Royal Mail Union Threatens Strike to Protect Pension Plan

[RobertT]

Our pension(RMSPS) up to April 2012 is now the governments responsibility and as such is a Public Sector scheme. There is no current ability for them to offer an incentive to transfer it or for a member to transfer out themselves. Infact in 2015 they specifically said transfers from public sector schemes won’t be allowed. And it would probably be a bad decision to do so anyway. Most previous employees are going to fit into this category.

Our pension(RMPP) post 2012 is RM’s responsibility and is a Private Sector scheme. In theory they could offer some kind of payment to transfer it or you could transfer it yourself, but again it would almost certainly be a bad move.

Defined Benefit pensions, which the RMSPS and the RMPP are, offer guaranteed index linked income for life and as such, generally speaking, should never be transferred however small.

Defined Contribution schemes are pots of money with generally no guarantees whatsoever. Amalgamating several small pots is quite often a good idea, to put everything in the same place if nothing else. But ultimately it’s where the money is invested that matters.
Some older DC plans might have ‘guaranteed annuity rates’ which are very valuable and you would lose that guarantee if you transferred.

[GRS]

This company pension scheme (and not just at RM as lots of others trying the same thing) reminds me of the endowment mortgage scam back in the 80's when people were told that by entering into one of these you would have not only enough saved up to pay off your mortgage at the end of the term but also a bit extra left as a savings plan. Certainly something wrong when people are paying in to a scheme and getting a yearly update telling them how much they will have in their pension hence they then start planning their futures only to be constantly told 'actually that all means jack s**t as we're moving the goalposts'. As I say not just a RM thing but something that's obviously being driven by greedy shareholders and financiers and seriously needs looking at. Surprised that collective unions aren't all over this and putting it out to the public to ramp up pressure on government to look into it. Company pensions are looking more and more like the latest financial scam where the little man loses out to the greedy vultures.

[heapsy]

This company pension scheme (and not just at RM as lots of others trying the same thing) reminds me of the endowment mortgage scam back in the 80's when people were told that by entering into one of these you would have not only enough saved up to pay off your mortgage at the end of the term but also a bit extra left as a savings plan. Certainly something wrong when people are paying in to a scheme and getting a yearly update telling them how much they will have in their pension hence they then start planning their futures only to be constantly told 'actually that all means jack s**t as we're moving the goalposts'. As I say not just a RM thing but something that's obviously being driven by greedy shareholders and financiers and seriously needs looking at. Surprised that collective unions aren't all over this and putting it out to the public to ramp up pressure on government to look into it. Company pensions are looking more and more like the latest financial scam where the little man loses out to the greedy vultures.

Nothing like that would ever happen. The simple reason is that the government are actively encouraging it themselves. The whole "pension black hole" issue is tbh , crap. In theory, if we all retired and claimed our pension on the same day, then yes, the pension scheme would fail. The reality is very different. Look around your own work place. In our office we have a range of ages from about 62 down to about 25. This whole thing is driven not by share holders, but by ideology. Put simply, they want it back as it was at the time of my great grandparents. They died in the 1930s. In those days you worked until you dropped. I actually have a document that tells me my Great grandfather on my dads side was 62 when he died. he would have still been working then, unless of course he was not working at the time of death, due to illness, which probably was the cause of death itself. Sadly people are not pro active enough regarding this extremely important issue and the "live for today" brigade could well be caught out. Some people are not even aware that the state pension is no longer paid out at the same time as their company pension, or that it is moving, such is the ignorance of many.

[GRS]

I really hope that the CWU have their legal team all over this. Where is the evidence that the figures RM are chucking about are real or are they like many of their other figures and just plucked out of the air. Can't believe that their liabilities are going to jump from £40m to £900m this figure must be over exaggerated. It's akin to me going in tomorrow and telling the DOM that instead of my duty taking 8 hours it's going to take me a month. Bastards are screwing us over big time.

[nataddick]

GRS -The CWU and their legal team will lose!

The conditions that needed to be met for the RMPP to be kept open to future accrual beyond March 2018 were very clearly spelt out in The Company's Proposal document way back in 2013, so RM knew then where this was likely to end.

RM may be using the media to emphasise the scale of the funding issue but an additional funding contribution in excess of £50 million was the trigger set along with other listed conditions that were detailed in the Proposal document 3 years ago.

