WINRS - CW PROPOSAL

[11aaa222]

Just a quick thought, I am very concerned regarding the pensions dispute as none of us really want a strike. I feel Royal Mail have offered a decent proposal and the proposal compare favorably to other schemes out there in the real world we cannon sustain a defined benefit scheme for 100k + employees, we all want to see a successful royal mail and we need to take some responsibility for our own retirement planning be it contributing to AVC's or a private pension alongside the company pension, the company in its current state I feel is making the best offer possible as compared to the previous proposal and sheme offered by Royal Mail.

What I do not understand however is that if the CWU say that there all singing all dancing WINRS proposal will not cost the company any extra money above and beyond what they want to pay and if it is so great why are Royal Mail not keen on the cwu proposal ? surely it must have some bad points or surely Roayl Mail would not be rejecting it as all this is causing some much uncertainty in the company and the potential cloud of strikes looming does not reflect well on the company......

[FAB]

Until RM actually tells us how their new all singing and dancing DB cash pension works it is impossible to compare it to the union one. At least the CWU have given far more details on their scheme? With the RM one all they guarante you is a lump sum when you retire. Not how much it might be or how it actually grows! I am puzzled that if RM are now getting jittery over a possible strike they have not been giving out far more information. Unless they know that once they do it will harden any strike decision!

[11aaa222]

Until RM actually tells us how their new all singing and dancing DB cash pension works it is impossible to compare it to the union one. At least the CWU have given far more details on their scheme? With the RM one all they guarante you is a lump sum when you retire. Not how much it might be or how it actually grows! I am puzzled that if RM are now getting jittery over a possible strike they have not been giving out far more information. Unless they know that once they do it will harden any strike decision!

in response to you;

1. I did not say anything about the DB cash pension, this is I believe a fallacy (there is no such thing as "DB cash, you can call this anything you like but I belive it is a DC scheme in essence), I am talking more about there DC scheme which compares favorable to others out there in industry
2. "With the RM one all they guarante you is a lump sum when you retire" , the is the whole point of closing the DB scheme, if they guarntee lump sum it is at least something as no other DC scheme gives you any guarantees what so ever, (RM can call it DB cash, but all it is really is a DC sheme with guaranteed lump sum, this is a good thing not bad in reality! as they really should not be guaranteeing you anything in this day and age!)
3. "Not how much it might be or how it actually grows", everything is based on forecasts etc, even the union Winrs scheme, CWU scheme which in actual fact is more risky as you pension pot is at the mercy of stock market

[fishtank]

The reason the company does not want to develop the WINRS proposal is risk, as the DB pension stands the majority of the risk is with the employer, with the CWU scheme the risk is shared, the new cash balance scheme and the existing DC scheme transfers the majority of the risk to the employee.

It's not really about cost, most of the extra cost cited by RM in maintaining the DB scheme are hypothetical based on pretty much zero fund growth. The real aim is to de- risk the pension fund making us a far more attractive ( to investors ) company and driving up the share value.

[jab0510]

The pension proposal seems fair to me. All i want is a pay rise that keeps pace with inflation! As for the rest you have a start time and a finish time just do the work then go home.

[fishtank]

The pension proposal seems fair to me. All i want is a pay rise that keeps pace with inflation! As for the rest you have a start time and a finish time just do the work then go home.

You could argue that the pension proposal is necessary or that it's a manifestation of the times we live in but it's hard to comprehend any argument that it's "fair" to reduce deferred earnings by as much as 30%. Perhaps you don't really understand the proposal? There's no shame in that. Royal Mail have done their best to confuse and confound and have in my opinion deliberately left staff in the dark over the true impact of the changes. For that alone they should be ashamed and personally I'm pretty disgusted by their behaviour.

[jetblack]

1...the DB cash pension, this is I believe a fallacy (there is no such thing as "DB cash, you can call this anything you like but I belive it is a DC scheme in essence)

Yep - agreed. Trying to call it a Defined Benefit scheme is a little disingenuous.

2.. if they guarntee lump sum it is at least something as no other DC scheme gives you any guarantees what so ever

...and I can guarantee you something - it will be a poor payer. We don't as yet seem to have any details of how the payout will be calculated/arrived at.
I personally would prefer to take my chances and make my own investment decisions than have RM giving me a derisory guaranteed payout. They wouldn't guarantee it in the first place if it were to be a competitive return. It will be a return based on de-risking - a dead cert. Shite in other words. The investment managers make 10% on our billions - we get 1.5% sort of a setup.

3. "Not how much it might be or how it actually grows", everything is based on forecasts etc, even the union Winrs scheme, CWU scheme which in actual fact is more risky as you pension pot is at the mercy of stock market

Just to be clear - there is no suggestion at all that the WinRS plan would be 100% invested in stocks - far from it. Rather, it proposes to have an approach towards growing our investments more in line with what we have had traditionally re. the balance between stocks and gilts/bonds. Search posts on the pensions sections and you will find some stuff that RobertT (and myself to some extent) has posted on this topic. There will be all sorts of complicated hedging going on as well.

One thing more - the CWU scheme would be for all employees - which would be a significant gain for those in the current savings (+employer deferred pay contribution) DC scheme.
We should never have allowed the workforce to be divided in the way it is currently in the first place regarding pension provision. Suits RMG - not us so much.

[Phantom]

The reason the company does not want to develop the WINRS proposal is risk, as the DB pension stands the majority of the risk is with the employer, with the CWU scheme the risk is shared, the new cash balance scheme and the existing DC scheme transfers the majority of the risk to the employee.

It's not really about cost, most of the extra cost cited by RM in maintaining the DB scheme are hypothetical based on pretty much zero fund growth. The real aim is to de- risk the pension fund making us a far more attractive ( to investors ) company and driving up the share value.

Spot on! and yes it is all about de-risking the company - many other companies were watching and running scared because if Royal Mail accepted the Union's proposals then other Unions would want the same and that's why they were all advised not to accept it. All the boards of all different companies who know each other were terrified of the WINRS proposal as it would bring "risk" back to the company and shareholders wouldn't want that.

Everything that is done now is for Shareholders and Share growth and absolutely nothing else.