Cwu Members Determined To Defend Final Salary Pensions

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CWU representatives from all over the country arriving for Thursday’s briefing on Royal Mail pensions
CWU representatives from all over the country arriving for Thursday’s briefing on Royal Mail pensions

THERE is uproar in the Communication Workers Union (CWU) over the Royal Mail drive to rip up members’ existing terms and conditions, and the collaboration of the CWU leaders with this drive.

Royal Mail wants to pave the way for 40,000 more redundancies and scrap the pensions agreement – replacing final salary pensions with a Defined Contributions scheme for new staff and a Career Average Defined Benefits Scheme for existing staff.

And postmen are also in uproar about plans to raise the retirement age from 60 to 65.

Two national meetings in London have heard the CWU leadership urge support for the deal agreed by the union’s General Secretary Billy Hayes and Deputy General Secretary Dave Ward to end strike action.

A ballot of around 130,000 CWU members in Royal Mail is now set to take place on the Pay and Modernisation agreement, with another ballot following it on pensions.

The pay and modernisation deal was debated at the first national meeting of CWU area reps and branch secretaries, before branches decided whether to recommend acceptance or rejection of the deal to the membership.

Last Thursday a second meeting took place over pensions, ahead of a 60-day ‘consultation’ exercise.

The ballot of CWU members on the pensions issue is expected in January, when the consultation ends.

Royal Mail’s proposals include:

• Closing the final salary scheme to new members from January 31, 2008, replacing it with a Defined Contribution scheme;

• Introducing a Career Average Defined Benefit scheme for all existing employees from April 1, 2008;

• Increasing the normal retirement age from 60 to 65 from April 1, 2010.

Jim McKechnie, secretary of Glasgow and District Amal. branch, told News Line before the latest meeting: ‘We think we’ve been stuffed.

‘We’re here today to hear why they believe this is a good deal.

‘We’re having a full membership meeting in Glasgow next week and our members will tell us if it’s a good deal or not.’

Peter Sansum, Cleveland Amal., said: ‘It’s absolute rubbish. It’s a disgrace and they should throw it out totally, and if they don’t, they should resign.’

Andy Bell, Glasgow and District Amal. area distribution rep, said: ‘We’ve not been given enough information.

‘I’ve only got seven years left to pay on my pension and they’re going to change it.

‘So I’ll have six and a half years reduced pension. I could lose £1,000 a year.’

Ian Warwick, SE No.5 branch, southern England, said: ‘There’s a campaign been set up – No to the Deal – and branches are beginning to support it.’

Peter Boulton, Colchester and District area rep, said: ‘We’ve known for years there were problems with final salary pensions, going back to the Robert Maxwell era. They’re too easy to raid.

‘The Labour government stuck its greedy paw into the pot when they took £40 billion as a windfall tax out of pension funds and we’ve been struggling ever since.

‘I think the agreement should be thrown out.

‘If we weren’t facing the unprecedented levels of competition that we are at the moment, Royal Mail would still be able to afford to do all the things they have been doing all along.

‘Without question, this deal will lead to a worse service.

‘When you have to tell recruits to the Royal Mail that there is no final salary pension and a flexibility package means they may have to work 30 hours during the summer and 50 hours in winter, then recruitment is going to go through the floor.

‘Absolutely, it will lead to a dog fight for business between Royal Mail offices, with people pointing fingers at various business units and saying that’s where the savings should be made. It’s starting now.’

He continued: ‘It’s vital that we show total solidarity as a union, stand shoulder to shoulder, because this is the final battle for terms and conditions in the Post Office.

‘I think it was a mistake not to continue with the strike action which wasn’t deemed illegal.

‘Sufficient notice had been given and we should have taken that action.’

Dave Jones, Wolverhampton and District area distribution rep, said increasing the retirement age to 65 ‘could mean five years of hard labour for postmen out on delivery – the last five years of torture – and the Wolverhampton and District branch will not support the increase’.

John Crussell, an area distribution rep from Anglia division, said: ‘We’ll be saying no to the pay deal and I’ll be recommending saying no to the changes in pensions to 65 as well.

‘We have to think of our members. For our members it’s a diabolical liberty.’

He said that the 60-day consultation period on pensions was about to begin ‘so we’ve got until the end of the year to find out where we’re going and I personally believe it’s a ridiculous situation, there’s no need for it.’

One delegate who did not want to give his name said: ‘At the moment there seems to be conflicting stories.

‘I’d like to know what the pension fund trustees as a body have to say in all this, what their position is, and can they contest or can they recommend other options – because otherwise I don’t see what they’re there for.’

Another rep from southern England said: ‘The retirement age going up is certainly a big issue. There is solid support for keeping it the same.

‘It’s only recently they’ve been taking new staff (on immediate starts). At one time you had to join a queue to join the Post Office.

‘So there’s most definitely been an erosion of terms and conditions in the last 10 years.

‘I’m a delivery rep and I see my lads go out every day loaded up like pack animals.

‘The real crunch is we’ve actually delivered one per cent more last year than what we did the previous year and with far less staff.

‘We’ve got a high proportion of over-40s in the workforce, that’s why pensions is such a volatile issue.

‘If you say yes to the pay deal, you’re saying yes to a change on pensions, that’s a hidden clause.

‘You’re only voting on what type of change you’re having.

‘The government wants McDonald’s-style working, that’s what it’s leading to.

‘I’ve never known this strength of feeling before.’

Derek, a branch secretary from Bournemouth, said: ‘The majority of branches will throw out the Pay and Modernisation deal and the pensions deal.

‘You will lose five per cent for every year worked after 60, as well losing from your lump sum,’ he warned.

Paul Garroway, South Central No.1 branch, said: ‘There’s no branch that can put up with this pensions deal and our branch is going against the deal on pay and conditions.

