Planning pensions – how Nautilus helps members look forward to a secure retirement

Nautilus and its predecessor unions have a long history of working with employers and pension providers to ensure seafarers get the retirement income they deserve. Pension support for members is still on offer across the Union's three national branches, as Deborah McPherson reports

Whatever their line of work, most employees are used to having a workplace pension scheme provided by their company, and that's often the case in shipping too, but the maritime industry also has a tradition of multi-employer pensions covering whole sectors. Nautilus was instrumental in setting some of these up and has played a role in their governance.

Pensions are considered a tax-efficient way to put money aside for later in life, to provide income for when you retire There are three types of pension in the UK to provide income for retirement: the workplace pension, the personal pension which you arrange yourself, and the state pension. The type of pension you have will depend on your personal circumstances.

Workplace pensions are offered by employers mostly via a 'defined contribution' (DC) pension scheme where you pay in a percentage of your salary and your employer also contributes to it. The contributions are then invested by the pension provider.

Some employers may still run a 'defined benefit' pension scheme, which is the 'final salary' or 'career average' pension enjoyed by many of today's older pensioners, but few defined benefit schemes now accept new staff.

All employers in the UK are required to have a pension scheme and automatically enrol eligible employees.

Maritime pensions in the UK

Nautilus has been involved in the creation and oversight of UK Merchant Navy pension schemes ever since the Union joined with employers to establish the Merchant Navy Officers' Pension Fund (MNOPF) in the 1930s. Many members are still drawing on older schemes like the MNOPF, but the MNOPF and its counterpart, the Merchant Navy Ratings' Pension Fund, are now closed to new members.

The UK industry-wide maritime pension scheme which was open to new members was the Ensign Retirement Plan. However, this scheme was wound up in June 2023, and was transferred to Smart Pension, a large multi-employer DC master trust scheme set up for employers to auto enrol employees in a workplace pension scheme.

A master trust is a type of defined contribution pension that can be used by multiple employers – with independent trustees who look after pension savings on behalf of all the employees who are members. How you much pay in via Smart Pension all depends on what your employer offers you as part of your pensions package, but you will make contributions, along with your employer and the government. Like all other workplace pension schemes, you'll receive tax relief on pension contributions from the government. You can also transfer other pensions into the Smart Pension scheme or transfer out.

Why the transfer to Smart Pension?

Ivan Laws is director of Rock Pensions, which provides executive services for MNOPF and Ensign. He explains: 'Although Ensign has delivered great value to its members, Ensign hasn't reached the size that would ensure its survival in light of the Pensions Regulator's mission to consolidate smaller DC schemes, largely due to insufficient support from maritime employers.'

In response to the regulator's position on consolidation – and facing, as a not-for-profit scheme, ever increasing regulations and associated costs – Nautilus agreed to the transfer to Smart Pension, with an estimated bulk transfer of member benefits by June 2023 at the latest.

'Smart Pension is a large scheme with many employers, not just maritime, and is already a multi-employer scheme across all sectors,' Mr Laws says. 'There will still be a maritime element and a campaign by Smart Pension to encourage more maritime employers to sign up.'

The main benefit to current Ensign members is that the move will save them substantial money in administration fees, which are reduced under Smart from 0.31% to 0.25%; and for employers it removes annual fees.

Ensign had BlackRock as its investment managers and Aegon as the administrators who also hosted the online platform members used to manage their pensions.

Under Smart neither Nautilus nor the current Ensign Trustee will be directly involved in the governance of the new scheme, any longer, because as a large scheme in its own right the Smart Pension Master Trust it has its own set of independent trustees.

Chair of Ensign Rory Murphy said: 'For over three years, the Ensign Master Trust has been delivering a high quality, low cost, flexible pension, run by and for members and employers rooted in the maritime industry.

'In joining with Smart Pension, we are now able not only to retain those qualities, but also to enhance them by reducing costs even further, offering greater digital efficiency and financial sustainability, all whilst retaining a strong and accountable governance structure.'

Nautilus and Ensign

Nautilus assistant general secretary Olu Tunde is a member-nominated trustee director of the MNOPF and vice chair of Ensign.

He comments: 'The lack of support from maritime employers for Ensign has been regrettable, but we believe joining with Smart Pension will provide great value in retirement for seafarer whose companies are in the scheme. We hope such a large scheme will also present an incentive for more maritime employers to sign up and show support for this industry wide scheme.  

'While we may no longer be directly involved in governance, we still have an opportunity to represent members via the new advisory panel for the Ensign Retirement Plan, which Smart Pension will set up to represent seafarers' needs. This will enable employers and members, as well as other stakeholders such as trade unions, to provide sector-specific feedback and support decision-making by the trustee of Smart Pension Master Trust for those Ensign members.'

UK information sessions and financial advice

Nautilus is currently in the process of planning information sessions about the new UK pension scheme, which will be held online as webinars and run via the Nautilus Pensions Association (NPA). Further details of when and how to register will be emailed direct to members.

The Union is also planning to organise regular broader information sessions on pension and financial planning in general for young Nautilus members, with the first likely to target cadets. MNOPF pension holders may also be offered a webinar in spring 2023 .

Nautilus members have always been urged to seek advice on pension issues, as this is one of the most important financial decision members will make. General information can be sought from the Nautilus Pensions Association at npa@nautilusint.org, but Nautilus is not authorised by the UK Financial Conduct Authority to provide financial advice.

However, a free no obligation consultation on financial advice is on offer from Lighthouse Financial via the Nautilus Plus benefits package. Log in to the My Nautilus membership area of the Nautilus website www.nautilusint.org.

Maritime pensions in the Netherlands

In the Netherlands, Nautilus International is involved in Dutch pension schemes in the Merchant Navy through collective bargaining agreements. Find out more at www.nautilusint.org/nl under Wat we doen / Over pensionering. If you need to contact the Netherlands office about pensions, email infonl@nautilusint.org

Maritime pensions in Switzerland

Nautilus has no direct involvement in the governance of pension schemes in Switzerland, but members can contact the Switzerland office at infoch@nautilusint.org for help regarding pay slip and pension account clarification. The office also provides information for non-Swiss members who make pension contributions in Switzerland and then end their nautical career in Switzerland.