PENSIONS UPDATE

[lovejoy]

Dear Colleague

Pensions / Government Review of Competition

The Union remains determined to reverse Royal Mail’s pension reforms and win concessions from government that will provide a better regulatory and financial framework and ensure a successful future for CWU members and the company.

The purpose of this LTB is to provide Branches with an update on our campaign and report on recent developments.

This week a meeting took place with all Senior Field Officials in order to receive valuable feedback on how we can strengthen the campaign. Following this the Postal Executive met and took a number of decisions to intensify our campaigning activities.

Phase 1 of the Campaign - Week Commencing 5th May Through to Week Commencing 19th May

This involves a series of communications to all MP’s, influential political bodies, CWU representatives and members. These communications are designed to raise awareness - explain why government and Royal Mail policies have failed and the impact this is having on our members’ pensions - also what needs to be done to achieve the right solution.

In order to maximise impact these communications will be delivered to a strict timetable. This will also involve co-ordinated Branch activities, the details of which will be cascaded thorough our Senior Field Officials.

The Postal Executive has also agreed to set up Regional Steering Groups along similar lines to those that operated during last year’s successful industrial action campaign. These Regional Steering Groups will hold their initial meetings over the next two weeks. Flowing from these further co-ordinated activities will take place and Branches will be advised of their role in due course.

Letter from the Chair of the Pensions Trustee Board

We are aware all members received a direct communication from the Trustees of the Pension Scheme. The Union did take legal advice on the Trustee’s position and met the Chair of the Trustees prior to the decision being made. We also wrote to the Trustees setting out the Union’s position. A copy of this letter is attached.



Working together with Unite

In line with the policy adopted by the Postal Executive the Union continues to work closely with Unite, where this will have a positive impact on pensions and the Government Review.

Annual Conference

The Postal Executive has also agreed to set aside time at Annual Conference to further maximise our campaign.

Next Steps

The Postal Executive will meet again on the 7th May to consider Phase 2 of the campaign.

Further information will be sent out in due course. Branches will be advised separately on their role in carrying out the Campaign activities that have been agreed under Phase 1.

Any enquiries on political issues should be addressed to the GS Department. Any enquiries on industrial issues should be addressed to the DGS (P)’s Department.

Yours sincerely


Billy Hayes Dave Ward
General Secretary Deputy General Secretary (P)




Letter to Jane Newell Chairman Royal Mail Pensions Trustees LTD -dated 27th March 2007



Dear Jane,

Royal Mail Pension Arrangements

Prior to the Trustees making their decisions on Royal Mail’s proposed pension reform we want to set out the position of CWU on key aspects of the pension’s debate.

1. The Pension Consultation Joint Statement

The Union’s Postal Executive committee did agree a joint statement with Royal Mail supporting the need for pension reform as part of the consultation process.

From the outset we have been clear and consistent with Royal Mail and CWU members that the joint statement was agreed on the following basis:

• The consultation joint statement did not constitute an agreement to the final outcome.

• CWU wanted an informed debate and would undertake regional and branch seminars / meetings.

• We would listen and act on the views expressed during the consultation.

• At the end of the consultation and following further discussions with the company we would carry out our commitment to ballot CWU members on the final position.

• Pensions was decoupled from the pay and modernisation agreement. A letter from Brendon Barber (TUC General Secretary) was the mechanism that allowed decoupling to take place. Royal Mail agreed CWU members would be balloted separately on the pay and modernisation agreement.

Royal Mail know the afore-mentioned is the factual position.

2. The Pension Consultation

In work time briefs letters and DVD’s Royal Mail told its employees the following:

• The consultation proposal did not represent the final outcome.

• The company were committed to ensuring the consultation was meaningful.

• The company would take into account the views of its employees before reaching the final decision.

The CWU wrote to Royal Mail on the 20th December 2007 setting out the reasons why we did not believe the company were carrying out a meaningful consultation. We also put the same views forward at meetings of the formal consultation group and in separate meetings with Royal Mail.

The Trustees will have seen the results of the consultation exercise. CWU believe these demonstrate the company have not carried out any of the commitments made to its employees. Royal Mail have treated the consultation exercise as a total sham.

