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Secret Royal Mail plan to axe final salary scheme..and save ?1.5billion PDF Print E-mail
Tuesday, 24 July 2007

It is claimed that Royal Mail workers will have their pensions slashed unless they work five years longer under secret plans revealed by the Daily Mirror today.

Read the full article at http://www.mirror.co.uk/news/topstories/2007/07/24/the-mail-pension-robbers-89520-19507647/

And Royal Mail's response in a letter to the Communication Workers Union:

Ray Ellis
Assistant Secretary
Communication Workers Union
150 The Broadway
SW19 1RX

People and Organisational Development
148 Old Street

Tel: 020 7250 2835
Fax: 020 7250 2886
Dear Ray

As you know, back in February we publicly announced that we were to consult on the future of the Royal Mail pension provision for both existing employees and new recruits. Consultation was to take place from April ’07 for six months and would cover the pension arrangements of everyone in the company including senior managers.

Over 10 meetings have since taken place with the Communication Workers Union present so that, before we put forward any formal proposals for consultation, we have a clear view of the solutions that you as the CWU would like to see put in place. It is clear from all of those meetings that you understand the urgent need to tackle these issues in order to protect our peoples’ future pensions.

Yesterday morning you called me to tell me that you had received a copy of a proposal, one of many that we had looked at and considered, and I informed you that we had since moved on from that because of further input from all the parties being consulted, including the CWU. I confirmed to you that we had already planned to destroy those printed proposals.

A few hours later we received a call from the Daily Mirror to say that they had been sent a copy of this discarded proposal.

Clearly it would seem that there has been a breach of trust by the CWU and the article - and the union’s comments in it - are in great danger of misleading our people on what is a very important issue for them.

As you know, over the last few weeks you, Norman Candy, Jane Loftus, Mark Boalch and Bill Steel have put forward a number of proposals that you believe would help solve our pension issues and you have asked us to cost them out for you.

You have made it clear, on a number of occasions, that you are prepared to be supportive of a range of changes to the pension arrangements for our existing people because you understand the financial position the company is in - and indeed your suggestions have included a move to a Career Average Revalued Earnings scheme and an immediate move in the retirement age from 60 to 65.

However, crucially, you have also made it clear that you are only prepared to be supportive of this if we accept your proposal to keep open the defined benefits scheme to new recruits as per your union conference motion.

So it would seem that the main difference between us is that we firmly believe that our people would prefer to protect their own pensions than worker longer and pay more to protect a defined benefits scheme for new recruits. The company has already made it very clear that our number one priority is to protect as far as possible the pension provision for our existing employees.

You accept, and have asked us to cost out for you, that for the DB scheme to be kept open to new recruits, then our existing people would have to work longer and pay more into the scheme because of the future risk to the company of not closing the scheme.

We have been clear with you all along that we are concerned that in order to support your conference motion you are proposing that we ask our existing employees to pay more and/or work longer when all our feedback is that they would prefer to close the scheme and protect their own pensions as much as possible.

The article in today’s Mirror did not reflect any of this. We now see that this article has been placed on the CWU’s website.

As you know we have not yet put any proposal forward to the pensions consultation group and the formal consultation will not take place until this happens. Clearly at this stage we are still considering the views of the CWU and all other stakeholders and continue to work with you to develop the proposals.

We are deeply disappointed at how this has situation has arisen as it is very much at odds with the positive contribution that you and your team have made to the consultations forum and our private discussions.

We can only conclude that it is an attempt by the union to influence the current position on industrial action.

Given the public nature of today’s articles we have no choice but to copy this letter to our people and would suggest that we get together soon to discuss where we go from here.

Yours sincerely,

Jon Millidge
Director Employee Relations

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