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EVR - VR the differences

Royal Mail pension news and discussion.Please note the advise given in this forum is unofficial, please use the links we have for a more detailed response or see an independent financial adviser.
presario
Posts: 13
Joined: 23 Mar 2011, 12:38
Gender: Male

EVR - VR the differences

Post by presario »

Firstly I apologise if this is not the right place to post this, but here goes.
In April our DOM was after two jobs from our professional driving duties as part of a savings package he was working on, we were asked to come up with ideas as to how best to achieve what he wanted while making our duties more robust. In the end after a lot of messing about the word EVR came out and the offer was that if we put the changes in place he would get two people an EVR agreement so they could leave, all were asked and names out forward including my own as one of the duties going was mine and having done 39 years I thought it would be worth a look. Unfortunately our unit rep let things slip the changes went ahead long before any EVR offers had surfaced and have been running since, leaving me as a floating cover all.

In the time since that we (all of us who expressed an interest) have been called in on numerous occasions to be "kept in the loop" as the manager still insisted they would go ahead, at one point he actually gave me some figures from a calculator on his laptop which he said he could not print but would be willing to write down for me to consider, this he did on some scrap, this offered me 3 options :- a high pension figure and a low lump sum. a mid pension figure and a larger lump sum and finally a lower pension and a large (max) lump sum all of which would be slightly enhanced and in addition to the sum I was being offered to leave which constituted 6 months pay (I am 56 ). This interested me, but he seemed to want me to commit based on those figures alone which I said I was not prepared to do and would wait until an official offer came through. This has bumped along since, we even got told by him that he had been informed by HR that his requests for EVR were illegal, that without any explanation to us as to why? Anyway we had given up all hope and were at the point of stringing our rep and suggesting he raise the issue of returning to the previous state as the DOM had not come through on his side of the deal.

Out of the blue this week we were all told (all of us waiting) that offers would be coming in the next few days, first to receive his was a night man who is in his last 15 months before he is 65 and he states his offer was exactly what he was shown 2 years pay. A done deal as far as he was concerned (a no brainer to be fair) mine arrived yesterday, I read it once then again and was baffled the only option offered was a sum to go (6 months pay) and the higher pension and small lump sum, none of the other options were mentioned, I wrote it off in my head immediately and put it to one side. Later on I read it again and it was only then it hit me the offer was was worded for Voluntary Redundancy and not Voluntary Retirement now I have not seen any of these offers before but would assume if it was Early Voluntary Retirement it would be worded as such and would not include the word REDUNDANCY.

I am going to approach the DOM tomorrow Monday with the rep present, just to put my point over but would be grateful if anyone can shed a little light on this and confirm that what I was offered initially was in line with an EVR offer and what I have before me at home is what constitutes a VR offer or am I loosing it or have I missed something in the passing months since we first registered our interest ...... :oops:
This is the Night Mail crossing the border Bringing the cheque and the postal order. them were the days :-/
cyclemech1
EX ROYAL MAIL
Posts: 334
Joined: 20 Jul 2009, 20:46
Gender: Male

Re: EVR - VR the differences

Post by cyclemech1 »

I know where you are coming from, the same thing happened to me.

I'm 57 with 14 years service and when I first received the EVR offer I almost dismissed it out of hand. Boy am I glad I didn't!

I was offered. like you, around six months pay as compensation plus an enhanced pension which will be payable immediately after my last day of service.

However, if you accept the offer, you will receive a letter from the pensions centre giving you 3 options;

1) The annual pension in full with no lump sums;

2) The annual pension reduced but with the maximum lump sums;

3) The annual pension with lump sums of your choosing up to the maximum lump sums (ie less reduced pension and lower lump sums.