I am sorry to say that RM, with all their vast army of legal and financial advisers are ahead of the game compared to the CWU and members on this one. The best that we can hope for is that the CWU negotiate some concessions that minimise the impact of an outcome that has been pre-determined.

[GRS]

Reading this and other threads covering the pension it looks to me that the majority have already thrown the towel in and accepted the change.

[milly]

Reading this and other threads covering the pension it looks to me that the majority have already thrown the towel in and accepted the change.

More people taking Pensions in the future and fewer people contributing to the pension pot as the workforce decreases over the next few years.
It really isn't difficult to understand that the pension in its present form cannot continue.
Does it seem fair? NO,But life isn't fair,so I would suggest that Royal Mail workers should look at investing in AVC's or a personal pension to mitigate the effects of the changes to our pension.

[cloherty1976]

Reading this and other threads covering the pension it looks to me that the majority have already thrown the towel in and accepted the change.

More people taking Pensions in the future and fewer people contributing to the pension pot as the workforce decreases over the next few years.
It really isn't difficult to understand that the pension in its present form cannot continue.
Does it seem fair? NO,But life isn't fair,so I would suggest that Royal Mail workers should look at investing in AVC's or a personal pensions to mitigate the effects of the changes to our pension.

Sadly this is so true

[RobertT]

I would suggest that Royal Mail workers should look at investing in AVC's or a personal pensions to mitigate the effects of the changes to our pension.

Good advice. But the thing that concerns me most, is why are so many people so apathetic towards their retirement provision in the first place? It’s not that we haven’t been warned that our pensions are going down in value. There were the changes that came into force in 2014 de-linking the pension from our wages and before that there was the closure of the final salary scheme in 2008. So what have people been doing since 2008 to offset the changes made then and since?

Up until 2008 the normal retirement age in RM was 60 and personally my pension was on track to provide a reasonably healthy income at that age. Although I already had AVC’s aimed at providing more benefits.
As I’ve always taken an interest in pensions in general, I also knew other Defined Benefit schemes were closing and there was always a chance the RMPP might close too.

However in 2008 my expected pension at 60 suddenly reduced because all pension accrued post April 2010 now had a normal retirement age of 65. *There was a little concession made at the time that meant the first 2 years of the CARE scheme was still counted as NRA60 pension.
As I’d decided a long time ago that 60 was the latest I wanted to work to, but with 55 as an ideal, that gave me 3 choices:

1. Do nothing and resign myself to working until 65.
2. Do nothing and take a reduced NRA65 pension at 60, therefore reducing my income and potentially prolonging my working to 65+.
3. Increase my own retirement provision via AVC’s, a personal pension & ISA’s and give myself a fighting chance of realising my aims. And if I didn’t manage to retire as early as I wanted, at least I’d have more when I did pack up work.

There’s no prizes for guessing which option I chose. And as a result of being proactive and thinking about my future I’m still on track to retire in my mid fifties despite the proposed changes in 2018.
The problem is that most people didn’t think about it at all and will be forced to take either option 1 or 2. And with state pension age increasing, that may well mean working until 68 or later for some.

So if you haven’t taken your retirement seriously before now, consider these proposals to be the kick up your arse you needed.

[milly]

I started paying into my AVC in 2007 when they were looking to close the final salary scheme.
At the time I was less than happy about having to contribute more money to my pension but I felt I had no other choice.
From 2007 onwards I managed to convince a few of my co-workers to invest in AVCs who in turn got their friends to invest too.
Our office has quite a large amount of people paying into AVCs,one or two of my colleagues have taken their pensions and were very pleased that the difference the AVCs made to their pension pot.
As RobertT says you should be looking to be proactive and take charge of your pension.
Looking back at what might have been, and who is to blame is a poor use of your time and energy.

[RobertT]

That sounds like the complete opposite to my DO, many of whom have great theoretical ideas of when they’re going to retire, but not very much in place that will actually help them achieve it.

At the end of the day, it’s your retirement so it’s up to you to make sure your provision is enough to do what you want to do.

[milly]

That sounds like the complete opposite to my DO, many of whom have great theoretical ideas of when they’re going to retire, but not very much in place that will actually help them achieve it.

At the end of the day, it’s your retirement so it’s up to you to make sure your provision is enough to do what you want to do.

