Royal Mail Union Threatens Strike to Protect Pension Plan

[jetblack]

I could have some sympathy with your views if the Royal Mail pension was unique in respect of other occupational pensions.

Thats neither here nor there, as an argument. Who are you comparing us to ?
The UK economy continues to grow over time. The question is, who is benefitting from the growth - which in part is faciltated by technological advance ? You and I ?

We are in a better position than employees of BHS and TATA Steel etc.

Yep. We are in a better position than those in the graveyard as well. What of it ? This is not a race to the bottom.

I believe that Royal Mail is doing its best by its employees to keep the pension open

I don't. Far from it. I think that they (and the Conservative pro City Government) have played it very well getting privatisation through without too much ado.
Why do you think that ?

..the Bank of England interest rate is the lowest its been in its 322 year history.

True. But the economy continues to grow in spite of it (or because of it). That is, the wealth that the country produces year on year, continues to increase. How is that (new) wealth going to be distributed - that is the question.

The TUC or Union members have no control over financial markets

True, but..

I really can't see what the TUC can do.

.. that is non sequitur.

If you can think of any solution where by we can keep the same level of pension benefits I will be interested to hear your views.

OK - RM needs more money to put into the pension scheme. Why doesn't it raise revenue by increasing its prices ? The cost currently to the consumer is artificially low as the company isn't able to continue to meet its obligations to its employees.
And lets make no mistake here - we are Royal Mail.

Oh - and cut, yes cut, the shareholder dividend.

And, while we are at it, get rid of a raft of middle management, who, in my own personal 20 year experience at Royal Mail contribute very little indeed.

[milly]

I could have some sympathy with your views if the Royal Mail pension was unique in respect of other occupational pensions.

Thats neither here nor there, as an argument. Who are you comparing us to ?
The UK economy continues to grow over time. The question is, who is benefitting from the growth - which in part is faciltated by technological advance ? You and I ?

We are in a better position than employees of BHS and TATA Steel etc.

Yep. We are in a better position than those in the graveyard as well. What of it ? This is not a race to the bottom.

I believe that Royal Mail is doing its best by its employees to keep the pension open

I don't. Far from it. I think that they (and the Conservative pro City Government) have played it very well getting privatisation through without too much ado.
Why do you think that ?

..the Bank of England interest rate is the lowest its been in its 322 year history.

True. But the economy continues to grow in spite of it (or because of it). That is, the wealth that the country produces year on year, continues to increase. How is that (new) wealth going to be distributed - that is the question.

The TUC or Union members have no control over financial markets

True, but..

I really can't see what the TUC can do.

.. that is non sequitur.

If you can think of any solution where by we can keep the same level of pension benefits I will be interested to hear your views.

OK - RM needs more money to put into the pension scheme. Why doesn't it raise revenue by increasing its prices ? The cost currently to the consumer is artificially low as the company isn't able to continue to meet its obligations to its employees.
And lets make no mistake here - we are Royal Mail.

Oh - and cut, yes cut, the shareholder dividend.

And, while we are at it, get rid of a raft of middle management, who, in my own personal 20 year experience at Royal Mail contribute very little indeed.

I'm afraid raising prices would not raise more revenue and is very likely to put more Postal workers out of work as it would help our competitors match or undercut our prices and take business from us.

[jetblack]

No - it wouldn't put more postal workers out of work. There would be the exact same number of postal workers. Only difference being that the ones that now were in employment doing the job (wether it be for RM or not) would be paid less.

And they'd have a s**t pension. And they'd be working till they are 72.

And you still think the union has no part to play ?

Only question is - for the likes of you and I - do we have the confidence to stand up for our rights ? Can we stand together for our mutual benefit ?

Or are we going to roll over ?

[milly]

No - it wouldn't put more postal workers out of work. There would be the exact same number of postal workers. Only difference being that the ones that now were in employment doing the job (wether it be for RM or not) would be paid less.

And they'd have a s**t pension. And they'd be working till they are 72.

And you still think the union has no part to play ?

Only question is - for the likes of you and I - do we have the confidence to stand up for our rights ? Can we stand together for our mutual benefit ?

Or are we going to roll over ?

Sorry but your posts seem to lack any thought and are mainly platitudinous.

[jetblack]

LOL - looks like we'll be rolling over then.

Thanks.

[RobertT]

The Royal Mail have stated that to keep the pension scheme open in its current form will cost another £500 million per year. They spent roughly £220 Million on dividends in the last year. You don’t have to be Carol Vorderman to work out that even if they reduced the dividend to £0, they’d still be a big shortfall.
You also need to factor in the costs of modernisation, etc.

The drop in bond/gilt prices has happened and is not just something to brush under the carpet, like some seem to be doing. It means that the investments used to pay our pensions aren’t growing as much as expected, that produces a deficit, which the RMPP has had before – a big £10 Billion one! Those low prices are not going to go away any time soon.

Increased life expectancy is also a real problem. If it increases by even 1 or 2 years, that can put huge strain on the balance sheet of a DB pension scheme with thousands of members.

There are many cases where DB schemes have closed down and been replaced by DC versions, and it’s been happening for many years. I believe DHL is an example. Many of our other competitors have never offered a DB scheme at all.

Very few companies are run like John Lewis, where the workers are partners in the business, perhaps more should be! But that is not reality is it? RM is not run as some kind of co-operative. If you want to benefit from the growth the UK generates, why not jump on the bandwagon and grab some of it yourself, instead of being idealistic and expecting everything to be given to you.

I don’t want the RMPP to close and I hope the CWU can pull something out of the bag to keep it open, even for a short time. But I firmly believe that come April 2018 we will all be in the DC pension and the unions main job will be to make the situation is little more bearable by winning a few concessions, like increased company contributions, etc.

