NATIONAL PENSIONS BRIEFING REPORT

[pcb]

Lovejoy: Have recieved this from my Branch Sec, as you can see we have already been shafted. 60 day consultation = time to convince us its a good deal and that HQ haven't already agreed changes. Smoke and bloody mirrors. HQ are pushing Royal Mails side of this. Cannot believe they have done this! What a bloody farce, HQ should realise that the pension is the one thing we all look forward to. Lovejoy like I have said before the union have rolled over and sold our pensions down the river. The decoupling was a diversion the concessions had already been agreed. How much longer are you going to keep up the pretence that we actually have any say in this? How am I going to face the members who stood on that picket line knowing the union has already sold their pensions down the river.
There is no talk by HQ of those already in the final salary keeping that scheme and paying more in subs and new entrants being entered into the CARE. They couldn't protect FCUKING pensions.

1. WILL ILLUSTRATIONS BE PROVIDED SO PEOPLE CAN UNDERSTAND WHAT THEY WILL LOSE ?

We have asked our actuarial advisors to prepare some illustrations, based on more realistic projections than those hither to used by Royal Mail.

2. WHAT WILL THE ACTUARIAL REDUCTION BE FOR THOSE TAKING THEIR PENSION BEFORE AGE 65 ?

The standard actuarial reduction for each year the pension is taken early is just under 5%. There is of course no reduction for service up to 1st April 2010.

3. EXACTLY WHY DOES THE PENSION DEFECIT HAVE TO BE PAID OFF IN 17 YEARS ?

Royal Mail was previously paying the deficit off over a period of 40 years. Legislative changes mean that the maximum period normally allowable now is 10 years. Royal Mail had to negotiate an extension of this period with the trustees.

4. WHY ARE WE STILL QUOTING FIGURES FOR THE PENSION DEFICT WHEN MANY FTSE COMPANIES NOW HAVE SURPLUSES DUE TO THE BOUYANT STOCK MARKET ? WHAT ABOUT RMG SCHEME ?

The deficit reflects the position at the 2006 valuation. The next valuation is not due until 2009. The current contribution to the deficit is £270 million per year and going forward for each additional year of service £581 million per year a total of £851 million per annum. The cost is not only a result of worse than expected performance of investments but as a result of significant increases in longevity. It would be irresponsible to rely on a future valuation significantly improving the position

5. THE UNION ARE ASKING FOR THE ESCROW MONIES TO BE PUT INTO THE SCHEME. SURELY WE SHOULD NOT SETTLE UNTIL THIS IS SORTED OUT ?

The problem does not solely relate to the deficit. We believe it is right that the Escrow money should be used to reduce the deficit (it would not remove it - the deficit is currently £3.5 billion, the Escrow money is £850 million) but this would not solve the problem on its own.

6. WHAT ARE THE LIFE EXPECTANCY FIGURES UPON WHICH THE DEFEICT IS BEING CALCULATED ? WHAT IS THE LIFE EXPECTANCY FOR A POSTAL WORKER ?

We have been advised by the actuaries that life expectancy is calculated on actual experience. The current projections are startling (life expectancy at 60 for a man is 26 years, longer for a woman).

7. THE ASSUMPTION IS THAT THE EXISTING FINAL SALARY SCHEME REMAINS FOR SERVICE UP TO 2010 IF TAKEN AT AGE 60 ? YES OR NO ?

No. The existing final salary terms remain in place for service up to 1st April 2008. Service between 1st April 2008 and 1st April 2010 can be taken unreduced at 60 but will be on a CARE basis.

8. HOW GOOD IS THE AVC SCHEME AND WHAT INFORMATION CAN BE PROVIDED TO SHOW HOW MUCH WOULD NEED TO BE PUT IN TO GET THE SAME AS THE CURRENT BENEFITS SO A MEMBER CAN LEAVE AT 60 ON THE SAME PENSION AS HE WOULD NOW ?

