Letter to Dave Ward

[stephen500]

Dear Dave,
I have been in the union since 1977 and have been a rep in the past.
I have to say that i will actively campaign against and have voted no to this agreement.
I am sure that you set out with the best of intentions, but to me this is the worse agreement i have ever seen this union enter into in my time in the union.

Instead of being an agreement, it is an agreement that instead of dealing with the issues, shunts many of the issues into the sidings for future negotiations.

I understand that you say that you have not reached agreement on these issues, but what you do do when you seperate this issues is weaken our position.

Some examples. Do you really think that when it comes to d2d that on a national ballot that the mail centre opgs will back the postman in a ballot? If pension reform was rejected would the union get a postive response from its members on that sole issue?

On monthly pay the cwu document states that the working group will look at 'how to implement' monthly pay, it seems to me that the decision has already been made.

It also appears to me that the £175 due to be paid from monies already earned has just been a smoke screen to disguise the very fact that our members have been deprived of over £400 in back pay since Apr 07 and this has happened on previous occasions.

So in reality we are not getting 5.4%, but a much lower figure over six months. Further more the 1.5% due in 2008 does not even match inflation now.

This is important to the membership. In the pension illustation i have just received i have been given several illustrations, from pay increases set at rpi to minus 1% rpi. I am quite confident that over the years RM will manage to keep pay rises below rpi and therefore drastically reduce our pension over time.

My pension illustration of -1% rpi will result in my pension being cut by £1300 (per annum) and my lump sum by almost £4000.

This proposal at a time when Adam Crozier receives £140,000 in leiu of pensions!

On to flexibility, we all know what that means...bascially over time will probally be drastically reduced eroding earning further.

For Mail centres that may result in some loss of earnings, but for deliveres it will be catastrophic, sharing rounds for those on A/L and S/L will wipe out the small amount of overtime that delivery members get. Then if d2s are lost most will see a further reduction of £1000 pa.

What of the job and finish agreement that these opgs had?

Rm sought to cease the second delivery and used it as a carrot to get the agreement in. Now that they have it in, they now seek to withdraw the members earned benefit!

So to conclude, seperating the elements does nothing but weaken the postion of the union and therefore its members and the ones who can least afford the changes will be worse off. I think we can aptly re-name this agreement 'the way forward two'.

If it results in the same changes that that agreement brought about then i predict the union membership will not stand idly by and will react against those who recommended it as they did against John Keggie.
Stephen
Cwu

cc: cwu area rep Chester.

Please take the time to read the article found in the financal Times re pensions, It implies that our pensions would have been protected by the pension protection fund and that even with the measures taken the pension fund will be in deficit by £2.9 billion pound in 17 years time!
It even suggests that the reason we have not been privatised is not idelogical or even union pressure, but more to do with the government not wanting to take on the £5 billion pension deficit.

http://www.ft.com/cms/s/0/9775ffd2-90c0 ... ck_check=1

"Postal deal signed, but will it deliver?
By John Ralfe

Published: November 12 2007 02:00 | Last updated: November 12 2007 12:08

Royal Mail and the Communication Workers Union have just agreed a package of changes to pay, working practices and pensions to end industrial action. The Royal Mail Pension Plan is the UK's largest corporate pension scheme by members - 450,000 - and second largest by IAS19 liabilities - £28bn (€40bn) - behind its privatised cousin, BT Group.

With wafer-thin margins and increasing competition, containing £28bn of pension liabilities, a £5bn deficit and £720m annual cost of new pension promises, is crucial to Royal Mail's future.

Is the agreed deal enough?

Closing the defined benefit plan to new members will save about £20m in year one and moving from final salary to career average for future pensions saves a further £50m a year. Raising the retirement age from 60 to 65 by 2010 is the biggest saving - £160m a year - but is also the most controversial. Royal Mail is now starting a formal consultation with members on the pension changes.