Therefore you receive the compensation payment plus the lump sums from your pension and still enjoy an enhanced pension until you go to that big delivery office in the sky! :nana

Hope this helps and good luck!
MinisterofCucumber
Posts: 806
Joined: 15 Dec 2009, 22:18
Gender: Male

Re: EVR - VR the differences

Post by MinisterofCucumber »

"MTSF Amended Terms
The approach to change will continue to be in line with the Managing the Surplus Framework Agreement as amended below for Royal Mail Letters.
Royal Mail and the CWU recognise the need to amend the current MTSF arrangements for CWU represented grades across Royal Mail Group to:
Deal with the statutory change to the Minimum Pension Age and the change in the retirement age in the Royal Mail Pension Plan (RMPP);
Maximise the number of volunteers for redundancy with a suitable package for all age groups; and
Best support redeployment during the transformation period over the three years beginning from April 2010,
Both Royal Mail and CWU have agreed to phased changes as they are aware that some employees will have certain expectations based on the arrangements that were in place prior to 1 April 2010. Phase 1: a 6 month interim arrangement followed by Phase 2 from 1 October 2010.
Phase 1: Voluntary Redundancy with last day of service 1 April 2010 – 30 September 2010
Existing MtSF arrangements will remain in place for all employees, except for 50-54 year old RMPP qualifying members where the statutory change in the Minimum Pension Age means that they will only receive compensation based on aggregate service subject to a minimum of 6 months and a maximum of two years’ pay, calculated as follows:
• 0.5 weeks’ Pay for each full year of service where age during year less than 22
• 1 weeks’ Pay for each full year of service where age during year is 22 or above, but less than 41
• 1.5 weeks’ Pay for each full year of service where age during year is 41+ and multiplied by 3.75.
This interim arrangement applies to redundancies, applying the criteria in Appendix 5 in MtSF, where the employee has a last day of service of 30th September 2010 or earlier. Exceptionally these terms will also be available for employees offered Voluntary Redundancy in a site closure where most of the redundancies in relation to that site closure take effect before 30th September 2010.
Phase 2: Voluntary Redundancy with last date of service from 1 October 2010
The following provisions will apply from 1 October 2010.
As for Phase 1, except that
Qualifying members aged 55 – 64 will receive a pension enhancement by way of service credit of 37.5% of their prospective service up to NRA (65), subject to the RMPP Trust Deed & Rules, and cash compensation of 26 weeks’ pay or a statutory redundancy payment, whichever is the greater.
The current age based selection criterion for voluntary redundancy will cease from 1 October 2010, but the other current selection criteria, including seniority, will remain unchanged.
Total cost of compensation (including pensions) will be limited to two times annual pay (as per the definition in MtSF) for all employees. If the total cost of compensation including pensions exceeds the above limit, cash compensation equivalent to two years’ annual pay will be paid. This limit on total cost of compensation will be suspended for the life of this agreement and will be deployed from 1 April 2013.
If a redundancy exercise at a site means that employees offered voluntary redundancy are released on dates straddling a change in terms, all such employees will receive terms applicable at the beginning of the exercise.
Pay Protection
Royal Mail confirms that where in MtSF pensionable allowances are protected, these allowances will be protected regardless of whether the employee is a member of the Royal Mail Pension Plan.
Review
Royal Mail and CWU will jointly review these elements of the agreement (VR and ETE) in October 2012 in the light of the financial position of the company and the progress of the transformation programme."

http://www.cwunorthern.co.uk/nationalagreements.htm" onclick="window.open(this.href);return false;
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baldrick
EX ROYAL MAIL
Posts: 5038
Joined: 13 Sep 2007, 23:37
Gender: Male

Re: EVR - VR the differences

Post by baldrick »

EVR (Early Vouluntary Retirement) would mean you are taking your accrued pension (slightly enhanced by 37.5% of remaining years to 65) plus lump sum of 3x Annual Pension plus Redundancy Compensation payment of 26 weeks pay.

When you take your pension you can decide whether you want to convert some of your pension into a bigger lump sum, or alternatively convert some of your lump sum into a bigger pension.

