ANNOUNCEMENT : ROYAL MAIL EMPLOYMENT POLICIES (AGREEMENTS) AT A GLANCE (UPDATED 2016)... HERE


Gaming theory 101

08 Jan 2017, 19:36

Pension raiding plan, the company wants to reduce contributions to around 14-15%.
So they go for a stupid figure of 10% knowing it provokes a dispute. Negotiations take place and we must compromise and see it as a victory if we push them back a little and so we eventually settle for around 14-15%.

Royal mail get what they want and posties still lose a load of pension. Simple game theory. :dance

Gaming theory 101

08 Jan 2017, 19:53

I think 12-13% with a cash bung will be closer to the mark but you're right, it's a game and no matter the outcome we lose.

Gaming theory 101

08 Jan 2017, 19:55

I wish I had your optimism that RM will go beyond 10% - they have been one step ahead since 2008 and the CWU are playing catch-up. A saving of 7% on pensionable payroll of £2Billion equates to approximately £140M - up go the profits, dividend and the share price !
Last edited by nataddick on 09 Jan 2017, 07:34, edited 1 time in total.

Gaming theory 101

09 Jan 2017, 06:01

nataddick wrote:I wish I had your optimism that RM will go beyond 10% - they have been one step ahead since 2008 and the CWU are playing catch-up. A saving of 7% on pensionable payroll of £2Billion equates to approximately £140M - up go to the profits, dividend and the share price !

I’d second that! Any changes to the proposals will probably be in the detail rather than the headline amounts. Although I do live in hope that an increase of the proposed employer contributions is possible. But 14-15% just dreaming.

Gaming theory 101

09 Jan 2017, 07:40

Oh forgot to mention that 'The proposal is not about reducing what the company spends' !

Gaming theory 101

09 Jan 2017, 08:02

RobertT wrote:I’d second that! Any changes to the proposals will probably be in the detail rather than the headline amounts. Although I do live in hope that an increase of the proposed employer contributions is possible. But 14-15% just dreaming.


The union's starting "position" is that the DB scheme should stay open, we know that's a false position , not feasible and only an opening gambit but it's still a position they'll have to surrender on paper. I don't believe the union can afford to surrender that position for some minor detail changes to the original proposal. The union is already perceived as having surrendered twice over pensions when the final salary scheme closed and the DB scheme closed to new entrants, I don't personally think they can afford a third defeat.

Some increase in the headline figure is all that many members will really understand, not the minute details involved, that or a sizable cash bung obviously.

Gaming theory 101

09 Jan 2017, 08:12

I see what you are thinking of as it's been used by companies such as Royal Mail for years through their changing programs / restructuring and it's sometimes called the 5 stages of change / grief.
These are;

Denial, They cannot be serious by asking us to take such radical hard hitting changes can they, surely they're bluffing... (The company always expect this at the proposal stage of any change.)
Anger, The anger of the realization that they are being serious and what the detrimental effect this will have on you. (Your natural reaction to something as radical as this)
Bargaining, We all see this as when you go in after the anger to see how we can minimize the change and how it effects us in the long run i.e the Unions involvement. (Again the company always pen this in as part of their process to force in any change)
Depression, When the facts, after negotiation, are laid before you and start to sink in. (Again a natural reaction when you as an individual realize what you are going to lose now and in the future by this change)
Acceptance. The final stage is that the company hope they can get you to accept though not happy about it. (They often use the bargaining stage at this point to point out how much they have compromised and it now isn't as bad as when first proposed but in reality is what they set out for in the first day when discussing this in the boardroom)

Gaming theory 101

09 Jan 2017, 10:47

One of the key points missing from the 'Big Red Proposal' booklet is the cost of the new proposal to RM going forward. There is a vague reference on various pages as follows:-

* The Company would continue to make a significant contribution to your pension. We would expect to pay around the same amount in pension contributions and National Insurance contributions in 2018-19 as we did in 2015-16.

What this does not mention is whether the amount they would be paying in 2018-19 includes using any of the remaining surplus or include the one off bung of around £70M (based on 93,000 active members at £750 a time) No reference is made as to the cost in terms as a percentage of pensionable payroll beyond 2019/20 and yet clearly this is a known factor.

As always, with these technical tomes it is not always what they state but rather what they do not. Personally, I think RM are trying to recover some of the increased employer N.I. costs as a result of the end of contracting out. PSE seems to have reduced the cost to around £65M and we knew that this increase in costs and its impact on the RMPP was up for review in March 2018.

Gaming theory 101

09 Jan 2017, 20:00

nataddick wrote:There is a vague reference on various pages as follows:-

* The Company would continue to make a significant contribution to your pension. We would expect to pay around the same amount in pension contributions and National Insurance contributions in 2018-19 as we did in 2015-16.


Which is actually a cut of 3% in real terms with inflation circa 1%. So in 10 years time they would be paying 10% less.
Last edited by meercat on 09 Jan 2017, 20:02, edited 1 time in total.

Gaming theory 101

09 Jan 2017, 20:02

banner wrote:Pension raiding plan, the company wants to reduce contributions to around 14-15%.
So they go for a stupid figure of 10% knowing it provokes a dispute. Negotiations take place and we must compromise and see it as a victory if we push them back a little and so we eventually settle for around 14-15%.

Royal mail get what they want and posties still lose a load of pension. Simple game theory. :dance



So it goes that the CWU will take an equally strong opposing position and they meet in the middle. I watch Bargain Hunt too. :/

Gaming theory 101

09 Jan 2017, 22:50

RM start on the pensions every time they want something else. "Oh go on then, 13% but only if you go down to a 35hr week". And the Union says they've struck a good deal.

RM don't pay into the pension for overtime so any overtime done instead of contracted hours equates to a pensions short fall. A 35 hour week and significantly part time work force will really ruin the pension pot.

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