10LTB605Pensions position july10
RM Pension Fund Deficit
MPs Vow to Back CWU Pensions Campaign
Dozens of MPs pledged their support for the CWU campaign to urge the Government to meet its obligations to Royal Mail Pension Scheme members at a high-profile Westminster event yesterday (Tuesday).
Presenting the union's new document Time to Deliver - Royal Mail Pension Fund Deficit, CWU general secretary Billy Hayes told a packed House of Commons Committee Room that unless the Government acted quickly to underwrite the deficit, scheduled repayments could seriously damage the company's future operations.
As the document explains, the current repayment plan - based on the 2006 valuation of a £3.4 billion shortfall - obliges Royal Mail to pay £280 million per year to service the deficit alone.
But, with the 2009 valuation expected to indicate a tripling of the deficit to around £10bn, adjusted repayments calculated on similar criteria could see Royal Mail's annual costs rise to a crippling £1bn, putting plans for desperately needed operational modernisation at risk and possibly even jeopardising the universal service itself.
The union argues that, as the sole shareholder - and therefore, the ultimate owner of the company - the Government has a specific responsibility to address this crisis, particularly in light of the fact that the decisions made and regulatory environments created by successive governments have actually created the deficit.
Holding up the document as he addressed the meeting, Billy Hayes said: "This document can be summed up in one word - 'will'.
"If government has got the will to resolve this issue, then it can be done in the twinkling of an eye."
Last July, when Business, Innovation and Skills Secretary of State Lord Mandelson withdrew controversial proposals to privatise Royal Mail, he indicated that government action on the deficit may be forthcoming if progress was made on modernisation and transformation of the business.
And, with reference to that statement, Billy pointed to the soon-to-be-concluded transformation talks currently taking place between the CWU and Royal Mail as evidence that Lord Mandelson's challenge has been accepted and is being met.
"We're doing our bit on modernisation - now you've got to do your bit," urged our general secretary.
Several MPs then spoke, each of them welcoming the document and pointing out that its clear, concise arguments made a strong and logical case for urgent government action.
Crawley MP Laura Moffatt told Billy: "I'm very glad you sent us this. Those of us who want to support you and want to help need the tools to do so - and this document contains specific suggestions for dealing with this."
Kelvin Hopkins (Luton North) agreed, pledging "my total support for your campaign," while Edinburgh East's Gavin Strang said that it was "a tragedy that we are where we are.
"We have a responsibility for where we are and we have to sort out the pensions deficit."
Plymouth Devonport member Alison Seabeck said that the CWU document was "very helpful," adding: "Most MPs support doing something on the deficit" and Tony Wright (Great Yarmouth) predicted that "the vast majority of Labour MPs would be supportive of this.
"This is above politics - it's about doing the right thing," he insisted, a sentiment shared by Stoke South's Rob Flello and Jim McGovern (Dundee West), who received a second round of applause from CWU members in the audience in recognition of his resignation as a Government Minister in protest at Lord Mandelson's privatisation plans.
TO: ALL BRANCHES WITH POSTAL MEMBERS
CWU PENSIONS LEAFLET – “TAKING YOUR BENEFITS EARLY”
Branches will recall that Motion 79 was endorsed at the Postal Conference 2011. (Please see attached).
Following Conference the Union met with our pension advisors, First Actuarial to discuss the terms of the motion and establish what type of information was needed to meet the terms of the policy contained in Motion 79.
Attached for Branches is a copy of the leaflet and information that has been prepared. CWU Headquarters is now making arrangements for a copy of the leaflet to be made available on the Union’s website.
Any enquiries on the above LTB should be addressed to the DGS (P) Department.
Deputy General Secretary (P)
79 CATEGORY A: This Conference agrees that that there is a massive problem for all members who decided to take pension benefits early between the ages of 50-55 before last April 2010. The problems that have arisen for our members are.
1. No longer available to them is Death in Service Benefit.
2. Massive tax implications for members who continue to perform extra duty and therefore enter a higher tax rate ceiling.
3. Reduced pension benefits because of early release.
This list is not exhaustive.
With this in mind the Postal Executive is instructed to produce user friendly documentation to outline some of the pitfalls of requesting early pension benefits before a new wave of problems arise with our over 55 members, that may be tempted to receive early pension benefits.