VR (Voluntary Redundancy) is where you get only a lump sum based on age and length of service. You would get this if you are under 55 or you are already drawing all your accrued pension.

So if you are being offered your pension, lump sum, and redundancy compensation payment, you are being offered Early Voluntary Retirement.
As cyclemech has said you should then be offered the options of bigger or smaller pension/lump sum.
vanman
Posts: 89
Joined: 21 May 2007, 09:12
Location: East Mids

Re: EVR - VR the differences

Post by vanman »

baldrick wrote:
So if you are being offered your pension, lump sum, and redundancy compensation payment, you are being offered Early Voluntary Retirement.
To be clear about this - it is not early retirement - this is still Voluntary redundancy.

The terms may differ from those aged under 55 - but it is still redundancy
presario
Posts: 13
Joined: 23 Mar 2011, 12:38
Gender: Male

Re: EVR - VR the differences

Post by presario »

Thank you all for your responses, I have spoken to my DOM this morning, have to say his attitude stinks seemed to take my questioning of the wording of my offer personally, basically he stated after a brief exchange "I won't be miffed if you take the offer or not, I don't actually care" I responded by saying "exactly" and walked away .. also went on to say later that the redundancy and retirement offers were the same, I just bit my lip

anyway as Baldrick states So if you are being offered your pension, lump sum, and redundancy compensation payment, you are being offered Early Voluntary Retirement. As cyclemech has said you should then be offered the options of bigger or smaller pension/lump sum.

my offer does give me my pension, a lump sum and a 6 month compensation payment, but to get to the point of being offered the other options ( bigger or smaller pension/lump sum) it means I have to accept the offer as is and hope the figures match what I was given by the DOM on his laptop, because the way the offer is worded once I accept it it a done deal no way back, I was perhaps naively expecting the options to be in the offer and give me the choice then to decide which way I would go and ultimately if I was going to accept it which is what I thought was how EVR (retirement) was done, seeing the word redundancy sent shivers up my back, end of today I spoke to HR and on their advise gave the papers back to my DOM unsigned and asked him to clarify the situation with the leavers team and obtain an explanation why it was presented the way it was as redundancy rather than retirement (guess you guys have answered that already) ....anyway see what transpires
This is the Night Mail crossing the border Bringing the cheque and the postal order. them were the days :-/
baldrick
EX ROYAL MAIL
Posts: 5038
Joined: 13 Sep 2007, 23:37
Gender: Male

Re: EVR - VR the differences

Post by baldrick »

vanman wrote:
baldrick wrote:
So if you are being offered your pension, lump sum, and redundancy compensation payment, you are being offered Early Voluntary Retirement.
To be clear about this - it is not early retirement - this is still Voluntary redundancy.
The terms may differ from those aged under 55 - but it is still redundancy
Yes you are right. That it is how it is described in the MTSF Agreement quoted by MoC above.
But what most of us understand by EVR is Early Voluntary Retirement. Voluntary Redundancy would not presumably be 'Early'.
I know this might seem a bit tautological (is that the right word?). But the OP was asking whether he was being offered EVR or VR.
Probably doesn't matter as it amounts to the same thing for him.
presario
Posts: 13
Joined: 23 Mar 2011, 12:38
Gender: Male

Re: EVR - VR the differences

Post by presario »

Just an update and in a way closing my post , having spoken to HR and the pension section and again speaking to my DOM I have decided at this point not to take the offer, the options given me by the DOM were close to what I would have got (slightly more to be fair) but on crunching the numbers and talking it through with her indoors it soon became clear it was not quite the right time to call it a day. :d'oh! I have also to have in mind that as the business moves forward and knowing my office and how things might pan out there it's likely this will come around again at a time better suited to me both financially and for piece of mind in my retirement.

Thanks once again to all who answered and contributed ....
This is the Night Mail crossing the border Bringing the cheque and the postal order. them were the days :-/