Royal Mail Review of Future Catering Provision

Royal Mail Review of Future Catering Provision

Further to LTB’s 427/20 and 441/20 Branches and representatives are informed that in parallel with the formal TUPE consultation activity with Quadrant/Compass Group, the department has also been in discussions with Royal Mail Group in respect of how any material adverse effects for our Quadrant members can be addressed as a result of their decision to dissolve the catering Joint Venture.

In this regard the department has had serious concern around the impacts on pension entitlements for those long standing Quadrant employees who have remained in the Royal Mail Pension Schemes, as this is not considered “in scope’ with regard to TUPE Regulations.

Historically at the time of the creation of the Catering Joint Venture in 1998 an arrangement was agreed on an exceptional basis, which enabled those employees who were subject to TUPE from Royal Mail (then the Post Office) to Granada and latterly Compass to continue in the RMPP.

The current RM Pension Plan rules however will not permit their continued membership in the scheme at the point of TUPE and at the point of transfer they will become deferred members of the RM Pension Plan. The department has therefore been keen to ensure that any impact on their pensions is mitigated as much as possible.

At the point of the TUPE transfer on the 1st October 2020 these employees (30 CWU Graded individuals) will be auto enrolled in the Compass Group Pension Scheme ‘CRISP’. Under the Compass Pension Scheme the employer will match the contribution rate paid by the employee up to 6%. This falls below the employer contribution rate that is paid in the Royal Mail Pension Scheme and as such it has been recognised this will have a detrimental impact on these particular individuals. Following extensive discussions RMG have therefore agreed that they will top up the Compass employer contribution rate by 7%. This means for those employees who pay the maximum employee contribution rate of 6% the employer contributions will be 13% instead of 6%.

It should be noted that this arrangement is applicable only to those individuals who are currently members of the RM Pension Scheme. However should the affected individuals choose to opt out of the Compass Pension Scheme ‘CRISP’ they will then be auto enrolled in the Government Nest Scheme and the RMG top up will not be applied. Employees who are currently aligned to Compass Pension arrangements will continue to benefit from existing arrangements and the transfer will not require

a change of scheme or change to the level of benefits. Employees in the NEST Government Scheme will continue as normal and this will be governed by Government legislation.

While the 13% does not quite match the RMPP contribution level anticipated when the new RM Pension plan is introduced (13.6%), the department believes that it does go a long way to mitigating the impact on the individuals affected by the dissolution of the Joint Venture and is the best position which could be reached through negotiation, which has been endorsed by the Postal Executive.

Royal Mail have however indicated that their position is that uprating of employer contributions would be for a period of 2 years. The CWU’s aspiration is that the uprating should be applied for a longer term and/or with a review and as such we have made strong representation in this regard. The issue will be subject to further discussion with the business and Branches and representatives will be updated as soon as further information is available.

RMG have also provided the following information in respect of those individuals who are currently in the Royal Mail Pension Plan:

Members will automatically be written to by PSC around 4 to 6 weeks after leaving service to advise them of preserved pension benefits. If they want to contact the administrator before then, they should contact the Pensions Helpline on 0345 603 0043. The only exceptions are: 

 If they are over 60 at LDOS, NRA 60 benefits (earned up to 31.3.2010) will come into payment automatically from that date; and 

 If they are over 65 at LDOS, NRA 65 benefits (earned after 1.4.2010) will come into payment from that date (together with NRA 60 benefits if not in payment already). 

Members aged 55 or over can put benefits into payment on a reduced basis. If they want to apply, they should contact the Pensions Helpline. 

All other Quadrant employees currently aligned to the Compass Group Pension Scheme will continue to receive the 6% employer contributions from Compass Group.

In addition to the above the department has also been seeking to ascertain with RMG whether the opportunity would exist for Quadrant members to transfer into a RM role. This has proved difficult as RMG advised that due to time available the ability for them to process any applications would in all likelihood exceed the 1st October TUPE transfer date. As part of the TUPE consultation, Quadrant have made employees aware of the opportunity to transfer and the department has been actively assisting members in exploring transfer opportunities in Royal Mail where an interest has been expressed. Royal Mail have agreed that should any Quadrant employee apply for a vacancy in Royal Mail by 25th September 2020 with a start date on or before 23rd October 2020, on an exceptional basis they will be able to maintain their continuity of service. It should be noted that all other terms and conditions would be based on those of a new starter in RMG.

Colleagues will also be aware our Quadrant members also received the allocation of Christmas Stamps enjoyed by their Royal Mail colleagues and we had requested that this benefit was continued by Royal Mail. While Royal Mail have indicated that they are unwilling to continue to fund this benefit on an ongoing basis, they have agreed that they will issue stamps to all current transferring Quadrant employees for this year only in recognition of the contribution they have made during the Covid crisis. Eligibility to receive the stamps will be that Quadrant employees who have transferred to Compass Group must be in post when the stamps are issued. This benefit will not be extended to any new employees recruited by Compass Group for the Royal Mail contract after the date of transfer.

The protracted contract negotiations between RMG and Compass Group have resulted in the department having to deal with the TUPE consultation process and associated representations to RMG in what has been an extremely tight timeline. We do believe however that to date we have managed to mitigate as

much as possible the material impact to our Quadrant members and provide some assurance around their future employment.

Any enquiries in relation to this LTB should be addressed to Davie Robertson, Assistant Secretary, email: dwyatt@cwu.org quoting reference: 311.02

Yours sincerely

Davie Robertson 

Assistant Secretary

20LTB458

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