3. The Reasons why CWU cannot support the Company’s Pension Reforms

• The Union continues to recognise there is a need for some kind of pension reform. However, we are convinced there are alternative and more acceptable ways of introducing such reforms.

Since Christmas the Union has discussed a range of potential solutions and alternative approaches. These options have been formulated following independent advice from our pension advisors, First Actuarial. They have also been formulated in conjunction with views expressed during the consultation. Regretfully, Royal Mail have failed to consider any of these alternatives even though they reflect many of the views expressed during the consultation.

• The announcement of the government review of competition is a crucial development.

Royal Mail consistently state that pension reform is being driven by the economic and competitive pressures facing the company.

The government review provides Royal Mail and CWU with a fresh and significant opportunity to finally get to grips with the core of the problem.

The truth is unless Royal Mail gain major concessions from government in both its regulatory and financial framework – the pressures facing the company will continue unabated. This means CWU members will face further pension reform in the near future.

The company and the Trustees must prioritise the future financial strength of the company if we are truly acting in the best interests of all pension scheme members.

The government review is due to conclude mid-summer 2008. There really is no need for the company or the trustees to act with undue haste. Decisions on pension reform should only be taken when the government review has been concluded.

• During the consultation it has come to light that the company’s business plan is falling further behind the financial targets set. This in turn is linked to the government investment package.

In our view the priority should be to ensure the company has a viable business plan going forward. The facts demonstrate otherwise. The business plan is fundamentally flawed and based on incorrect assumptions. This means the government investment package is completely inadequate.

The very same government package and business plan was originally heralded by the Chief Executive as the vehicle for ensuring the company could maintain a final salary scheme for existing employees. The Chief Executive wrote to all employees last year making that commitment. The company clearly got it wrong.

The correct course of action now is for Royal Mail to be honest about their mistakes and call upon government to review the investment package.

• The CWU believe that the government, as the owner and share-holder of Royal Mail, have a legal and moral obligation to protect CWU member’s pensions arrangements.

When government announced the investment package and the Escrow account it presented itself to the media as saving the pension arrangement of Royal Mail employees. It is now incumbent upon all stake holders to tackle these issues again directly with government and also through the review team. This should include the scrapping of the ill conceived ColleagueShare scheme in favour of releasing more funds to protect pensions.

• Royal Mail’s approach to the consultation exercise is unacceptable to the Union. The company should have explored alternatives and listened to the views of its employees. By contrast, the Union has listened and acted on the views expressed. Furthermore, we are currently in the process of undertaking an individual member work place consultative ballot. Early results indicate CWU members will overwhelmingly reject the company’s reforms. The full result will be declared on the 31st March.

• The Union cannot support the introduction of inferior two-tier arrangements for new entrants.

• The Union is concerned that the assumptions underpinning the last actuarial evaluation are too cautious. We believe these need to be urgently reviewed.

Summary

The Union does recognise the Trustee Board acts independently of Royal Mail and we are grateful for the opportunity to submit our views.

We remain convinced there are alternative and more acceptable ways of reaching agreement with the Union on pension reform.

We believe it is now incumbent upon the company and the trustees to take a step back and consider pensions in conjunction with the bigger picture.

There is an overall responsibility on Royal Mail and the Trustees to explore all avenues to ensure pensions are protected. In light of the points we have raised we respectfully ask the Trustee Board to reject the company’s plans.

Yours sincerely,



Billy Hayes Dave Ward
General Secretary Deputy General Secretary (P)

[johnnyp]

Moved to pensions forum

[BELIAL]

And since the so called pensions deficit is a legitimate business cost incurred by what has proved to be obviously flawed legislation,ie the fund is no longer capable of fulfilling it's legal contractual obligation. Then surely the government must announce a tax payment holiday until such times as all shortfalls are restored. No other UK company gets taxed on it's losses

[Mr. Auburger]

During the strike we had RM by the balls !

Then the CWU decided to de-couple the pension.

Now we're paying the price


I havn't heard anyone in my office willing to go on strike again because of the pension

The cwu got it wrong....

