

The recognised trade unions had to engage in negotiations with the government because of the threat that the statutory protections could be bypassed or revoked. This process resulted in a better outcome than the government first proposed, one that protected members’ pension ages.

A majority of Prospect members ultimately agreed to the changes in ballots held in 2017.

For various reasons, the legislation that was needed to implement these changes was not introduced for many years. This delay benefitted members who continued to contribute and accrue benefits on the original basis for much longer than expected.

Primary legislation that will give the government the power to make regulations to implement the changes that Prospect members voted on, is currently going through Parliament. Officials aim to implement the changes from April 2024.

Further detail on the proposed changes (including examples and FAQs) can be downloaded (by logged in members) from: briefing about changes to final salary schemes in NDA group.

A follow-up FAQ covering additional questions raised by members is also available (by logging in) from: follow up FAQ about changes to final salary schemes in NDA group.

Defined contribution pension schemes in the Nuclear industry

Most Prospect members working for private sector employers in the Nuclear industry are now in defined contribution pension schemes.

While the defined contribution schemes in this industry are almost all better than the national average, they do not generally provide outcomes that are as good as those offered by final salary or other defined benefit pension schemes. This is because:

• Employer contributions are generally lower
• The main risks are borne by members not employers

It is important that we ensure that members of defined contribution schemes in the industry have pension provision that enables them to retire at a reasonable age with a good standard of living. This will require improving employer contribution rates in some cases.

The largest defined contribution scheme in the industry is the CNPP (most new entrants to companies in the NDA group join this scheme). We have discussed the terms of this scheme with the NDA.

Our case for improvements to the defined contribution section of the CNPP is based on arguments set out in a briefing written some time ago, this can be downloaded from: case for improvements to the defined contribution section of the CNPP.

Improvements to other defined contribution schemes in the industry must be made on a branch-by-branch basis.

Our approach to this is to:

1. compare schemes to a standard that we believe is necessary to deliver reasonable outcomes and
2. benchmark provision against the rest of industry. Where this supports the case for improvements, we include these in our negotiating agenda.

If you would like to know more about campaigning to improve defined contribution pension schemes in the industry, please contact your local rep or negotiating official.

Public service pension schemes in the nuclear industry

Some public sector organisations in the industry are still able to offer membership of public service pension schemes. The main public service schemes are the UKAEA’s Combined Pension Scheme (CPS) and the Civil Service Pension Scheme.

Reforms to public service pensions were proposed by Lord Hutton in 2011 and implemented in the main schemes in April 2015.

Smaller public service pension schemes (like the CPS) were originally planned to be reformed along the same lines shortly afterwards, but this timetable was affected by legal challenges.

The original intention was for CPS members to transfer to the reformed scheme for civil servants from 1 April 2017. After the pause caused by the legal challenge was lifted, Treasury confirmed that CPS members could transfer from April 2023 at the earliest.

The latest CPS accounts stated that:

“HM Treasury have confirmed the transfer will occur from April 2024 at the earliest. The changes will not affect pensioners or deferred members. UKAEA and the Schemes await further information from HM Treasury.”

Members of the Civil Service Pension Scheme can get further information from the relevant sections of the main ‘pensions and retirement’ pages.