WE intend to discuss AVC arrangements in detail with RM during the consultation period. It is our intention to provide illustrations on the cost of achieving the same level of pension as would currently be expected at 60 as well as illustrations on how much longer an individual may need to work beyond 60 to achieve the current expected level of benefit (as you will appreciate for most people this is not until 65 and for longer service members will be significantly less than that).

[lovejoy]

Lovejoy: Have recieved this from my Branch Sec, as you can see we have already been shafted. 60 day consultation = time to convince us its a good deal and that HQ haven't already agreed changes. Smoke and bloody mirrors. HQ are pushing Royal Mails side of this. Cannot believe they have done this! What a bloody farce, HQ should realise that the pension is the one thing we all look forward to. Lovejoy like I have said before the union have rolled over and sold our pensions down the river. The decoupling was a diversion the concessions had already been agreed. How much longer are you going to keep up the pretence that we actually have any say in this? How am I going to face the members who stood on that picket line knowing the union has already sold their pensions down the river.
There is no talk by HQ of those already in the final salary keeping that scheme and paying more in subs and new entrants being entered into the CARE. They couldn't protect FCUKING pensions.

1. WILL ILLUSTRATIONS BE PROVIDED SO PEOPLE CAN UNDERSTAND WHAT THEY WILL LOSE ?

We have asked our actuarial advisors to prepare some illustrations, based on more realistic projections than those hither to used by Royal Mail.

2. WHAT WILL THE ACTUARIAL REDUCTION BE FOR THOSE TAKING THEIR PENSION BEFORE AGE 65 ?

The standard actuarial reduction for each year the pension is taken early is just under 5%. There is of course no reduction for service up to 1st April 2010.

3. EXACTLY WHY DOES THE PENSION DEFECIT HAVE TO BE PAID OFF IN 17 YEARS ?

Royal Mail was previously paying the deficit off over a period of 40 years. Legislative changes mean that the maximum period normally allowable now is 10 years. Royal Mail had to negotiate an extension of this period with the trustees.

4. WHY ARE WE STILL QUOTING FIGURES FOR THE PENSION DEFICT WHEN MANY FTSE COMPANIES NOW HAVE SURPLUSES DUE TO THE BOUYANT STOCK MARKET ? WHAT ABOUT RMG SCHEME ?

The deficit reflects the position at the 2006 valuation. The next valuation is not due until 2009. The current contribution to the deficit is £270 million per year and going forward for each additional year of service £581 million per year a total of £851 million per annum. The cost is not only a result of worse than expected performance of investments but as a result of significant increases in longevity. It would be irresponsible to rely on a future valuation significantly improving the position

5. THE UNION ARE ASKING FOR THE ESCROW MONIES TO BE PUT INTO THE SCHEME. SURELY WE SHOULD NOT SETTLE UNTIL THIS IS SORTED OUT ?

The problem does not solely relate to the deficit. We believe it is right that the Escrow money should be used to reduce the deficit (it would not remove it - the deficit is currently £3.5 billion, the Escrow money is £850 million) but this would not solve the problem on its own.

6. WHAT ARE THE LIFE EXPECTANCY FIGURES UPON WHICH THE DEFEICT IS BEING CALCULATED ? WHAT IS THE LIFE EXPECTANCY FOR A POSTAL WORKER ?

We have been advised by the actuaries that life expectancy is calculated on actual experience. The current projections are startling (life expectancy at 60 for a man is 26 years, longer for a woman).

7. THE ASSUMPTION IS THAT THE EXISTING FINAL SALARY SCHEME REMAINS FOR SERVICE UP TO 2010 IF TAKEN AT AGE 60 ? YES OR NO ?

No. The existing final salary terms remain in place for service up to 1st April 2008. Service between 1st April 2008 and 1st April 2010 can be taken unreduced at 60 but will be on a CARE basis.

8. HOW GOOD IS THE AVC SCHEME AND WHAT INFORMATION CAN BE PROVIDED TO SHOW HOW MUCH WOULD NEED TO BE PUT IN TO GET THE SAME AS THE CURRENT BENEFITS SO A MEMBER CAN LEAVE AT 60 ON THE SAME PENSION AS HE WOULD NOW ?