‘The pensions is the biggest issue for the membership.

‘What the executive committee have done is to say that they won’t campaign against Royal Mail during the consultation period.’

Alan Dawson, a customer sales rep, said: ‘Most people are angry because they think the membership supported the industrial action because pensions was involved.

‘It wasn’t (just) about pay, it was about the pension and about terms and conditions.

‘There’s a strong feeling in there that the members are going to be sold down the river if we agree with these pension proposals.’

He said that ‘basically’ the union leadership’s line was ‘that the financial position Royal Mail’s in and the competition it’s facing means something has to change.’

He said that CWU leader Dave Ward had told the meeting ‘no change at all is not an option’.

But Alan Dawson said he believed ‘there are other options that should have been explored before putting out a statement.’

He added: ‘They’re going to recommend a yes vote on Royal Mail’s proposals and I’m against it.’

He said the only way workers would be able to get a full pension, if the proposals go through, is if they worked until they were 65 before drawing their pension.

If they drew their pensions at 60, they would lose five per cent a year.

He continued: ‘The executive is outlining details of what Royal Mail wants.

‘Everyone will be affected differently, but it’s a big attack on all our pension rights and the executive committee is going to recommend that the Royal Mail’s proposals are accepted.’

Dave Ward and the executive committee are expected to tour the country outlining the pension proposals during the consultation period, before a ballot of CWU members in Royal Mail at the start of next year.

CWU reps attending last Thursday’s meeting said a lot of people were unhappy ‘that the executive committee is recommending the changes Royal Mail wants’.

‘They’re saying Royal Mail can no longer pay 30p in the £1 into the pension fund,’ said one rep.

Demands were made for the postal executive committee to withdraw its position.

A CWU rep from Northern Ireland said: ‘It’s going to be very, very tight. I don’t think they’ll accept it.

‘The feeling from the membership is the whole thing should be rejected, the whole shebang, flexibility, pensions.

‘Adam Crozier (Royal Mail boss) got a pay rise. His pay package has gone up to £1.25 million.

‘The way I see it, he is being rewarded for attacking our members’ pensions, it certainly wasn’t for turning the business around.’

Andy Parker, SE No.5 branch area rep, said: ‘I think the EC should have consulted the staff before they agreed the consultation period.

‘It’s the members that pay the money (into the pension fund) at the end of the day, so they should have a say.

‘Nobody knows what’s going on until we have the paperwork sent out to us.

‘Our branch has decided to oppose the deal on pay and conditions.

‘We were under the assumption that the pensions were taken completely out of the pay deal and that is the way the members have been briefed by management. It needs to be clarified.’

Another representative at Thursday’s meeting remarked: ‘When they give you a 60-day consultation period on the closure of a post office, what happens? They close the post office. So what’s the difference?’

One rep warned: ‘People will leave the union if we accept this pensions deal.’

John Frew, SC No.1 branch delivery rep, said: ‘I think it will be rejected.

‘If it isn’t we’ll be knackered!’

John Thwaites, SC No.1 branch processing rep, said: ‘What we learnt today is while most other government-based pension schemes are partly-funded by the taxpayer, ours isn’t.

‘Ours is funded by our own contributions and joint contributions by the employer and no funds from the taxpayer.

‘This is the third attack on the pension scheme.

‘No matter what the consultation and the vote brings about, all Royal Mail has to do is go to the trustees and it can go through.

‘The paying members of the pension scheme of the SC No.1 branch are putting in a motion of no confidence in the pension fund trustees.’

John Frew asked: ‘Why should I work 20 years and put into the pension and then work another 20 years and pay more in but get less? That’s rubbish.’

John Thwaites said: ‘The government is talking about a retirement age of 68. What happens if that comes in?’

He said that: ‘Basically Dave Ward told us it’s not a good deal, but it’s the best we can get.’

John Frew continued: ‘Every time the leadership tells us we’ve got to make the best of a bad situation.

‘They said the same when they got rid of the second delivery.

‘I don’t have any confidence in our leaders.’

Richard Kassir, deputy-area rep from Harrow, said: ‘The effort now is to protect the future of the workforce.

‘What came out of the negotiations is the joint statement, but the final agreement will be at the end of the consultation and all options are open.

‘I think the union should defend the right to retire at 60 and final salary pensions.’

Peter Boulton said after last Thursday’s meeting: ‘In the newspapers today it says that Adam Crozier has been awarded nearly £500,000 in bonuses this year, plus a further £140,000 in lieu of a pensions contribution. So his total package is £1.3 million – 16 per cent higher than last year.

‘I support the campaign to reject the deal.

‘We had a branch meeting in Colchester at which we almost unanimously rejected the pay deal.

‘Dave Ward put himself in a difficult position last Thursday when he was talking about the pay deal, because (he said) it was the best deal he could negotiate.

‘If we reject the deal then his position becomes untenable.

‘The joint statement on pensions categorically states we are just discussing issues Royal Mail have said they’re not going to change and our EC have accepted that.

‘Our EC has negotiated changes from Royal Mail’s original position, but Royal Mail this year have put 30p in the £1 on pensionable pay into the fund and that is unsustainable.

‘This statement has Royal Mail putting in 21p in the £1 on ongoing pensions contributions.

‘It’s not what we want because the final salary scheme will be closed.

‘The fund that’s in there will be frozen, as well as the benefits we have accrued, but the pension we’ll pay into from April 2008 will be fundamentally changed – a career average pension – which is a lot less.

‘I personally stand to lose £66,000 when I retire.’

Boulton concluded: ‘Our decisions in rejecting the pay deal and potentially rejecting this pensions deal would leave our leadership’s position untenable.

‘There’s a belief that Gordon Brown and others put pressure on Billy and Dave to bring this to an end.’