Response from CWUHQ - Uprateing Pensions in Line with CPI

[Geezer]

Dear Colleagues

Following the ongoing uncertainty around the future for our pensions and now the move to uprate pensions only in line with the CPI, please find below response from CWUHQ.

When the matter of the uprating first became news, the Union wrote to Royal Mail on 14 December seeking assurances that RPI would be used.

As you can see from the email below, Royal Mail have not responded but a meeting is due to be held.

For those unaware, the normal uprating is in line with the Retail Price Index (RPI) which is the figure commonly referred to as the rate of inflation. The Consumer Price index (CPI) is a similar inflation figure but this excludes housing and some other costs. The CPI is therefore generally lower than the RPI, hence the controversy over how our pensions will increase each year.

I should also point out that a retired member from our Branch wrote to the RM Pensions Administrator and was told that the move would be to CPI for those in Pension Plans A and B (ie those who are not in POPS) from April 2011.

If anyone has any queries on this please let me know.

Regards

**** ********

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Ref: **********

Dear ****



Further to your letter of the 7th February 2011 regarding the Royal Mail Pension Plan and the changes from RPI to CPI. You have asked for an update and I am therefore offering the following; the Union is continuing to oppose the changes being introduced and we are preparing a submission to the latest Government consultation exercise. In relation to Royal Mail we have still not received from them a formal reply and arrangements are being made for a meeting to be held between the DGSP and the CEO Moya Greene. As regards to the trustees we understand that they are working on the proposal outlined in the Governments changes from RPI to CPI and the indication is they will be seeking to amend the uprating procedure for section A & B members and aligning it to CPI where as section C will remain as currently detailed in the scheme rules. They have stressed to the Union that this issue is proper to formal negotiation and not within their remit as any change would be seen as a benefit improvement.



I do hope the above goes some way in providing you with an update if you require any further information please do not hesitate to contact the Department.



Regards

Norman Candy

CWU, Policy Advisor DGS (P)

[easter bunny]

A two tier Pension Plan...When loyalty from long serving Section A and B Members, count for nothing, get smaller increases than Section C...

Dreadful...

[BELIAL]

Well if that's their attitude ,just go for the employers contribution being converted to salary and fight for the increase on basic pay. Employees keep their contribution and spend or save, all tax relief converted to basic pay and suck it and see what happens to state pensions . Not much point in a "gold plated" pension if you starve to death before you qualify

[RobertT]

A two tier Pension Plan...When loyalty from long serving Section A and B Members, count for nothing, get smaller increases than Section C...

But then again section A & B have better pension benefits than C members, so we already had a 2 tier scheme.

[RobertT]

Well if that's their attitude ,just go for the employers contribution being converted to salary and fight for the increase on basic pay. Employees keep their contribution and spend or save, all tax relief converted to basic pay and suck it and see what happens to state pensions .

Or in other words do nothing about your income in retirement and hope for the best - not exactly a sensible or grown up thing to do.

[BELIAL]

Well if that's their attitude ,just go for the employers contribution being converted to salary and fight for the increase on basic pay. Employees keep their contribution and spend or save, all tax relief converted to basic pay and suck it and see what happens to state pensions .

Or in other words do nothing about your income in retirement and hope for the best - not exactly a sensible or grown up thing to do.

Not exactly Robert T , still I would question your faith in the "mature" approach of handing your cash over to bankers and their ilk with the flimsy promise of returns in the distant future; events seem to be undermining your blind faith approach. It's an equitable life Stanley

[RobertT]

Not exactly Robert T , still I would question your faith in the "mature" approach of handing your cash over to bankers and their ilk with the flimsy promise of returns in the distant future

I've made good returns on my stock market investments. For example, aprox 55% of my additional pension savings has been paid in by myself, with the other 45% being 'free' in the form of tax relief, growth & a bit extra off RM. So not particularly flimsy.

events seem to be undermining your blind faith approach. It's an equitable life Stanley

I don't think I have a blind faith approach at all, as I expect my retirement income to be made up from several sources, all of which have risks involved.

As for Equitable Life, I got burned myself!

[BELIAL]

Not exactly Robert T , still I would question your faith in the "mature" approach of handing your cash over to bankers and their ilk with the flimsy promise of returns in the distant future

I've made good returns on my stock market investments. For example, aprox 55% of my additional pension savings has been paid in by myself, with the other 45% being 'free' in the form of tax relief, growth & a bit extra off RM. So not particularly flimsy.

events seem to be undermining your blind faith approach. It's an equitable life Stanley

I don't think I have a blind faith approach at all, as I expect my retirement income to be made up from several sources, all of which have risks involved.

As for Equitable Life, I got burned myself!

Not exactly representative are you ROb. No slur intended mate, but just how many RM employees do you think have the surplus income necessary to dabble in shocks and stares Good luck but ,45% free ,course it is

[RobertT]

Not exactly representative are you ROb. No slur intended mate, but just how many RM employees do you think have the surplus income necessary to dabble in shocks and stares Good luck but ,45% free ,course it is

I agree that I'm probably in a better position than most but I've put myself there by saving, but I wouldn't say that I dabble in shares exactly, I've just built up a nice little pot by putting a bit by every month over quite a long period of time.

[belle smith]

A two tier Pension Plan...When loyalty from long serving Section A and B Members, count for nothing, get smaller increases than Section C...

But then again section A & B have better pension benefits than C members, so we already had a 2 tier scheme.

Aye, plus section C was entierly affordable till it was merged with sections A & B with there defficit.

[rockytony67]

A two tier Pension Plan...When loyalty from long serving Section A and B Members, count for nothing, get smaller increases than Section C...

But then again section A & B have better pension benefits than C members, so we already had a 2 tier scheme.

Aye, plus section C was entierly affordable till it was merged with sections A & B with there defficit.

Your talking rubbish there belle, they could never have taking a pension hoilday in A & B unless they had a surplus in the fund, they didn't take a pension holiday in C until they financially merged the two schemes, so think about it were did they get the money to to take the holiday in C

[BELIAL]

Whatever Rocky Only one group will get shat on ,and it ain't the trustees

[belle smith]

A two tier Pension Plan...When loyalty from long serving Section A and B Members, count for nothing, get smaller increases than Section C...

But then again section A & B have better pension benefits than C members, so we already had a 2 tier scheme.

Aye, plus section C was entierly affordable till it was merged with sections A & B with there defficit.

Your talking rubbish there belle, they could never have taking a pension hoilday in A & B unless they had a surplus in the fund, they didn't take a pension holiday in C until they financially merged the two schemes, so think about it were did they get the money to to take the holiday in C

yep Rocky A and B were fully funded in fact at least 105% through the entire period of the pension holiday.
That doesn't mean they had a 105% of the money they needed to pay out the liabilities, they didn't.
In large part that 105% was an assumption on future returns on assets held, throughout the period of the pension holiday an ever increasing amount of that 105% was such an a assumption. Problem is they assumed wrong.

ps. they never took a holiday in C they continued to take a holiday in A and B between 2000 and 2003 after the two schemes were merged in 2000.