WE intend to discuss AVC arrangements in detail with RM during the consultation period. It is our intention to provide illustrations on the cost of achieving the same level of pension as would currently be expected at 60 as well as illustrations on how much longer an individual may need to work beyond 60 to achieve the current expected level of benefit (as you will appreciate for most people this is not until 65 and for longer service members will be significantly less than that).

Sorry mate

I understand that they are the questions asked but wheres the full report? Bit misleading!

[jafferpants]

I know i'm starting to sound like a broken record but here we go again. The final salary scheme will close in april. this will be replaced by the care scheme. they are two seperate schemes. your past benefits are safe not because of anything the union has done but because of the law. The CARE scheme will be worked on the money you earn from next april and not from when you first started and will run till your 65. if you want to go at 60 you will lose 5% for every year you go before 65 eg 25%. the younger you are the more you will lose by going from a final salary to a CARE scheme. In my language its the f***ing stitch up of the centuary. Yes you will get a vote on it and NO it wont make any difference it''s a done deal mark my words.

PS lovejoy if you knew where my info came from you'd stop cluching at straws and realise it's all over bar the shouting

[POSTMAN]

I know i'm starting to sound like a broken record but here we go again. The final salary scheme will close in april. this will be replaced by the care scheme. they are two seperate schemes. your past benefits are safe not because of anything the union has done but because of the law. The CARE scheme will be worked on the money you earn from next april and not from when you first started and will run till your 65. if you want to go at 60 you will lose 5% for every year you go before 65 eg 25%. the younger you are the more you will lose by going from a final salary to a CARE scheme. In my language its the f***ing stitch up of the centuary. Yes you will get a vote on it and NO it wont make any difference it''s a done deal mark my words.

Write summin out and i'll make it a sticky pm it to me and i'll credit you for it,give us the full sp.
Also i was under the impression that a consoltation was going on so isn't it possile things couldchange?

[jafferpants]

Write summin out and i'll make it a sticky pm it to me and i'll credit you for it,give us the full sp.
Also i was under the impression that a consoltation was going on so isn't it possile things couldchange?[/quote]

the consultation is RM paying lip service to the law so that they can say all the procedures have been followed

[strangler]

Yes you will get a vote on it and NO it wont make any difference it''s a done deal mark my words.

Jafferpants do you have any info/ideas on how the pension 'ballot' may be worded in terms of 'options'.
You have already told us the final salary scheme is history come april and I`m convinced you`re right about this.
Are you saying that keeping this scheme will not be an option on the ballot paper or are you saying it`ll be an option on the ballot paper but would be completely disregarded even if 100% voted to keep it (putting to one side any consequences that might occur because of this)?
I`d also like your views on what both the union and RM are saying about the final salary scheme being unaffordable. Do you agree with this, what`s your opinion on this as I`m sure others will be interested to hear them.

[jafferpants]

Yes you will get a vote on it and NO it wont make any difference it''s a done deal mark my words.

Jafferpants do you have any info/ideas on how the pension 'ballot' may be worded in terms of 'options'.
You have already told us the final salary scheme is history come april and I`m convinced you`re right about this.
Are you saying that keeping this scheme will not be an option on the ballot paper or are you saying it`ll be an option on the ballot paper but would be completely disregarded even if 100% voted to keep it (putting to one side any consequences that might occur because of this)?
I`d also like your views on what both the union and RM are saying about the final salary scheme being unaffordable. Do you agree with this, what`s your opinion on this as I`m sure others will be interested to hear them.

HI STRANGLER If keeping the final salary scheme was an option there would be nothing to consult on. they have looked at members paying more to keep it going but at the present time it appears the amount in extra contributions you would need to pay makes it a non starter. The start of the problem goes back a long way. several years ago when the pension was 2 seperate schemes . The origanal scheme was in good health , while the second one was in the red.So RM paid the pension actuary a six figure sum to look in to the possibility of merging the 2 schemes to cover up the shortfall. The actuary's report said under no circumstances should you do it but RM ignored the advice they had paid for and did it anyway. Hey presto the second scheme is no longer in the red and guess what now it's one scheme it's showing a healthy balance. So much so that RM say hay lets take a pensions holiday and the rest is history. Add to that the 5billion that our wonderfull labour party takes out of the schemes every year and the result is what you have now and what really pisses me off is none of this was our doing but as sure as hell we are going to pay for it! So in a nutshell the scheme is no longer affordable but purely for the reasons i have already stated. In relation to the years when the stock market was falling, dont let anyone fob you off with that old bollocks the origanal scheme left as it was had such a massive surplace it would have ridden that out with no problem.

