LTB 403/17 Royal Mail Pensions

Post by **TrueBlueTerrier** » 14 Jul 2017, 18:27

LTB 403/17 Royal Mail Pensions
No. 403/17

14th July 2017

TO: ALL BRANCHES WITH POSTAL MEMBERS

Dear Colleagues,

Royal Mail Pensions

Royal Mail has today announced that they have effectively broken off talks with the CWU and decided to close the Defined Benefit scheme to future accrual from March next year and give RMMP members the “choice” of going into one of two vastly inferior alternatives.

The company’s decision to take executive action without CWU agreement is a clear rejection of our mutual interest approach. While the decision to impose change is not surprising given the company’s repeated threats to do so, it is clearly unacceptable when our pension agreement commits both parties to seek agreement and jointly develop future pension strategy.

The CWU have never accepted the closure of the DB scheme but have pragmatically proposed a solution that meets the company’s concerns about managing long term risk, responds to the inadequacies of the DC scheme, would end two-tier provision and provide a ‘wage in retirement’ for all on a more cost efficient basis than either the company’s DC or cash balance alternatives.

Despite accepting that our wage in retirement scheme is sound and workable they have never responded seriously to our proposal and from the outset of talks have been determined to introduce cheaper less favourable cash out schemes. However the company tries to dress them up, the fact is that both their cash balance and DC schemes will mean tens of thousands of CWU members will face huge losses in their future pension benefits - with the biggest hit falling on the youngest.

In relation to their cash balance scheme, the illustrations now provided by Royal Mail reveal that a Section C member age 50 at 2018 with 30 years’ service, retiring at 65, will see their pension benefits reduced by 22.3%. The same member in Section B will see their benefits reduced by 19% while a Section C member age 30 at 2018 with ten years’ service, retiring at 65, will see their pension benefit cut by a staggering 51.6%. For those going into the DC scheme, the average losses will range from 20% for those retiring at 60 to 30% for those retiring at 65.

In line with our Four Pillars policy and campaign, the CWU are calling on Royal Mail to withdraw their proposals immediately and in accordance with the spirit and intent of our agreement to enter into serious, meaningful talks on pensions with the union around the introduction of our WinRS scheme to allow us to address all the outstanding issues between us and secure a settlement agreeable to both sides.

We equally believe that taking executive action would be a breach of the legally binding agreement on pensions and we will be seeking advice in this regard. Should that not be an option then we will be forced to consider acting on the union’s policy to ballot for industrial action consistent with our efforts to reach agreements on all aspects of our ‘Four Pillars of Security’ and pay claim.

Attached to this LTB is Bulletin 7 which sets out the union’s case for a wage in retirement scheme and the inadequacy of Royal Mail’s proposed alternatives.

Further updates will be provided in due course.

Any enquiries relating to this LTB should be addressed to the DGS(P) Department.

Yours sincerely

Terry Pullinger

Deputy General Secretary (Postal)

daveyeff · Post by **daveyeff** » 14 Jul 2017, 19:24

the only word that comes to mind is c***s

daveyeff · Post by **daveyeff** » 14 Jul 2017, 19:31

at least Dick Turpin had the decency to wear a mask.

Post by **Jack1960** » 14 Jul 2017, 19:40

No surprise that Unite, who represent managers, seem to be more positive about the proposal. Mind you they didn't have the dopey 4 pillars of security behind them.The CWU have been totally out manoeuvred on this one.

daveyeff · Post by **daveyeff** » 14 Jul 2017, 19:48

s**t and fan also come to mind.

spiderwoods · Post by **spiderwoods** » 15 Jul 2017, 06:37

grads132 · Post by **grads132** » 15 Jul 2017, 12:11

Ok why don't we as employees every one of us who are in the pension say right ok I want to freeze my pension come out of it altogether and I will spend my 120 a month elsewhere.
I have 20 years service but 30 years left to work it won't be worth s..t by the time I retire anyway.
So what would happen then.?
Any thoughts

Tman · Post by **Tman** » 15 Jul 2017, 12:34

Yep, you would have refused a lot of "free" money in RM contributions.
Nose, face, cut?