Just look at the GRANGEMOUTH oil workers...........They at least have the balls to go through with there strike threat

Do you think that they wil end up with an inferiour pension ?

[BELIAL]

Keep up the fight Mr A ,some people would be very happy if we rolled over

[Tman]

And since the so called pensions deficit is a legitimate business cost incurred by what has proved to be obviously flawed legislation,ie the fund is no longer capable of fulfilling it's legal contractual obligation.

That obligation is to pay a pension to it's members. Explain how it's no longer capable of doing that?

Then surely the government must announce a tax payment holiday until such times as all shortfalls are restored. No other UK company gets taxed on it's losses

Crap. Any company posting a loss at the end of the financial year is still liable for tax.
Those old canteen accountants again........

[DGP1]

And since the so called pensions deficit is a legitimate business cost incurred by what has proved to be obviously flawed legislation,ie the fund is no longer capable of fulfilling it's legal contractual obligation.

That obligation is to pay a pension to it's members. Explain how it's no longer capable of doing that?

Then surely the government must announce a tax payment holiday until such times as all shortfalls are restored. No other UK company gets taxed on it's losses

Crap. Any company posting a loss at the end of the financial year is still liable for tax.
Those old canteen accountants again........

I'm sorry!!! I'm gonna go back to my accountancy teachers and demand my money back and I'm sure the Inland Revenue are going to be over the moon about that because they can now charge every business that has ever posted a loss big chunks of tax (Sky must be crapping themselves).

[Tman]

I'm sorry!!! I'm gonna go back to my accountancy teachers and demand my money back and I'm sure the Inland Revenue are going to be over the moon about that because they can now charge every business that has ever posted a loss big chunks of tax (Sky must be crapping themselves

Maybe you should.
How about a football club who find they're, say, £10,000,000 in profit at the year's end, so go out and buy another player for £10,000,000, or the many clubs who post a loss of many millions at the year's end.
You reckon the IR go "that's OK boys, we're square, you owe us nothing"?
Yeah right.
Or why don't you phone up IR and say, "sorry and all that, but I've spent all this years wages, I have no savings, and actually I'm in debt for my new car,so I'm not liable for tax this year."
Just might work, eh?

[axeman]

Does that count for leeds untd as well , heard a little story that chairman al left them with a little - in the bank balance


And tea man thats why you have a financial year profit before and after savy ?

[DGP1]

I'm sorry!!! I'm gonna go back to my accountancy teachers and demand my money back and I'm sure the Inland Revenue are going to be over the moon about that because they can now charge every business that has ever posted a loss big chunks of tax (Sky must be crapping themselves

Maybe you should.
How about a football club who find they're, say, £10,000,000 in profit at the year's end, so go out and buy another player for £10,000,000, or the many clubs who post a loss of many millions at the year's end.
You reckon the IR go "that's OK boys, we're square, you owe us nothing"?
Yeah right.
Or why don't you phone up IR and say, "sorry and all that, but I've spent all this years wages, I have no savings, and actually I'm in debt for my new car,so I'm not liable for tax this year."
Just might work, eh?

What rubbish are you talking about?? I've dealt with the Inland Revenue and at no time did they tell me that any business that made a loss would have to pay tax. You just don't have a clue what you're talking about - A football club that posts a profit of £10,000,000 at the year end would have to pay tax the tax due on that, only if they bought a player before the year end would they be able to claim it as an expense and therefore reduce/remove their lax liability.
And you're confusing corporate tax with personal tax, they are two totally different things (any first year accountancy student would know that).

You really don't know what you're talking about and (as you're so keen to point out to everyone else) should keep quiet on things you know nothing about.

[dvbuk55]

Disgruntled is absolutely correct - personal tax and capital gains tax and company liability for tax are totally different - he will also tell you that there is a deferment on payment for companies. Why do companies employ accountants? - not for the day to day accounting that is for sure - it is so they can make the most of the loopholes and make sure that depreciation costs, research and investment costs are offset against their liability - accountants are really tea leaves in another guise - stealing from the government so you and I have a bigger share of the burden under PAYE.