[strangler]

Thanks mate, informative as always.

[ajohnstone]

Just what is the proposals for those of us who chose to buy extra years service through Add-Plan to get the maximum 40 year service pension . The Pensions hotline when phoned had no details of the changes to it , just have to wait and see , was the answer .
Those who have been buying extra years have been paying an actuary determined price ( often amounting to double contributions) on the premise of Maximum Pension at 60 , not 65 and not with an actuary reduced amount at 60 , just what is the financial liability is there for this Individual contractual agreement with Royal Mail .
Can someone tell me the legal obligations of Royal Mail when it freely entered with individual staff members an additional agreement to pay Maximum Pension at 60 , something separate from the normal collective agreement.

[baldrick]

Good question. I'm in the same position and don't know the answer either. Does anyone?

[johno47]

This new pension will be based on the money you earn from next April, if that is so then your pension wont be much due to the fact that RM are already reducing the overtime and so reducing your earning power, and if they get team working in we will be doing the overtime for nothing, and also why arent the CWU pressing the goverment to give back the 5.2 billion it took out of this business whilst taking a 13 year pension holiday, i am sure that money would put our pension back into recovery, as far as i am concerned the CWU and RM can throw as much waffle and figures at me as they like, I WILL STILL BE VOTING NO...UNITY IS STRENGTH.

[jafferpants]

Just what is the proposals for those of us who chose to buy extra years service through Add-Plan to get the maximum 40 year service pension . The Pensions hotline when phoned had no details of the changes to it , just have to wait and see , was the answer .
Those who have been buying extra years have been paying an actuary determined price ( often amounting to double contributions) on the premise of Maximum Pension at 60 , not 65 and not with an actuary reduced amount at 60 , just what is the financial liability is there for this Individual contractual agreement with Royal Mail .
Can someone tell me the legal obligations of Royal Mail when it freely entered with individual staff members an additional agreement to pay Maximum Pension at 60 , something separate from the normal collective agreement.

When the final salary scheme closes in april you can still pay avc's but they wont be based on the final salary only your career average earnings. In regards to your pensions contract with rm it will state that rm have the right to alter terms and conditions as they see fit.that is the problem with all schemes, the law leans totaly in favour of the provider. The avc's you pay up untill april will still count towards your final salary.

[dvbuk55]

Just what is the proposals for those of us who chose to buy extra years service through Add-Plan to get the maximum 40 year service pension . The Pensions hotline when phoned had no details of the changes to it , just have to wait and see , was the answer .
Those who have been buying extra years have been paying an actuary determined price ( often amounting to double contributions) on the premise of Maximum Pension at 60 , not 65 and not with an actuary reduced amount at 60 , just what is the financial liability is there for this Individual contractual agreement with Royal Mail .
Can someone tell me the legal obligations of Royal Mail when it freely entered with individual staff members an additional agreement to pay Maximum Pension at 60 , something separate from the normal collective agreement.

When the final salary scheme closes in april you can still pay avc's but they wont be based on the final salary only your career average earnings. In regards to your pensions contract with rm it will state that rm have the right to alter terms and conditions as they see fit.that is the problem with all schemes, the law leans totaly in favour of the provider. The avc's you pay up untill april will still count towards your final salary.

I would imagine the additional payments would be calculated as additional years under the old scheme. It does beg a question though that you could only pay 40 years into any pension scheme so does that mean you could have paid for eg from 18 to 44 ie 26 years into the old scheme and then a further 21 years into the new scheme making 47 years in total to age 65?