RE: MTSF Review


 RE: MTSF Review

Further to LTB 350/2015 discussions with Royal Mail on the MTSF review have now concluded.

Attached is the review agreement which has been endorsed by the Postal Executive, together with “Additional guidance on ETE cases” which is a Royal Mail policy document which has been amended in consultation with CWU but does not constitute a formal agreement.


Two elements of the MTSF section of the Business Transformation Agreement of 2010 were “time limited” and subject to review. These were:

The suspension of a “cap” of two years pensionable pay on cost to the business of redundancy (which had the effect of enabling members of the Royal Mail Pension Plan aged over 55 to take a package including immediate payment of an enhanced pension).

An additional two years support and an increase in the cap on Excess Travel Expenses from £1,500 to £20,000 for those in the former Letters business whose travel costs exceeded £1,250 per year following redeployment. 

These terms were originally due to cease on 31st March 2013 but were extended a number of times, most recently by the “Joint Statement: Balanced approach to growth, efficiency and incentives” which deferred the review until May 2015.

In addition to this, during 2014 HMRC changed its policy on taxability of buy down of hours payments, to make them reckonable for tax and National Insurance (NI). As part of the Joint Statement Royal Mail agreed to pay 50% of the cost of tax and NI, or provide the option of payment of buy down lump sum into pension, again reviewable in May 2015.

Voluntary Redundancy Cap 

It has not been possible to persuade the business to further extend the suspension of the cap. With effect from 1st October this year the suspension will be lifted. This does not affect redundancy terms based on the multiplier but will limit the ability of members of the Royal Mail Pension Plan (RMPP) to receive immediate payment of enhanced pension to circumstances in which the total cost to the business does not exceed the equivalent of two year’s pensionable pay. 

Where the combined redundancy and pension cost would exceed the equivalent of two years pensionable pay, cash compensation of 104 weeks pensionable pay will be offered instead. 

If a redundancy exercise is already in progress and some employees have a last day of service before 1st October and some after, the current terms will apply throughout. 

Excess Travel Expenses

The temporary enhanced Excess Travel Expenses (ETE) for employees redeployed to a new workplace with an additional cost of journey exceeding £1,250 a year have been made permanent on the current basis and are no longer subject to review. 

Buy Down

The 50% company contribution to tax NI at the basic rate or the alternative of payment direct into pension will remain in place and will be reviewed again in March 2017. 

“Additional Guidance on ETE cases”

Arising from these discussions management guidelines on ETE have been amended in consultation with the CWU and these revised guidelines are attached for information. It should be emphasised that these guidelines do not constitute an agreement and the union has retained the right to make representations on behalf of individuals and groups of members where it can be demonstrated that application of the guidelines could unfairly disadvantage them. 

Any enquiries should be addressed to PTCS department, quoting reference PTC/RE/dj/020. 

Email address:  


Yours sincerely

Ray Ellis                                       

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