PENSION PROPOSALS REJECTED

[fishtank]

LTB 398/13 Pension Proposals Rejected


To: All Branches with Postal Members

Dear Colleague
PENSION PROPOSALS REJECTED
The Postal Executive met this week and rejected the formal proposals from the Royal Mail Group and Post Office Limited for further pension changes.

The Union communicated this position to both companies and reaffirmed that any attempt by either company to take executive action on pensions will be met with a national industrial action ballot across the postal constituency.

The Postal Executive has agreed that once the companies trigger the legal consultation process we will arrange a Special Conference. However, the purpose of this Conference will be to consider the overall position in all national talks and privatisation, as well as pensions. By recognising the linkage between all of these issues we will place ourselves in the best possible position to protect our members and the future of UK postal services.

In the meantime, the Union has met with our lawyers to consider the legality of the proposals and the actions of the Trustee Board and Government. The lawyers are also looking closely at the European Commission's ruling on the granting of state aid.

Finally, we will be seeking support from political parties to raise this issue in parliament and ensure there is a thorough enquiry into the whole question of this latest pension development, its linkage to the previous Government settlement and European state aid.
Further information will follow in due course. Any enquiries on the above LTB should be addressed to the DGS (P) Dept.
Yours sincerely


Dave Ward Billy Hayes
Deputy General Secretary (Postal) General Secretary

[fishtank]

‘No more pension changes’ warns CWU executive

7th June 2013

http://www.cwu.org/news/archive/-no-mor ... utive.html" onclick="window.open(this.href);return false;


Members of the union's postal executive this week firmly rejected proposals from Royal Mail to introduce yet more changes to employees' occupational pensions.

Just over a year after the Postal Services Act produced a solution to the company's legacy deficit, bosses have come forward with yet more proposals for reforms.


Deputy general secretary Dave Ward said: "We have communicated this position to both Royal Mail Group and Post Office Limited and reaffirmed that any attempt by either company to take executive action on pensions will be met with a national industrial action ballot across the postal constituency."

The postal executive has further agreed to arrange special conference on the issue and also to "consider the overall position in all national talks and privatisation, as well as pensions." Dave explained, adding: "We will be seeking support from political parties to raise this issue in Parliament and ensure there is a thorough enquiry into the whole question of this latest development."

In the meantime, the union has also met with its lawyers to consider the legality of the proposals and the actions of the Trustee Board and Government. The lawyers are also looking closely at the European Commission's ruling on the granting of state aid

[UnhappyGremlin]

Well, the fight starts.
I think IA is inevitable now.
Especially as there are further reasons looming for it.
And I think it is impossible to even imagine RM will back down even a minor amount, to a point where we may find it acceptable to stomach what they want.

[fishtank]

And I think it is impossible to even imagine RM will back down even a minor amount, to a point where we may find it acceptable to stomach what they want.

It will be interesting to see what their response to such a rapid and unequivocal rejection will be.
It's possible they may ramp up the threats,threaten to close the scheme altogether or increase employee contributions?
You would think if they know they are heading for a massive battle over pensions anyway they might as well set their sights on the bigger prize.

[UnhappyGremlin]

And I think it is impossible to even imagine RM will back down even a minor amount, to a point where we may find it acceptable to stomach what they want.

It will be interesting to see what their response to such a rapid and unequivocal rejection will be.
It's possible they may ramp up the threats,threaten to close the scheme altogether or increase employee contributions?
You would think if they know they are heading for a massive battle over pensions anyway they might as well set their sights on the bigger prize.

Of course, they may be doing what they have done so often in the past.
That is; they propose X, which is extreme, and then 'back down' to Y in the hope we accept it, when that was the desired aim in the first place.
Their response will be interesting to say the least, I doubt they expected to get told to sod off at that point, rather that the union would have tried talks.
The union are obviously of the opinion that, like me, they believe this is the first shot in repeated barrage of attacks on the scheme, which they will continue relentlessly, until it is worthless, literally.

[windermeredave]

so What happens if RM decide to close the scheme?

[TrueBlueTerrier]

Strike !

[RobertT]

so What happens if RM decide to close the scheme?

The most probable outcome is that the final salary/average salary schemes will effectively become deferred in the same way as if we all left the company and will then increase each year with inflation.
Under auto-enrolment rules, RM have to offer their staff a pension of some kind, which will almost certainly be a defined contribution scheme similar to a personal/stakeholder pension. What percentage of our pay they will pay in is anyone's guess.

