LTB 403/17 Royal Mail Pensions
14th July 2017
TO: ALL BRANCHES WITH POSTAL MEMBERS
Royal Mail Pensions
Royal Mail has today announced that they have effectively broken off talks with the CWU and decided to close the Defined Benefit scheme to future accrual from March next year and give RMMP members the “choice” of going into one of two vastly inferior alternatives.
The company’s decision to take executive action without CWU agreement is a clear rejection of our mutual interest approach. While the decision to impose change is not surprising given the company’s repeated threats to do so, it is clearly unacceptable when our pension agreement commits both parties to seek agreement and jointly develop future pension strategy.
The CWU have never accepted the closure of the DB scheme but have pragmatically proposed a solution that meets the company’s concerns about managing long term risk, responds to the inadequacies of the DC scheme, would end two-tier provision and provide a ‘wage in retirement’ for all on a more cost efficient basis than either the company’s DC or cash balance alternatives.
Despite accepting that our wage in retirement scheme is sound and workable they have never responded seriously to our proposal and from the outset of talks have been determined to introduce cheaper less favourable cash out schemes. However the company tries to dress them up, the fact is that both their cash balance and DC schemes will mean tens of thousands of CWU members will face huge losses in their future pension benefits - with the biggest hit falling on the youngest.
In relation to their cash balance scheme, the illustrations now provided by Royal Mail reveal that a Section C member age 50 at 2018 with 30 years’ service, retiring at 65, will see their pension benefits reduced by 22.3%. The same member in Section B will see their benefits reduced by 19% while a Section C member age 30 at 2018 with ten years’ service, retiring at 65, will see their pension benefit cut by a staggering 51.6%. For those going into the DC scheme, the average losses will range from 20% for those retiring at 60 to 30% for those retiring at 65.
In line with our Four Pillars policy and campaign, the CWU are calling on Royal Mail to withdraw their proposals immediately and in accordance with the spirit and intent of our agreement to enter into serious, meaningful talks on pensions with the union around the introduction of our WinRS scheme to allow us to address all the outstanding issues between us and secure a settlement agreeable to both sides.
We equally believe that taking executive action would be a breach of the legally binding agreement on pensions and we will be seeking advice in this regard. Should that not be an option then we will be forced to consider acting on the union’s policy to ballot for industrial action consistent with our efforts to reach agreements on all aspects of our ‘Four Pillars of Security’ and pay claim.
Attached to this LTB is Bulletin 7 which sets out the union’s case for a wage in retirement scheme and the inadequacy of Royal Mail’s proposed alternatives.
Further updates will be provided in due course.
Any enquiries relating to this LTB should be addressed to the DGS(P) Department.
Deputy General Secretary (Postal)
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