Branch Report on the CWU Pension Policy Forum held 10/11/11

[Geezer]

Dear Colleagues

Please find attached Policy Forum Report on Pensions.

CWUHQ will be sending out a mail shot to all members in due course to update people on the currewnt state of play with talks with the Government and Royal Mail Group.

I will look to get a hard copy out shortly.

Any queries please let me know.

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Branch Report on the CWU Pension Policy Forum held on 10 November 2011 in Manchester

Dave Ward DGS(P) opened the Forum by providing a detailed report on the current state of the continuing efforts of the Union to secure and protect our pensions for the future.
Without doubt the current situation is creating huge uncertainty for members and their families and the purpose of this Forum was to enable Branches to set policy for the Union in their talks with both the Government and Royal Mail Group.

Government Intentions

It is the intention as set out in the Postal Services Act, for the Government to take over the running of the pension scheme for both deferred members, retired members and up until March 2012 current members.
This means that Royal Mail Group will still operate a pension scheme (known as the Royal Mail Pension Plan – RMPP) which will be split into two.
One larger scheme for employees in Royal Mail and Parcelforce and one smaller scheme for members in Post Office Limited.
This due to the fact that POL is not being privatised and may in fact become a co-operative of some sort – details are yet to be finalised.

It should also be borne in mind that the CWU managed in 2007 to secure a link to final salary for pensions up to April 2008.
The cost of this link is NOT however being borne by the Government despite it being part of the historical liabilities that they are assuming responsibility for.
Cynically, the Government will be taking nearly all the assets of the current RMPP which are around £28 billion,
and selling them off to pay back the so called deficit caused by the bankers and no doubt to bribe voters with tax cuts at the next General Election.
In other words, our wages that have bought these assets will pay back the bankers and give richer people tax cuts.
Additionally, some assets will be left for the RMPP to operate in order to ensure a viable pension scheme into the future run by Royal Mail and POL.

State Aid Approval from the EU

Mention must be made of the Government’s application for State Aid approval from the EU. This is not a formality.
If State Aid approval is not given then Royal Mail would quickly move to a crisis position, unable to pay its way.
The Company spends upwards of £300 million each year on pensions, but cannot generate enough profits to keep this going.
Those who have followed this debate will know that the unfair regulation is to blame coupled with a pensions holiday for 13 years.
The State Aid approval is needed because taking off the pension liabilities from Royal Mail can be seen as giving them a competitive advantage over other private postal carriers, hence the controversy and absolute need to get this sorted.
The CWU have produced a detailed report supporting the Government’s bid to get approval. Without it, we are in deep trouble. A copy is available on request.
The most likely outcome according to the CWU is approval but with some conditions, which might mean the partial break up of the Company. Hopefully not.

CWU Position

 Current pension benefits and entitlements MUST be protected into the future and must not worsen. If they do, then the potential for a national dispute over pensions would be a racing certainty.

 The assets that will be left to run the RMPP must be of a good enough quality to enable a viable scheme. Talks are continuing with the Government and the CWU have employed outside Pension experts to help scrutinise the Government position.

 New entrants need to be given access to the main Defined Benefit Scheme. It is disgraceful that they are prevented from doing so and can only join an inferior Defined Contribution Scheme after 1 years’ service. There are currently around 15000 employees in this inferior scheme and this is growing all the time. This will eventually destabilise the RMPP as fewer people will be contributing into it.

 Any new owner of Royal Mail must NOT worsen pension benefits.

 The Government and Royal Mail decision to move to CPI increases instead of the more beneficial RPI for pension uprating must be reversed – this currently affects retired members of the POSSS ( now known as Section A/B) and those who are or were in this Scheme, ie before 1987. CPI and RPI are different measures of inflation, of which CPI generally increases at less than the RPI. Overtime around 15% is knocked off the value of someone’s pension. There are around 23000 members of the A/B Scheme who are still working in Royal Mail Group including POL.

Policy Forum Decisions

Against the back drop of the above (a copy of the full report is available on request) some 13 amendments were submitted by Branches.

Our own Branch submitted an amendment to ensure that the assets left with the RMPP would be enough to allow new entrants to join the main RMPP scheme. If not now, when ? We believe that now is the time to win this argument with the Government. Also, that if the CPI / RPI issue is not sorted, that we would seek a commitment from the Labour Party as part of their next General Election manifesto. We were very pleased that this was CARRIED UNANIMOUSLY.

Some (Anglia Division and others) were concerned to ensure no worsening of terms into the future or else the CWU would look to ballot for industrial action. Also, that in this eventuality we should look to co-ordinate any action with the TUC Public Sector Pensions disputes. This was carried.

The London Stations and Mount Pleasant Branches wanted to ensure that any new owner must not worsen terms, failing which consideration of an industrial action ballot must be considered. This was carried.

One amendment not carried was from the Merseyside Branch who wanted to ensure the CPI / RPI issue was sorted by 28 February 2012 or else the Union should ballot its members. This was not carried.

An amendment from the London Division asked that in the event that State Aid approval is not given that an immediate further Pension Forum or debate at CWU Conference must take place to deal with the crisis. This was carried.

An amendment from the Gloucester Branch focussed on ensuring a Pensions Working Group , training for reps in basic understanding of the pension schemes, to demand that no new owner will be allowed to undertake a pensions holiday and the reintroduction of retirement seminars. This was carried.

The Plymouth and Harrow Branches wanted to recommit the CWU to its policy of removing the lower earnings limit for those in POPS / Section C. This was carried.

The Greater Manchester Branch and the Newcastle and York Branches were concerned to ensure enough assets were available and that the Postal Services Act must not worsen benefits. These were carried.

The SE No. 5 Branch wanted to ensure that changes to the RMPP would be voted on by members and the London Divisional Committee wanted to ensure robust follow up reports on progress made. Both were carried.

Conclusion

Members need to be aware that these are absolutely crucial issues. We must ensure our pensions are secured and protected and that new entrants can join the RMPP.
Members need to play their part in supporting the CWU to the fullest extent.
Further updates will come out in due course and CWUHQ will be sending out a mail shot to all members shortly.


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Branch Secretary
10 November 2011

[POSTMAN]

Thanks Geeze.