[Tman]

[What rubbish are you talking about?? I've dealt with the Inland Revenue and at no time did they tell me that any business that made a loss would have to pay tax.

Right, on personal terms with the IR now?

You just don't have a clue what you're talking about - A football club that posts a profit of £10,000,000 at the year end would have to pay tax the tax due on that, only if they bought a player before the year end would they be able to claim it as an expense and therefore reduce/remove their lax liability.

OK, so a company can negate it's tax liability by purchasing a capital asset? BS!
So how about AFC Bournemouth? Been loss-making for years, and now driven to the verge of extinction by a huge IR demand.....funny that.

And you're confusing corporate tax with personal tax, they are two totally different things (any first year accountancy student would know that).

It was an illustration to prove my point, not any sort of connection, but surely you realised that? BTW any first year accountancy student would know it's actually "Corporation Tax"

You really don't know what you're talking about and (as you're so keen to point out to everyone else) should keep quiet on things you know nothing about.

[/quote]
Seems I'm not alone then eh? Did you fail and that's why you're now a postie?

[dvbuk55]

BUT to get back to the real issue of the pension - there was such a hue and cry over the theft of our pension and how we were going to hit the streets and what a campaign we were going to stage and today you have had the ultimate insult. They aren't going to do anything but talk - talk to whoever will listen and by all accounts that is nobody who matters - and the timescale? - well there is special time set aside during the conference for discussion and that's in Mid June is it - that's weeks after the event. I forget who once coined the phrase "chattering classes" but these clowns are certainly amongst their ranks.

[DGP1]

Quote:
[What rubbish are you talking about?? I've dealt with the Inland Revenue and at no time did they tell me that any business that made a loss would have to pay tax.

Right, on personal terms with the IR now?

No, not on personal terms but I've had to deal with them on tax issues and whenever I've talked to them they've never come to me and told me to pay tax whenever I've made a loss.

Quote:
You just don't have a clue what you're talking about - A football club that posts a profit of £10,000,000 at the year end would have to pay tax the tax due on that, only if they bought a player before the year end would they be able to claim it as an expense and therefore reduce/remove their lax liability.


OK, so a company can negate it's tax liability by purchasing a capital asset? BS!
So how about AFC Bournemouth? Been loss-making for years, and now driven to the verge of extinction by a huge IR demand.....funny that.

I would need to see why the tax man is going after them but it's probably to do with PAYE not corporation tax (it could also be a VAT problem).

Quote:
And you're confusing corporate tax with personal tax, they are two totally different things (any first year accountancy student would know that).



It was an illustration to prove my point, not any sort of connection, but surely you realised that? BTW any first year accountancy student would know it's actually "Corporation Tax"

I was trying to keep it simple so that you'd understand it and why use it make a point if it's not the same thing.

Quote:
You really don't know what you're talking about and (as you're so keen to point out to everyone else) should keep quiet on things you know nothing about.

Seems I'm not alone then eh? Did you fail and that's why you're now a postie?[/quote]

I never said I was a trained accountant only that I had accountancy training, I suppose I could always take the finals and go into accountancy but it is so boring I'd rather not.

[Tman]

BUT to get back to the real issue of the pension - there was such a hue and cry over the theft of our pension and how we were going to hit the streets and what a campaign we were going to stage and today you have had the ultimate insult. They aren't going to do anything but talk - talk to whoever will listen and by all accounts that is nobody who matters - and the timescale? - well there is special time set aside during the conference for discussion and that's in Mid June is it - that's weeks after the event. I forget who once coined the phrase "chattering classes" but these clowns are certainly amongst their ranks.

Unfortunately, that's it in a nutshell.
There's no appetite for a fight so soon after the last lot of IA, there's no reason to fight the decision in any legal sense, and the CWU do not wish to fight an unwinnable fight leaving themselves even weaker than they currently are. Plus, of course, these would be absolutely no sympathy from the general public who may themselves have a worse pension deal than we do.

"Chattering classes" was coined by Julie Burchill to describe those who say the same as the last person they spoke to, without thinking whether it was true/accurate/nonsense, which is quite appropriate for a few on here it seems.