grads132 · Post by **grads132** » 15 Jul 2017, 13:26

How much free money are we talking?if they keep changing it just wandering if i am better investing in a very small property.
The pension plan is only going to get worse over time.
More ft people leave or retire replaced by pt meaning less goes in pot and people living longer taking more out of pot you dont have to be a mathematician to work it out.
Just thinking in regards to my previous post what can we do.
If we strike for pension and win 2 years down line it will be same again.i know they put money in aswell but it needs sorting

Post by **RobertT** » 15 Jul 2017, 14:31

grads132 wrote:Ok why don't we as employees every one of us who are in the pension say right ok I want to freeze my pension come out of it altogether and I will spend my 120 a month elsewhere.
I have 20 years service but 30 years left to work it won't be worth s..t by the time I retire anyway.
So what would happen then.?
Any thoughts

You would then have a deferred RM pension which would go up with inflation each year until you take it. Which is basically RM’s plans for our pensions anyway from April 2018, except we will also be building up a pot of money to fund our lump sum.

Nothing would happen to the money earmarked for paying out our pensions because, a) they’ll be no more money going in; and b) it’s invested in ‘safe’ places that are designed to increase by just as much as they need to keep pace with the pensions liabilities.

grads132 wrote:How much free money are we talking?if they keep changing it just wandering if i am better investing in a very small property.

Personally my weekly Section C payment is currently £21.70, but factoring tax relief and salary sacrifice(PSE) that is only actually costing me £14.75, as my income tax and NIC’s get reduced accordingly.
From next April RM are proposing to contribute 13.6% of my pensionable pay, which equates to £49.15 per week.
So that’s £70.85 going into my pension each week and it’s only costing me £14.75. Where else can you get a return like that?

The pension plan is only going to get worse over time.

It may well do, but why look a gift horse in the mouth now?

More ft people leave or retire replaced by pt meaning less goes in pot and people living longer taking more out of pot you dont have to be a mathematician to work it out.

The DB scheme is closing to future accruals in April, they’ll be no more going in from that point. It will be going towards our ‘cash balance’.

Just thinking in regards to my previous post what can we do.

Don’t cut your nose off to spite your face!

stevenshm · Post by **stevenshm** » 15 Jul 2017, 16:17

If they move the new pension to SPA won't the tax relief become irrelevant really?
thats if we do do get the state pension and it isn't means tested by then!
Also what if the government at the time removes the option of taking any
pension lump sum tax free? how might that affect the new cash proposal scheme?

I just have a few concerns with pensions in general really?

Post by **RobertT** » 15 Jul 2017, 17:24

stevenshm wrote:If they move the new pension to SPA won't the tax relief become irrelevant really?

To some degree yes, but it would depend on what your income is as to whether you would benefit from tax relief in retirement or not. Plus we still have the Personal Tax Allowance in retirement aswell as in work. So currently the first £11,500 of income is tax free.

We don’t yet know the specifics of the Cash Balance proposal, but it was the CWU’s WinRS idea that had an NRA of SPA.

thats if we do do get the state pension and it isn't means tested by then!

Considering the state pension has been increased in favour of the lower paid, I don’t think that’s going to happen anytime soon. They're more likely to increase SPA in my opinion.

Also what if the government at the time removes the option of taking any pension lump sum tax free? how might that affect the new cash proposal scheme?

Who knows? It could be that work based DB schemes are protected, or it could mean we have to pay tax.

I just have a few concerns with pensions in general really?

A lot of people do.

hans solo · Post by **hans solo** » 16 Jul 2017, 18:38

time for us to withdraw all revisions, lapsing and any other negotiations

Post by **TrueBlueTerrier** » 05 Sep 2017, 16:39

Jack1960 wrote:No surprise that Unite, who represent managers, seem to be more positive about the proposal. Mind you they didn't have the dopey 4 pillars of security behind them.The CWU have been totally out manoeuvred on this one.

https://www.royalmailchat.co.uk/communi ... 27&t=81119" onclick="window.open(this.href);return false;

Not that positive

6000 Members

28% responded and 51% rejected it.

Hardly a ringing endorsement, Looks like the 4 pillars got in the way.