Bosses at Transport for London want to change the status of its pension scheme in order to make budget savings.
They have asked the Department for Transport to correct an anomaly whereby TfL is classified as a private company. This requires it to make costly contributions to cover the risk of going bankrupt. As part of the public sector, the scheme would be backed by a Crown Guarantee instead. TfL claims the change could save “tens of millions” a year.
TfL is under pressure from City Hall to make a “hitlist” of savings to absorb a 12.5 per cent — or £220 million — cut in government grant from 2015-16. The Mayor believes much can be achieved by wage restraint. Changes to retirement age and generous perks are also under fire.
Sources say the Mayor’s cycling budget of £913 million over the next decade has been protected.
Steve Allen, TfL’s managing director of finance, said the change would enable it to provide better value for money to fare and taxpayers. He added that benefits paid to the fund’s members would not be affected.
