No shortage of “pension engagement” at Royal Mail.

Pension people want positive engagement, but when they get it, they ignore it or deride it.

On Friday, the CWU announced that an agreement had been reached between CWU and Royal Mail which will now be put to the membership. The agreement means three things.

  1. We will not have a postal strike
  2. The postal workers will have a pension that gives them a “pension not a pot”
  3. A more general settlement between CWU and Royal Mail will follow.

If you don’t believe me, here’s Terry Pullinger spelling it out to members.

Terry Pullinger four Pillars Agreement from The CWU on Vimeo.

5,000 people have watched that video in the last 24 hours, the FT has reported on it in the starkest terms

But the story has hardly made the front page. I guess that 140,000 people agreeing a radically new pension settlement which pleases both them and their employer, isn’t considered the “right kind of engagement”.

USS – more “wrongful engagement”.

I guess the papers will continue to report the bad news stories. The story of how Carillion over-promised and over-delivered to shareholders , under-priced contracts and failed to manage its covenant with its pension scheme. This is being reported as a pensions failure, when clearly it is a corporate failure.

I suppose that the impending strike by university staff will similarly be reported as a pension failure, despite the clear evidence to the contrary. The magnitude of the challenge facing the university staff and its union is that the preferred solution, a DC plan that “democratises” (dumps) risk on teachers , will not provide a pension but a pot. We are about to see another strike where staff are engaging with and choosing “pensions” and rejecting “pots”. Presumably – another example of the wrong kind of engagement.

At the risk of sounding cynical, but the “right” kind of engagement, seems to be about the management of “pots” and not with a pension at all. The nearest I hear to calls for pension engagement – from those on the sell side of the argument – is when the argument comes round to the purchasing of annuities.

As far as I can see “industry” calls for engagement are no better than the hawker’s cry

Who will buy!

Everywhere you look, people are engaging with pensions. The WASPI women are engaging with their entitlement to the state pension, politicians argue about the sustainability of the triple lock, Gareth Morgan and others campaign for better integration of universal credit and pensions so that those on low incomes get a better deal (than the crud they get at the moment).

All are examples of engagement with pensions as “a wage for life” and all are ignored by the financial services industry or mocked as the wrong kind of engagement.

The reason why the SIPP providers and the insurers are so vehemently against “wage for life” solutions, is that they see them as a threat to their business plans. Their business plans are built around individuals engaging (or more exactly financial advisers engaging) using highly problematic drawdown problems or very expensive individual annuities.

You can’t get much more engaged than going on strike about something!

I cannot think that all those postal workers and all those university teachers would have considered withdrawing their labour unless they felt strongly, that they were fully engaged.

In case anyone is under the impression that the Royal Mail strike is about more money into worker’s retirement pots, it is not. The contribution into the proposed CDC pension matches the contribution into the DC pension, Royal Mail aren’t taking on more risk -either in terms of contributions or balance sheet. They have simply agreed to a more equitable means of “democratising” risk. The risk will be better shared by members using the mutual assurance that CDC can provide.

So the engagement is not about screwing the employer, it’s about getting the right kind of pension.

I have no evidence of how the UCU will argue their case with their member’s employers , but I suspect the argument will be along the same lines.

That people are prepared to go out on strike to keep accruing “pensions” , rather than getting “pots”, tells me that pensions are engaging an awful lot of people.

The solution is not to abolish pensions!

I have given up on arguments that say the word “pension” is at fault. Financial services people want people to stop using the word. This is hardly surprising, they are no longer selling pensions , they’re selling “pot management” (aka “wealth solutions”). Initially , you may be flattered that your CETV is worthy of a “wealth solution” – but I fear wealth management is not a long-term solution for those in medium and low incomes, even if their CETV is worth £368,000 (on average)

carillion scam 2

While nobody wants to see an end to pension freedom, it’s clear that most people do not want to see an end to pensions. Most people do not see final salary pensions as “pots” and that includes the FCA.

The solution is to promote what we used to call a scheme pension and what we can generically call a wage for life.

Let’s remember that when the full implications of the Royal Mail/CWU agreement.starts sinking in.

target pensions


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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