LTB 349/16 - POST OFFICE: DEFINED BENEFIT PENSION (DB) SCHEME - UPDATE

[TrueBlueTerrier]

LTB 349/16 - POST OFFICE: DEFINED BENEFIT PENSION (DB) SCHEME - UPDATE

No. 349/2016

1st June 2016

POST OFFICE: DEFINED BENEFIT PENSION (DB) SCHEME - UPDATE

Dear Colleagues

Further to LTB 334/16 dated 26th May 2016, I am pleased to confirm that our submission to the Post Office Consultation in respect of their proposal to close the Defined Benefit scheme was sent to the Post Office yesterday. This document, which is known as “The Body of Evidence” was drawn up by our professional experts, First Actuarial, in conjunction and with input from myself.

I am pleased with the overall structure of the Body of Evidence document which is associated with this LTB for information and comment purposes. I believe our submission is both compelling in respect of the arguments put and powerful in its opposition to closing the DB scheme. Accordingly I wish to record my thanks and appreciation to Hilary Salt and her colleagues at First Actuarial for their efforts in this regard.

Also attached to this LTB is a letter to Neil Hayward, Group People Director, that accompanied our submission. This letter points to the fantastic consultative ballot result whereby 99.6% of our members voted to retain the DB scheme. The letter also highlights the fact the Union has determined its policies relating to this matter via the carriage of Emergency Motion E3 at this year’s Annual Conference. The most salient element of E3 in respect of pensions is reproduced below.

Pensions - the current attack by the Post Office on our members’ Defined Benefit scheme must be resisted by all means possible including Industrial Action. An agreement must be pursued to extend the life of the DB Scheme for the foreseeable future whilst continuing to use the healthy surplus to allow for accrual of benefits to build up whilst the surplus remains. Additionally agreement with the Post Office should be sought to significantly improve the current Defined Contribution scheme for existing members.

Branches are advised the Post Office have published the following timescales to our members in respect of what happens next.

July 2016 – The Post Office will at some point announce the outcome of the consultation.

31st August 2016 – If the Post Office decides to go ahead and close the scheme at this point, our members would stop building up benefits in the DB scheme and become a deferred member.

1st September 2016 – should the Post Office decide to close the DB scheme despite our strong opposition, our members would begin building up benefits in a new Defined Contribution plan.

It is important to stress in the event the Post Office ignores the overwhelming views of our members to retain the DB scheme and press ahead and seek Trustee support for their position to close the scheme, then we will be left with no option other than to ballot our members for industrial action in line with our policy as contained in Emergency Motion E3. It can only be hoped that our Body of Evidence submission will make the Post Office think again and they will decide to retain the DB scheme for the foreseeable future. This approach is fundamental due to the significant number of job losses that our members are facing across the Post Office. In essence all of our members who face an uncertain future need continuity and stability of their pension scheme and this particularly applies to the considerable number of members who are either approaching or are in the 55 – 60 age bracket.

I am pleased to be able to also report full support from Brian Scott, Unite, who has approximately 23% of the DB scheme membership. Unite has adopted a similar approach to us in opposing the closing of the DB scheme. Indeed, Brian at all of the so called “consultative” meetings has been exceptionally strong in his criticism of the Post Office regarding this important matter that also impacts so detrimentally on his members as well. For your information, please see the attached letter from Brian Scott to Neil Hayward, Post Office Group People Director. This letter and the analysis contained therein essentially compliments our Body of Evidence.

By the same token there are approximately 11% of DB scheme members who are Senior Managers (not represented by Unite). The representatives of the Senior Managers group have also been critical of the decision to close the DB scheme. To this end attached is an email from Sue Harding on behalf of the Senior Managers to Neil Hayward, Group People Director. It should be noted that the Senior Managers group is also calling for the date of implementing the closure of the scheme to be deferred not least due to the impact that redundancies will have on the financial numbers.

So it can be seen from the above that two trade unions and one representative group that make up the entire membership of the DB scheme are opposed to its closure. Indeed the only people who want to close the scheme are directors of the Post Office.

Further developments will be reported.

If you have any questions in relation to this LTB, please contact lsheridan@cwu.org

Yours sincerely



Andy Furey

Assistant Secretary

[TrueBlueTerrier]

Attachment 4 is a MSG file which I can't open and can't post - members will need to visist CWu site if they wish to see attachment. You'll need a MSG reader.