It’s not about being defeatist or rolling over and taking whatever comes our way. It’s about looking at the facts and coming to a logical conclusion.

[fishtank]

Here's an interesting if controversial subtext to the argument.
If increased life expectancy is the major driver why aren't women forced to contribute more or work longer?

[milly]

Here's an interesting if controversial subtext to the argument.
If increased life expectancy is the major driver why aren't women forced to contribute more or work longer?

Many Women take a break from employment to have children,its seems rather unfair to penalise them.

[RobertT]

Here's an interesting if controversial subtext to the argument.
If increased life expectancy is the major driver why aren't women forced to contribute more or work longer?

I’m no lawyer but I would imagine it would be discrimination if employers forced women to work for longer or pay more. Plus as these things are done on an average basis, the actuaries will factor in the difference between the genders.

In terms of the state pension, women are now being brought in line with men as far as pension age is concerned.

[fishtank]

I’m no lawyer but I would imagine it would be discrimination if employers forced women to work for longer or pay more.

So the bottom line, the increased cost of pensions due to increased life expectancy can be ignored if there is a legal impediment?

Plus as these things are done on an average basis, the actuaries will factor in the difference between the genders.

"Factoring it in" simply means sweeping it under the carpet and means very little to someone having to live on a reduced pension based on an "average life expectancy" skewed by gender differences.

In terms of the state pension, women are now being brought in line with men as far as pension age is concerned.

If we're talking about pure bottom line numbers and that seems to your whole argument for taking a "pragmatic" approach to the pension issue women shouldn't be "brought in line", they should be working longer. This is an example of the hypocrisy in the whole " living longer" argument. If we want to treat people, work life and pensions like an accountant's spreadsheet, let's do it properly and see how many politicians have the courage to make vacuous statements like "we're all living longer".

On a side note the Bank of England's chief advisor said yesterday pensions are far too complex for most people, including himself to understand, he reckons property is a better bet. What chance does a postie have?

[RobertT]

Up until a few years ago you used to be able to buy annuities with your DC pension pots that were gender specific, so women got less because they live longer on average. That was changed by the government and is now law. So things have actually gone in the opposite direction to how you suggest things should be.

As far as I know employers have never been able to or have never been brave enough to attempt introducing gender specific pension plans. I would have thought it would be a public relations nightmare and would result in mass discrimination claims.
The CWU also have a specific committee relating to women’s matters, so I can’t see your ideas going down too well with our female comrades.

The state pension age for women is increasing from 60 to 65 in the space of 8 years(2010-2018) and will then increase further along with men’s SPA. That’s to shorten the gender gap and make state pensions less unfair.

To a certain degree I agree that ‘doing it properly’ would mean women working longer than men. But that is not how things currently work and I would rather deal in facts, not idealism or rhetoric!

As for the Bank Of England’s advisor: That’s coming from a bloke who’s in line to get a £80k per year pension and lives in a plush pad in Surrey and has a holiday home on the Kent Coast! And whose interest in property probably only extends to the over inflated prices of London and the South East.

Oh, and a former pensions minister, who actually does know something about pensions, says he’s ‘divorced from reality’:
https://www.theguardian.com/money/2016/ ... -economist" onclick="window.open(this.href);return false;

Personally I don’t see the problem with pensions. You get your statement/s each year and you do your maths and work out if it’s likely to be enough to live on in the future or not. Obviously the younger you are the less accurate they’re likely to be and I appreciate they make certain assumptions about how much you might earn, or pay in, or whether the scheme stays open or not. Those assumptions don’t always turn out to be correct because nobody knows what’s going to happen in the future. That applies to pensions just as much as anything else.

The logical thing to do is to look and see what you’ve accrued ‘today’ in terms of your expected income and ignore any future assumptions, which are really just guesses to a large degree particularly for younger people. And then see how you can increase those figures yourself to fit in with what you want to do.

Spouting idealism isn’t going to alter the fact that people are living longer and it’s increasingly up to the individual to ensure they can retire when they want to.

[heapsy]

Here's an interesting if controversial subtext to the argument.
If increased life expectancy is the major driver why aren't women forced to contribute more or work longer?

I’m no lawyer but I would imagine it would be discrimination if employers forced women to work for longer or pay more. Plus as these things are done on an average basis, the actuaries will factor in the difference between the genders.

In terms of the state pension, women are now being brought in line with men as far as pension age is concerned.

Men have been discriminated against for years. They have paid into the system for longer, therefore have paid more in. They then drew LESS out because we don't live as long. How does that work? Now women are moaning. They should get over it and get on with it like we have to.

[charlie1]

I have seen some pretty big gains in the value of my AVC holding with Zurich via Royal Mail. The gains incidentally began the very week after the Brexit vote and have continued to rise considerably since.

Just when was our pension liability valued and is it not fair to assume they will have seen these recent gains too.

[RobertT]

I have seen some pretty big gains in the value of my AVC holding with Zurich via Royal Mail. The gains incidentally began the very week after the Brexit vote and have continued to rise considerably since.

Just when was our pension liability valued and is it not fair to assume they will have seen these recent gains too.

The RMPP is invested mainly in gilts and bonds which have seen a fall, hence the increased unaffordability of the scheme.

Depending on which fund/s you have your AVC invested with(growth fund maybe?), your money may well be invested more in equities which have seen a big rise since Brexit.

[nataddick]

A very good article in yesterday's Sunday Telegraph that highlights many of the points forum members have been making on this topic. RM gets a mention !

http://www.telegraph.co.uk/investing/sh ... vestments/" onclick="window.open(this.href);return false;