LTB 211/17 - Royal Mail Pensions Closure of RMPP

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LTB 211/17 - Royal Mail Pensions Closure of RMPP

No. 211/17

13th April 2017





Dear Colleagues,

Royal Mail Pensions: Closure of RMPP

Following Royal Mail’s announcement of its unilateral decision to proceed with closure of the RMPP for future accrual from March 2018, I am writing to Branches to set out the union’s response.

Attached for your information is a copy of a press release issued by the CWU which strongly condemns the company’s decision and calls on it to think again, withdraw its proposal and enter into meaningful talks with the CWU on introducing our own Wage in Retirement Scheme (WiNRS) which will provide all our members with a decent income and security in retirement.

Despite the union’s strong objections to its closure plan and the fact that Royal Mail’s own consultation exercise revealed overwhelming opposition from employees, the company has decided to completely ignore the views of its workforce, abandon our mutual interest agreements and proceed with closure without consent.

In line with our long standing policy commitment, the CWU have made clear that the company’s attempt to impose change without agreement will be met with the strongest possible opposition including a ballot for industrial action. We will strongly resist any attempt by the employer to impose inferior pension provision which threatens members with massive cuts to future pension benefits and growing insecurity and pensioner poverty.

In the face of Royal Mail’s proposal to close the RMPP and growing evidence of the inadequacy of DC provision, we believe the CWU’s WiNRS scheme provides the company with a credible, cost-efficient and lasting pension solution. Our proposal addresses issues around cost and risk and meets a deeper, moral obligation to deliver fairness to both this and the future generations of Royal Mail employees by providing them with dignity and security in retirement.


In the view of our actuaries, First Actuarial, our proposed scheme is totally viable, allows for prudent management of long term risk, controls employer’s long term pension costs and is likely to deliver pension benefits substantially better than a DC arrangement, bringing an end to two-tier provision.

Instead of rejecting our pension proposals, proceeding with executive action and closing the RMPP without consent, we have urged Royal Mail to honour our agreements and withdraw their closure plans or face the prospect of a serious dispute with the CWU.

Further updates will be provided to Branches in due course.

Any enquiries in relation to this LTB should be addressed to the DGS(P) Department quoting reference 24111a.

Yours sincerely,



Ray Ellis
Acting Deputy General Secretary (Postal)

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Subject: Press Release: CWU CONDEMNS ROYAL MAIL PENSION CLOSURE
For immediate release
13th April 2017
 
CWU CONDEMNS ROYAL MAIL PENSION CLOSURE
 
The Communication Workers Union (CWU) has today strongly condemned Royal Mail’s decision to close its current Defined Benefit pension scheme for future accrual in March 2018.
 
In place of the current Defined Benefit scheme, Royal Mail plan to put all members into inferior money purchase alternatives. On average, employees face losing up to a third of their future pensions. For a 50 year old Section C member earning £25,000 a year and retiring at 65, this would equate to a loss of £4,392 a year (£109,800 over 25 years).
 
Commenting on the company’s closure announcement, Ray Ellis, Acting Deputy General Secretary (Postal) said: “Although Royal Mail’s own consultation exercise revealed massive opposition to its closure plan, the company has decided to ignore the views of its workforce and proceed with closure without consent”.
 
“CWU has made clear that any attempt by the company to impose change without agreement will be met with the strongest possible opposition including a ballot for industrial action. We will not stand by and watch the company abandon the pension promises it made at the time of privatisation which threatens our members with massive cuts to their future pension benefits and insecurity and poverty in retirement”.
 
In response to the company’s plan to close the DB scheme to future accrual, the CWU have put forward an alternative proposal for a defined benefit Wage in Retirement Scheme (WINRS) which will provide the company with “a credible, cost efficient and lasting pension solution for all its employees”.
 
Ray Ellis, A/DGSP warned the company to think again: “Instead of provoking a dispute by acting without agreement and closing the scheme without consent, we urge Royal Mail to withdraw its plans and enter into serious talks with the CWU to introduce our new WINRS scheme to guarantee all its employees a decent wage and security in retirement”.
 
-Ends-