A meeting of the Postal Executive was held to respond to Royal Mail’s unacceptable plans for pension reform.

As a first step the Union have agreed to hold a consultative (individual member) workplace ballot across all businesses, with a recommendation to reject the company’s pension plan.

The overall timetable for the workplace ballot is as follows:

Ballot opens:           7th March 2008

Ballot closes:           19th March 2008

Ballot declared:        20th March 2008

Specific details of how the ballot will be undertaken will be sent out in due course. Further individual member communications will also be sent out to support the consultation ballot.

 

Royal Mail Group Pension Decision

At a meeting of the pensions consultative forum Royal Mail announced a decision to proceed with the implementation of its proposed changes to pension arrangements. The company is sending a letter to all staff today confirming its intentions. Royal Mail intend to take a proposal to the pension scheme trustees next week which does not differ in any significant respect to the key changes it proposed in the consultation period which ended on 16th January, i.e.:

Closure of the defined benefit scheme to new starters with effect from 1st April 2008 (the original date of 31st January was postponed to allow further consultation with the unions as previously reported).

Royal Mail Group intends to introduce a defined contribution scheme for new starters,  based on a tiered employee / employer contribution rate. New employees will not be able to join this scheme until they have completed 12 months employment. Full details of the DC arrangements will be circulated shortly.

Closure of the existing final salary scheme with effect from 1st April 2008 and its replacement with a career salary defined benefit scheme (previously referred to as a Career Average Revalued Earnings scheme) from that date. This means that for existing scheme members pensionable service after 1st April 2008 will be calculated on the basis of actual pensionable earnings in each given year uprated by inflation (as measured by the RPI) capped at 5%. Accrual rates and employee contribution rates remain unchanged. For service up to 1st April 2008 pension will remain based on final salary at the time of retirement or leaving the business (one of the changes negotiated by the union prior to the consultation period).

Increase in retirement age from 60 to 65 with effect from 1st April 2010. From that date members taking pension before reaching the age of 65 would suffer an actuarial reduction in that portion of pension accrued after 1st April 2010. Pension accrued before that date could still be taken unreduced from the age of 60

Union response

Both CWU and Unite/CMA representatives expressed disappointment that Royal Mail had not been prepared to modify its proposals in light of feedback during the consultation exercise. The vast majority of the feedback received by the company (around 70%) was in the form of cards produced by CWU branches or coordinating bodies urging a rethink of the proposals and proposing alternatives. The company does not appear to have received any support for its proposals from any contributor to the consultation exercise.

CWU has made it clear that it does not accept Royal Mail proposals and will not accept change without agreement. It remains the union’s position that any change to pensions must be agreed with the union and voted on by our members in the same way as any other change to terms and conditions.