Royal Mail Pensions Update

In expectation of imminent pension developments it is appropriate to up date Branches and CWU members on the current position.

We have now passed the 30th June date that was seen as a deadline for agreement between Royal Mail and the Trustee Board on the pension deficit and the need to fund this. As reported earlier in the year, we expect the latest valuation to show the actual deficit to be announced at around £10 billion.

The Continuing Relevance of “Time to Deliver”/CWU Solutions

At this juncture it is important to remind ourselves of the substantial work carried out by the Union in our document entitled “Time to Deliver” which was published in January 2010.  At that time “Time to Deliver” argued for the Labour Government to act on its morale obligation and take responsibility for the pension deficit.  In “Time to Deliver” we also set out CWU solutions, commented on the Hooper Report, gave an overview of legal and state aid issues and made the case that it was possible for Government to resolve pensions without privatisation or legislation.

We attach some key pages from the Union’s “Time to Deliver” document. 

We still believe that calling for a 40 year repayment schedule alongside a crown guarantee, remains relevant and should continue to be the cornerstone of Union policy.  This would secure our members’ existing and future pension arrangements without further detriment to benefits, whilst at the same time transform and stabilise the company’s finances both now and in the future.

Next Steps

We anticipate the actual pension deficit being announced very soon and that this is likely to coincide with the company and the Trustees making real progress on a repayment schedule.  We also anticipate that the Pensions Regulator will take a view as to the sustainability of any proposals to fund the deficit.  This in turn will reignite the Government debate.

Whilst at this stage we cannot be certain of exactly how the Government propose to deal with the deficit, we should assume that they will argue that a pensions solution must be directly linked to other recommendations in the Hooper Report and will therefore use any intervention to publicly push their privatisation plans.

The CWU has never accepted such a linkage, as is clearly shown in the ‘Time to Deliver’ extracts below.  We believe a solution to the Pensions Deficit is simple justice for the workforce, and must be implemented outside of other Government policy ambitions.

In further meetings with Government, Royal Mail and the Trustees, the Union will continue to highlight our proposed pension solutions at every opportunity, whilst continuing to oppose privatisation. 

Given the importance and pressing timescales of the subject matter we have attached a letter for members explaining the current situation.  We would ask Branches to immediately ensure that this letter is distributed to CWU members in the workplace.

We will keep you informed of further developments.

Yours sincerely
                                                 
Dave Ward, Deputy General Secretary (P)                                                              

Billy Hayes, General Secretary

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