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Simon English: It's vital for us all that Royal Mail delivers on its pension pledges

10 Jan 2017, 15:55

http://www.standard.co.uk/business/simo ... 37196.html

What is a pension? Most obviously, an income in retirement. It is at least two other things.

First, it is wages deferred. You sign on the dotted line with company X, and it agrees to deduct a chunk of your salary, and add a bit too, as long as you don’t expect to claim it until you stop working.

This binds you to the company and the company to you in ways that used to be seen as good for both sides and good for society.

Second, it is a promise to pay. When those promises start being broken, we should have a close look at why. Royal Mail said last week that it wants to shut its final salary pension scheme, making 90,000 workers poorer in the process.

The maths is striking (the postmen might soon be, too). A 30-year-old with 10 years’ service at Royal Mail who was expecting to retire on a pension of £15,000 — not exactly a fortune — will see that cut to £7000, a barely liveable pittance.

Some say the closure of the scheme is a matter of inevitability, Royal Mail finally doing what so many big companies have already done. You can see that there’s an issue, since it pays in £400 million a year to the fund and estimates that it would have to pay £1 billion a year in the future.

But that assumes bond yields don’t leap, which they might. Pension funds have long lives; how they look today doesn’t necessarily predict their health later.

Unlike many company schemes, the Royal Mail pension fund isn’t even in deficit; indeed it has a £1.8 billion surplus.

It’s not a matter of certainty that Royal Mail couldn’t keep its promise to staff and give them a proper pension.

When it comes to pensions, it is noticeable the difference in the numbers that get bandied around depending on the audience.

When facing the City, companies like to talk about how much cash they generate, about how profitable they are going to become. When talking to staff about pensions, suddenly that cash doesn’t exist. So they’re fibbing to someone.

Royal Mail chief executive Moya Greene is a good sort, union sources say. She doesn’t want to hack the pensions and is aware that the move will be the most far-lasting and significant impact of her time in charge. She finds the issue awkward, an embarrassment, they say.

Greene, at £1.5 million a year, is poorly paid for a Footsie boss. She does get £200,000 a year lumped into her pension though.

If that amount were suddenly halved, Greene would sue for breach of contract. Moreover, she’d win.

She isn’t in the same fund as her staff, of course, giving her no monetary incentive to protect staff pensions.

We expect that chief executives should own shares in the companies they run, meaning they suffer if investors do. Why shouldn’t they be in the same pension fund as their staff for the same reason?

If we were all in it together, everyone’s pension would surely be higher. Instead, we have a pensions apartheid that sees a lucky few guaranteed a wealthy retirement, and the rest of us scrabbling for security.

We have an odd attitude to pensions in this country, seeming to resent anyone who has secured a good deal. The thinking goes like this: my pension is a hard-earned right. Yours is a gold-plated outrage the nation can no longer afford. His is an unfunded liability.

We don’t want to pay for pensions, seeming to prefer to pay NHS bills for sickness in old age that a proper pension might have avoided. Ryanair chief executive Michael O’Leary likes to dismiss rival British Airways as a pension fund with wings, rather giving the game away that business executives see the paying of pensions as an irritant — a hindrance to doing business, rather than a significant duty of it.

Perhaps there should be a category of awards for chief executives who do the most to protect staff retirements, thereby saving the Government millions in state aid.

Former BHS owner Sir Philip Green need not apply. Moya Greene could put herself in the running just by insisting that old pension promises will be kept, by fighting to get her staff the best possible future deal, even if the final salary fund really has got to close.

For Royal Mail staff and for the rest of us, pension rights were hard won. They should be fought for.

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

10 Jan 2017, 16:23

from what I've been hearing,...we'll lose the vote for strike action.

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

10 Jan 2017, 19:37

daveyeff wrote:from what I've been hearing,...we'll lose the vote for strike action.


Why?

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

10 Jan 2017, 20:05

I'm the 30 year old with 10 years service. If i was to claim my pension for 20 years I will be £140,000 worse off.

Yet they think a £750 lump sum will make me accept the changes.

Absolute joke, strike action is definitely needed if we cannot keep this open!

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

10 Jan 2017, 20:31

Chitchat wrote:
daveyeff wrote:from what I've been hearing,...we'll lose the vote for strike action.


Why?

maybe because people have been telling how they would vote if a ballot for industrial action is called.

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

10 Jan 2017, 22:55

Chitchat wrote:
daveyeff wrote:from what I've been hearing,...we'll lose the vote for strike action.

Why?


Assuming you mean "Why would people vote against striking?", well I can think of a few potential reasons!

1. 1/3 (and growing) of the work force are in the defined contribution scheme, so have very little incentive to vote in favour of strike action over this.
2. Anyone in the affected schemes who's leaving the business (especially if they're retiring) before the closure takes effect.
3. All those people who don't place any especial value on the existence of the pension scheme, but do place a value on a £750 lump sum.
4. All those people who don't want / can't afford to go on strike.

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

11 Jan 2017, 10:04

toomuchcoke wrote:
Chitchat wrote:
daveyeff wrote:from what I've been hearing,...we'll lose the vote for strike action.

Why?


Assuming you mean "Why would people vote against striking?", well I can think of a few potential reasons!

1. 1/3 (and growing) of the work force are in the defined contribution scheme, so have very little incentive to vote in favour of strike action over this.
2. Anyone in the affected schemes who's leaving the business (especially if they're retiring) before the closure takes effect.
3. All those people who don't place any especial value on the existence of the pension scheme, but do place a value on a £750 lump sum.
4. All those people who don't want / can't afford to go on strike.


5. Out of my office a third have said they haven't read the letter about the consultation RM sent out last week, 'Oh, I just chucked it away'. :arrrghhh
6. Some members already drawing part of their pension 'So it doesn't really affect me anyway' :arrrghhh
7. 'Yeah, I'm in the old pension scheme but I'm not a Union member'. :arrrghhh
8. DC members - 'Why did I get lumbered with a DC pension'? - Good question, well presented.
9. 'Don't really understand it, they'll just do what they want'. :arrrghhh

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

11 Jan 2017, 14:08

well why dont everyone f**k off out the pension fund that would leave rm with a little problem of zero funding

Simon English: It’s vital for us all that Royal Mail delivers on its pension pledges

11 Jan 2017, 17:28

Chitchat wrote:
daveyeff wrote:from what I've been hearing,...we'll lose the vote for strike action.


Why?

well I put this in another post, but i'll put it here as well.... I've been talking to a few lads who said they definitely will NOT be voting for strike action because they are already in receipt of their pension. as are thousands of others. the driver who calls up from the mail centre said that's the view of a load of people (including him) from a lot of offices he goes to. ask the young'uns and they just shrug their shoulders with a 'couldn't care less attitude', some even said 'the 750 quid will be nice!!.. the lino said he wont be voting for strike action either because he's taking his in 3 yrs when he's 55 and wouldn't be losing THAT much, and he said he couldn't give a monkeys about the younger generation. apparently a pensions expert in the tabloid reckons the union will struggle to get a mandate for strike action because of the same things I've been hearing about. and I don't know if this is true or not but I heard Moya is saying it WILL close no matter what, strike or no strike because of the sheer unaffordability of it and the shareholders come first in all of it. we are buggered if we lose this.