LTB 440/18 - Royal Mail Share Incentive Plan Partnership and Matching

[TrueBlueTerrier]

LTB 440/18 - Royal Mail Share Incentive Plan Partnership and Matching

No. 440/18

2nd August 2018



Dear Colleague,

Royal Mail Share Incentive Plan Partnership and Matching

The DGS(P) Department has received a number of enquiries regarding material Royal Mail has issued concerning a new Partnership and Matching Scheme which, in the Company’s words offers “a flexible way to invest in Royal Mail shares”.

Partnership and Matching is a new element of the Royal Mail Share Incentive Plan that allows employees to use their pre-tax pay to purchase Royal Mail shares ‘Partnership Shares’ on a monthly basis. Royal Mail will then add to the shares by giving you ‘Matching Shares’ for free. Those interested need to apply by Friday 17th August by logging on to the Employee Share Plan portal http://www.royalmailemployeeshares.co.uk" onclick="window.open(this.href);return false; or by calling the Employee Shares Helpline on 0800 012 12 13.

The new share arrangement offers similar tax advantages to SIP free shares which were first allocated to eligible employees at the time of privatisation in 2013. In October of this year, those owning free shares allocated in October 2013, will for the first time, be free to sell these shares without incurring any tax or national insurance deductions.

Branches will be aware that the CWU opposed Royal Mail privatisation in 2013 and that Union policy is to support full renationalisation of Royal Mail Group and reintegration of the Post Office.

The CWU has never agreed the share scheme or negotiated over its operation. What members therefore choose to do in relation to these shares is entirely a matter for the individual concerned.

The Union is not in a position to offer any financial advice and any questions about the operation of the share scheme should be addressed to Royal Mail and/or the scheme administrator Equiniti.

Any enquiries in relation to the content of this LTB should be addressed to the DGS(P) Department.

Yours sincerely,



Terry Pullinger

Deputy General Secretary (Postal)

18LTB440 Royal Mail Share Incentive Plan Partnership and Matching http://emails.cwu.org/t/d-l-bddiljk-ztkjiuyil-i/" onclick="window.open(this.href);return false;

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[Patrick301]

well i done the last share thing when we had money stopped out wages and bought at a certain price
seems to be a good investment
but i'm in 2 minds about this
from what i cam make out is you can only buy a few each month and they match it or something
but you can't sell till 5 years
so what you can sell is constantly changing
at 58 not sure if its for me , so for that reason and others ,,,,,I'm out
whats everyone else saying , or thinking
is it worth going for it or what

[wallop]

At 58 it might be a good idea as if i read the booklet correctly once you're past 60 which they consider retirement age you're off the hook for tax and ni if you sell them.

[JKSmudge]

At 58 it might be a good idea as if i read the booklet correctly once you're past 60 which they consider retirement age you're off the hook for tax and ni if you sell them.

yes - after 60 you are a 'good leaver' with no tax or NI to pay plus you kepp your matched shares too.

I'm just a year younger and I am definitely buying the max amount. Seems a sound investment esp with 2 free 'matched' shares per month. Extra bit of cash for when I retire

[ihatedogs]

Smudge/wallop, am I reading things wrong? Reading the booklet now & page 13 under the heading "how do you define retirement for the purpose of tax exemption when leaving Royal mail?"
The answer given is "resignation aged 60 or over"
So, am I right in saying you cannot avoid tax/ni on any shares you buy that you've had for less than five years if you're still with the company?

[RobertT]

Yes!

The rules with this scheme are the same as with the free shares as they held within a Share Incentive Plan(SIP).

You have to hold each batch for 5 years to get the full tax free benefit.

You're only exempt if you're a 'good leaver' in which case one of the following must apply:

Leave via VR
Leave via IHR
Leave aged 60+
RM is sold
You die

[JKSmudge]

Yes - what Robert says above is correct.

What I would say is that shares should be held for medium -to long-term anyway. Plus you have to take account of the fact that any shares you hold should pay a dividend twice a year. Currently the shares are paying out just over 5% pa of the value.... try getting that from a savings account !

Only invest if you are happy to play the long game, but when you consider buying the maximum amount is only going to cost £15.69 per week out of pay packet amd yet many people spend that on scratchcards / lottery / betting - I know what I prefer.

[toomuchcoke]

What I would say is that shares should be held for medium -to long-term anyway. Plus you have to take account of the fact that any shares you hold should pay a dividend twice a year. Currently the shares are paying out just over 5% pa of the value.... try getting that from a savings account !.

Well I'm getting 5% on my current account right now as it happens ... However when you consider the tax break and the partnership shares then it's more like a 9% dividend yield I believe if you invest via this scheme?

It was that little nugget that finally swung me from maybe-yes/maybe-no to deciding to go for this scheme, though only at a rather minimal amount. Don't want too much of my net-worth tied up in RMG.L shares whilst I'm working for them, however they're only a fraction over 26% of my share portfolio at the moment and falling pretty much constantly as I buy more shares in other companies so I figured this was worth a small amount - the extra dividends thus generated will ultimately help me buy more shares in other companies and thus help move my retirement forwards.