The Royal Mail pension scheme is a great foundation for your retirement plans but in and of its self it cannot be relied upon to give you a prosperous retirement.

[RobertT]

That sounds like the complete opposite to my DO, many of whom have great theoretical ideas of when they’re going to retire, but not very much in place that will actually help them achieve it.

At the end of the day, it’s your retirement so it’s up to you to make sure your provision is enough to do what you want to do.

The Royal Mail pension scheme is a great foundation for your retirement plans but in and of its self it cannot be relied upon to give you a prosperous retirement.

Totally agree!

[jetblack]

That sounds like the complete opposite to my DO, many of whom have great theoretical ideas of when they’re going to retire, but not very much in place that will actually help them achieve it.

At the end of the day, it’s your retirement so it’s up to you to make sure your provision is enough to do what you want to do.

The Royal Mail pension scheme is a great foundation for your retirement plans but in and of its self it cannot be relied upon to give you a prosperous retirement.

It certainly can't if the proposed changes are brought in, no.

This for me isn't about the financial acumen of individuals and their financial planning - although I agree with the general gist of being proactive etc.

The issue for me isn't even that the current scheme is unaffordable - or greater life expectancy. I suppose these things play a part/are a reality. But they, for me, aren't the prime movers in the ending of the DB scheme (proposed ending).

It's about the degree of responsibility that a company (now privately owned) has to the employees who produce (the shareholder) profits - to the lifeblood of the company.
The current corporate/political ideological zeitgeist is that the company has no responsibility. There is no such a thing as society just individuals who have a greater or lesser propensity to take personal responsibility. This is quite handy for the corporate shareholders of course if we, as individuals, swallow it. Gets them off the hook - and boosts profitability.

On the other hand, we are destined to work till we are 68, till we are 70, 72.

I've said it before, but the problem is that there needs to be a level playing field, whereby if one company is doing the right thing by its employees in pension terms, then it should be illegal for another competing company to undercut it by offering poor or no pension scheme.

The TUC has a big role to play here.

But really a union movement is only as strong as the individuals it is made up of. If we are going to role over and have our bellies tickled because clever actuaries have told us it's inevitable, then we deserve all we get.

[milly]

That sounds like the complete opposite to my DO, many of whom have great theoretical ideas of when they’re going to retire, but not very much in place that will actually help them achieve it.

At the end of the day, it’s your retirement so it’s up to you to make sure your provision is enough to do what you want to do.

The Royal Mail pension scheme is a great foundation for your retirement plans but in and of its self it cannot be relied upon to give you a prosperous retirement.

It certainly can't if the proposed changes are brought in, no.

This for me isn't about the financial acumen of individuals and their financial planning - although I agree with the general gist of being proactive etc.

The issue for me isn't even that the current scheme is unaffordable - or greater life expectancy. I suppose these things play a part/are a reality. But they, for me, aren't the prime movers in the ending of the DB scheme (proposed ending).

It's about the degree of responsibility that a company (now privately owned) has to the employees who produce (the shareholder) profits - to the lifeblood of the company.
The current corporate/political ideological zeitgeist is that the company has no responsibility. There is no such a thing as society just individuals who have a greater or lesser propensity to take personal responsibility. This is quite handy for the corporate shareholders of course if we, as individuals, swallow it. Gets them off the hook - and boosts profitability.

On the other hand, we are destined to work till we are 68, till we are 70, 72.

I've said it before, but the problem is that there needs to be a level playing field, whereby if one company is doing the right thing by its employees in pension terms, then it should be illegal for another competing company to undercut it by offering poor or no pension scheme.

The TUC has a big role to play here.

But really a union movement is only as strong as the individuals it is made up of. If we are going to role over and have our bellies tickled because clever actuaries have told us it's inevitable, then we deserve all we get.

I could have some sympathy with your views if the Royal Mail pension was unique in respect of other occupational pensions.
We are in a better position than employees of BHS and TATA Steel etc.
I believe that Royal Mail is doing its best by its employees to keep the pension open and acts within the law.
Unfortunately we live in strange times,the Bank of England interest rate is the lowest its been in its 322 year history.
The TUC or Union members have no control over financial markets,I really can't see what the TUC can do.
If you can think of any solution where by we can keep the same level of pension benefits I will be interested to hear your views.