[fishtank]

Under auto-enrolment rules, RM have to offer their staff a pension of some kind, which will almost certainly be a defined contribution scheme similar to a personal/stakeholder pension. What percentage of our pay they will pay in is anyone's guess.

We don't have to guess.
It already exists.

https://www.zurich.co.uk/royalmaildcpla ... uction.htm" onclick="window.open(this.href);return false;

[RobertT]

We don't have to guess.
It already exists

https://www.zurich.co.uk/royalmaildcpla ... uction.htm" onclick="window.open(this.href);return false;

That is the most likely destination for our future pensions, but there are actually 4 potentially different contribution levels to the Zurich scheme at the moment, click on 'plan guide' from your link at scroll down to page 8. Non of those levels of RM contribution will necessarily apply in the future. They could be higher, lower or stay the same.

[UnhappyGremlin]

Strike !

Count me in.

[Godric]

Strike !

Count me in.

i'm in

[nataddick]

I think it is inevitable that RM will close the existing scheme and 'invite' members to join a defined contribution scheme - possibly with modifications to the existing Zurich plan. This way they can slash their costs from the current 17% p.a to around approximately 8%. Up go the newly privatised RM' profits to shareholders and down goes morale again. Masterstroke !

They will use mortality, investment returns, quantitative easing (annuity rates have fallen as a result) and risk as the reasons for the change - it is just a question of when they do it - not if.

The letter from Jon Millidge does not explain why the RMPP scheme has deteriorated so suddenly in just 12 months when is was then fully funded ? Also the bullshit about the assets left in the plan (surplus) - 'These assets come, in a large part, from Company contributions in previous years' - a suggestion that is their money and they can do what they like with it. The contributions once paid into the plan belong to the members and are to be used by the Trustee as such.

This is an unfounded claim and they cannot possibly know that this is the case. The company did pay extra contributions known as deficit payments into the scheme but only because of the many years of contributions holidays taken earlier. It could equally be argued that these additional payments were actually absorbed into the RMSPS when the Government took it over. At that point the scheme was in deficit anyway, so I don't see how they can now claim that they effectively generated the surplus. It is simply not true. We, members could claim that we have a minimum 6% share of it based on our own contribution rate since that time.

No the surplus was left for a reason - to maintain the final salary link post 1 April 2012 at RPI + 1% (per the accounts) - the now rejected proposal only offered an RPI solution - so what happens to the funds left over and above RPI ? No doubt retained to reduce the level of contribution required in future years.

RM know that this a complex area and that they can use smoke and mirrors to wriggle out of the promises previously made : Download Pensions News - Special January 2012

http://www.royalmailpensionplan.co.uk/5 ... unications" onclick="window.open(this.href);return false;

Page 3 states
We expect these changes to take effect as at the end of 31 March 2012, subject
to European Commission approval – we refer to this as the ‘effective date’ in this
newsletter. Members’ benefits built up to the effective date will be transferred
to a new public service pension scheme backed by Government. This scheme
will be called the Royal Mail Statutory Pension Scheme (RMSPS). Benefits earned
after the effective date (as well as some increases to benefits earned before the
effective date) will be built up within the RMPP as they are currently. The pension
proposal within the Act will not result in any change to the level of contributions
that you pay or the way in which they are collected.

I think the above statement was taken by most people to mean there would be no changes in the final salary link under the new RMPP. RM could argue that the final salary link was not included in the 'some increases' but it then begs the question - Why such a precise wording and what increases to benefits was it referring to ?

[Glenno]

Re: Is the Pre 2008 Pension unchanged?

Postby Glenno » Fri Jun 07, 2013 8:57,pm
Bloody hell, this is a smoke & mirrors attack by RM and associates, talk about baffle them with bullshit!!!
Pensions are deferred earnings, you agree 6% of your wages RM agree 17%, this is a long term contract that we have all entered into, but for some strange reason RM want to DIP into the latest pot (after the historical deficit ) was resolved, the 2.2 billion was set aside to keep the link to the final salary open, what right have RM to ask for this money back. Do I or you have the right to ask for a pension holiday or can I not pay in this week cos I can't afford it, this is a bloody disgrace and what Dingo is saying rings true, if ever there was summit to fight for THIS IS IT
nataddick
This is exactly what I was trying to say, but you put it much better than me