Communication Workers Union members are angry that Royal Mail Group has taken Executive Action to replace postal workers’ final salary scheme with an inferior CARE (Career Averaged Revalued Earnings) scheme.
Workers are also angered by imposed plans which mean they will not be able to receive their full pension for a further five years.
Instead of the current 60, the pensionable age is being upped to 65.
This comes despite Royal Mail chief executive Adam Crozier pledging in February that ‘consultation will take place on ways to safeguard an affordable final salary scheme for all existing employees’.
Postal workers are furious that while Crozier has had a total pay of £8.4m since 2002/03, he and Royal Mail chairman Allan Leighton have closed the final salary scheme for existing members to save money.
The introduction of the CARE scheme means that every person who is in the pension scheme and is not in receipt of their pension will receive a reduced lump sum and a reduced pension.
Postal workers have been shocked by the scale of the reductions, from 17% to 2% for those in the old POSS Scheme prior to 1988 – 2% for an individual who is 55 and has 35 years service, 17% for an individual aged 40 who has had 21 years service.
In cash terms this means that an individual who is 55 and has 35 years service will lose £255 in annual pension and £764 from their lump sum.
An individual aged 40 who has had 21 years service will lose £1,936 in annual pension and £5,806 off their lump sum.
Postal workers are concerned that it is members aged 40 and below who will be the biggest losers.
Reductions for pension scheme members who joined after 1988 are even worse.
One example is an individual who is 24, has five years service and earns £20,000 per year.
He or she faces losing 60% of their lump sum and pension in the new CARE scheme, compared to the current final salary scheme.
This means an annual pension cash loss of £8,245.
In another example, an individual aged 40 with 21 years service at Royal Mail, on a salary of £20,000 will lose out by 19% on their lump sum and 19% or £2,662 on their pension year by year.
Postal workers are warning that the Royal Mail Group changes are completely unacceptable and that the CWU cannot stand by and let the business deny its members a large part of their deferred pay.
But despite continued lobbying the government by the CWU, Royal Mail is proceeding with its plans.
Royal Mail Group has already announced to the Government Review Board that the group may have to change the pension scheme further within three years.
Many CWU members are demanding the union move to a ballot for strike action to defend their pensions.
Workers are also wary that the government-sponsored Hooper Review of competition and Royal Mail Group’s remit has been widened to include pensions and possible privatisation.
Postal workers are aware that the actions of government regulator Postcomm have left Royal Mail Group open to competitors, such as TNT, able to cherry pick the profitable parts of the industry.
Meanwhile, Royal Mail is left with the obligation to provide a universal service to all 28.4 million business and household addresses in the UK, which represents 60% of Royal Mail costs.
Postcomm and Royal Mail have suggested in their second submissions to the Hooper Report in the government review of postal services that the only way forward is some form of privatisation.
The general thrust of these recommendations from Postcomm and Royal Mail Group is that private investment should be allowed in Mail Centres and Regional Distribution Centres (RDCs) in order for this money to fund the maintenance of the universal service.
Postal workers are angry that while Postcomm’s stated main primary objective is to protect the universal service, after almost eight years, the watchdog is now asking for privatisation to ‘safeguard’ the universal service.
Many CWU members hope that one of the recommendations of the government review will be the sacking of Postcomm.
Royal Mail bosses Leighton and Crozier, have been known to favour privatisation for some time.
The CWU states that it is totally opposed to privatisation, that the only people who benefit from privatisation are the bosses and the Post Office Board.
It has not been lost on postal workers that privatisation in other companies has always led to general downsizing of the industry.
As well as managerial inefficiencies, it has resulted in price increases, loss of services and the destruction of jobs and terms and conditions for the remaining workforce.
CWU members are also up in arms over what they describe as the Royal Mail slash and burn policy to Mail Centres.
For some time, Royal Mail has wanted to drastically reduce, on a piecemeal basis, the number of Mail Centres.
The business has already announced four Mail Centres which they want to close.
In addition Royal Mail are planning the closures of ‘several more’, which the CWU believes means that Royal Mail’s intentions are to close in excess of 20 offices.
The CWU has called on Royal Mail to disclose its official ‘hit list’ and to negotiate an agreement which will protect the membership.
The closures pose mass sackings, including compulsory redundancies which the CWU is committed to oppose.
Royal Mail, instead of dealing with the closures on a national basis, are dealing with the issues on an area by area basis.
Post Office Limited Counter members are also having their jobs slashed under the new deal.
Offices are being made to work with hours in offices that are in some cases well below what the Crown Office needs.
This is seen as part of Post Office Counters boss Alan Cook’s drive to cut service to the public so he can proclaim he has made the network profitable by 2011.
Postal workers are insisting this is unworkable.
They say that the Post Office Network needs investment and the removal of Postcomm.
CWU members in Post Office Ltd have paid into the pension scheme just like all other members, they are accusing Royal Mail Group of cherry picking what bits it wants control of like the dumbing down of the Pension scheme for all.
The CWU is bracing itself for industrial action to safeguard our pensions and terms and conditions.
At present, the policy is to put as much political pressure on the government.
The union believes that this and the Hooper Review will play a major factor in whether Royal Mail Group change their mind on pensions.
CWU policy is that unless the Labour Party supports the CWU in regards to pensions, then the CWU membership will be balloted on whether we continue to support them financially.
Postal workers have concluded that either the union fights against Royal Mail Group’s plans or they will see Royal Mail Group destroy post workers’ terms and conditions layer by layer.