Pensions for Royal Mail senior managers, who are in a separate plan, are much more generous than for other employees - the annual pension promise is 1/45th not 1/60th of salary, allowing them to earn a 2/3rds pension over 30 not 40 years. The real issue for Royal Mail is not reducing the cost of future pension promises but how to plug the £5bn deficit for pensions already promised.

Moving to career average for existing pensions - abandoned in the face of union opposition - would have meant a one-off reduction in liabilities and deficit, estimated by the Communication Workers Union as £1.6bn, 30 per cent of the £5bn deficit. Unlike a private company Royal Mail cannot borrow to make a one-off contribution. It is currently making inflation-linked deficit contributions of £260m a year - versus only £233m operating profit in 2007 - with the aim of clearing the March 2006 deficit over 17 years, as agreed with the trustees and the regulator Postcomm. A £1bn escrow account was also set up to provide extra protection for members if Royal Mail became insolvent.

But the March 2006 actuarial valuation understated liabilities and the deficit by £2.2bn against the market IAS19 position and understated the annual cash contributions required to plug the deficit. Even if this cash drain is sustainable, the payments are not enough to clear the £5bn IAS19 deficit - after 17 years there will still be a £2.9bn IAS19 deficit.

Royal Mail is relying on the continuing equity bet - 65 per cent of assets, or £15bn, are in equities - to clear its pension deficit. Are the board, the government and Postcomm managing the implications for customers and taxpayers of the huge risk in this equity bet or just keeping their fingers crossed?

Customers are already paying for the pension deficit through higher stamp prices, agreed with Postcomm in the 2006-2010 price control review. A complex mechanism also allows price rises if the deficit increases beyond a certain point - so customers remain on-the-hook and should brace themselves for further price rises.

For many years the plan held 80 per cent equities, but in the year to March 2007 it moved to 65/35 equities/bonds and property and bought £2.5bn index-linked gilts. But just to pay the £800m annual pensions needs £16bn of bonds/property at a 5 per cent yield - double the current bond/property allocation.

Royal Mail adopted tougher longevity assumptions in 2006, a four-year increase over 2005, including "medium cohort" future improvements, adding £3bn to £4bn to liabilities and deficit. These are at the tougher end of the assumptions used by most private companies, but there may be further improvements with each extra year adding about £1bn to liabilities.

The government has £2.9bn committed loan facilities to Royal Mail, supposedly at "market" interest rates. Despite EU competition rules it is difficult to see that the government could allow Royal Mail to become insolvent. If it did, the good news for members is that they would enter the Pension Protection Fund and receive compensation in line with the PPF rules. The bad news is that such a huge claim would sink the PPF - the PPF's latest consultation document discusses imposing a further levy on schemes with deficits large enough to sink it. Privatisation of Royal Mail - the last utility in public ownership - has been discussed in recent months, especially by its chairman, who is keen to see employee share-ownership. This cannot work unless the government takes over the existing pensions, which would be illegal under EU competition rules.

The government does not guarantee Royal Mail and is committed to treating it like any other commercial company. But judged on its own balance sheet, and without an implicit government guarantee, Royal Mail is, sadly, technically insolvent - £2.3bn negative net assets at March 2007, including the £5bn pension deficit.

John Ralfe is an independent pension consultant. This is based on a research note written for RBC Capital Markets."

[strangler]

Well said Stephen, an interesting article too.

[k979aaa]

The pay deal is 2.7% over the year!. The £175 is from the E.S.O.S we have already earned!. D2D you will be shafted but not by the mail center's but by our very own union and if the mail center's think they can vote for this with impunity for god help them when eventually they will and i mean will be sent to the delivery office to take out a walk! .FOR THIS IS NOT THE END IT IS THE BEGINING OF THE END IF THIS "AGREEMENT" GET'S VOTED IN VOTE NO

[stephen500]

I totally agree, there are some very short sighted members on the mail centre and delivery side who think that the deal won't affect them and so they will vote yes.
I just wish they understood that unless we as a union remain united, across all functions, then they will pick us off one by one.