CWU & Royal Mail Dispute/Protecting the Four Pillars Agreement

[RobertT]

I agree!
I can understand why someone with a decent DB pension tucked away might prefer RM to provide a DC scheme going forward, to allow flexibility alongside their already accrued guaranteed benefits and state pension.

But as those with DB benefits slowly leave RM over the coming decades, only having a DC scheme for those left would leave many with inadequate pension savings.
So at least CDC is trying to replicate similar benefits to DB and provide more than just a pot of money, with options.

For most people, especially those currently with just DC pensions and for the RM workforce going forward, CDC has the potential to be so much better than DC.

[anini]

'The pension agreement was for everyone to be put into the CDC scheme when/if that happens.'
That's precisely my point. They agreed a deal which still needed parliamentary approval which may never come into fruition, left a two tier workforce with different contribution levels ( how can that br justified)13.6% v 10%, and the 13.6 can go up to 14.6.
I dont know the details bit there must be at least a 50/50 split between the db members and dc members but the dc members waited 10 years for something more equitable and they were shafted again.

[RobertT]

'The pension agreement was for everyone to be put into the CDC scheme when/if that happens.'
That's precisely my point. They agreed a deal which still needed parliamentary approval which may never come into fruition,

Yet the CWU membership still voted by a big majority to accept it.

left a two tier workforce with different contribution levels ( how can that br justified)13.6% v 10%,

You can argue there's been a 2 tier workforce as far as pensions are concerned, since section A was replaced by section B on 1st December 1971. A 3 tier workforce since B was replaced by C on 1st April 1987, and a 4 tier workforce when the DC scheme was introduced on 1st April 2008.

and the 13.6 can go up to 14.6.

No it can't!
there is no ability to pay more into the DBCBS.
But section C & F(ex DC) members of the RMPP can pay extra via Bonusplan which benefits from more contributions from RM – up to a maximum of £150 per year.
All RMPP members can also pay into Flexiplan and DC members can pay in more into their pot if they choose. Both benefit from tax relief and PSE, but get no extra from RM.

The extra matched 1% you're referring to relates to the DBLSS, which will provide a lump sum alongside the CDC!

I dont know the details bit there must be at least a 50/50 split between the db members and dc members but the dc members waited 10 years for something more equitable and they were shafted again.

I think there's more in the DB scheme, and would guess about a 55/45 split, but not 100% sure to be honest.

The agreement was to introduce a CDC scheme pending the successful lobbying of government and introduction of the required legislation, etc, so RM could offer one pension scheme for all.

In the meantime, transitional arrangements would be in place. Which have only got a fairly limited lifespan. The agreement stated that if CDC doesn't look like happening within a certain period of time, they'll look at the pension issue again.
As RM won't want to offer anything with any hidden future costs, a DC scheme for all is probably the only other alternative.

So far we've had a government consultation on CDC which wouldn't have happened had it not been for the 4 Pillars agreement, and that was positive! Things have stalled recently due to things out of RM's control, but may be back on track in October?
In reality it was never going to be a quick process.

You can argue that what we've got at the moment isn't ideal and I wouldn't disagree with you, but ultimately that's what was agreed and then voted in by the union membership.

That damn democracy stuff - don't you just hate it!

[rogersh]

As you know Robert comparison of 13.6% DBCBS & 10% RMDCP needs adjusting due to the LED deduction.
I estimated at April 2018 Pensionable pay £22,568 p.a
DC scheme
Employee weekly contribution 6% = £26.04
Employer """""""""""""""""""""""" 10% = £ 43.40
Total £69.44

Transition scheme - less LED deduction pensionable pay = £18,815
6% = £21.72
13.6% = £ 49.20
Total = £70.92

Not much difference in contributions, but I calculated after Tax & N.I. more benefit to the DBCBS member in take home pay.

[heapsy]

The issue of an NRA of 67 for me at least is a major one. How many people working in delivery will work until that age? Discrimination case? It seems the CWU have scored a massive own goal by alienating the majority of their own membership. People will be forced to take a reduced pension if they cannot work that long. The DC option will also provide greater flexibility, as this could be transferred out to other DC schemes that many people seem to have.

[RobertT]

CDC isn't as black and white as that!

It will also give you the option of transferring out into an individual DC scheme in a similar way to the CETV process with a DB pension. Therefore you can access the money before 67 at whatever it's value is at the time.
The value will be an actuarial sum based mainly on your accrued benefits, average life expectancy and the value of the whole CDC fund. Everyone will effectively have their own little slice of the CDC cake.

But you will obviously be forgoing the income for life that CDC is designed to provide.