Tag: Domestic

Postcomm highlights many Royal Mail failures

Posted by | Mar 28, 2008 | |

Royal Mail is failing to invest properly, is too inefficient and is not developing sufficient new products, the industry regulator has said in a sweeping indictment of the business.
The criticisms by Postcomm are in response to a government review of the impact that competition has had on the state postal group.

The postal group recently warned unions that its pension fund trustees could be forced to liquidate the business or force through huge alterations of the pension scheme unless changes were made.

The warning over the GBP 3.4 billion pension deficit comes as Royal Mail is facing another major industrial showdown with unions over planned pension changes, just months after the end of the last national strikes, which were triggered by pay. A clash moved nearer yesterday when the pension fund trustees approved the changes, which include ending the final salary scheme to all members and raising the retirement age from 60 to 65.

Postcomm highlighted the benefits of competition, such as lower prices and greater innovation for large business customers and record levels of service quality for residential customers.

Royal Mail said that competition was now far ahead of the forecasts from the regulator when the market formally opened to competition four years ago. The business part of the market, which is the only area properly active at present, opened four years ago when Royal Mail finally agreed access terms for its infrastructure.

Royal Mail said that Postcomm’s criticisms had failed to recognised the postal group’s universal service obligation (USO) – its duty to provide a flat-rate service anywhere in the country for domestic customers.

Postcomm argued that the USO was not under discussion for the part of the review it responded to.

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Postcomm: Royal Mail must transform for a healthier mail market (UK)

Posted by | Mar 27, 2008 | |

Postcomm has argued that fundamental reforms are essential if Royal Mail is to have a long-term sustainable future and the needs of all users of mail are to be met.

In its first submission to the independent panel reviewing the postal services market, Postcomm has highlighted the positive impact for customers since the addressed letters market was opened fully to competition over two years ago:
* Larger customers have enjoyed lower prices and increased innovation;
* Residential mail users have experienced record levels of service quality from Royal Mail; and
* Smaller businesses and public sector customers are also now beginning to reap the benefits of choice.

During this period, there have also been significant structural changes in the mail market that are directly linked to advances in technology and the increasing use of alternative forms of communication such as email and the internet. These changes pose challenges but they also create new opportunities. Royal Mail’s performance in rising to meet these new challenges has been disappointing.

Royal Mail continues to lag significantly in terms of investment, efficiency and substantial product innovation. Their recent focus has been on forestalling new entrants to the mail market and far less on adapting to these more far-reaching structural changes. This situation is unsustainable and unless addressed will result in accelerating decline.

Postcomm believes the future health of Royal Mail, the universal service, and the addressed letters market as a whole are inextricably linked. Decisions about fundamental reform have to be taken swiftly if Royal Mail is to lead a healthier mail market and provide a strong universal service.

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Pension changes to take effect after approval by Trustee

Posted by | Mar 27, 2008 | |

Royal Mail today confirmed that changes to its Pension Plan would take effect on April 1 following approval to amend the Plan from the Trustee. Earlier today, Royal Mail and the Trustee signed a deed of amendment which gives effect to the changes to the Plan.

The changes, which follow extensive talks with unions and employee representatives since last April, had also been agreed last year by both the CWU and Unite as part of wider agreements with each union on pay, modernisation and pension reform. A formal consultation period with all affected members closed on 16 January this year.

The key pension changes now agreed are:
• The Plan will close to new members from 31 March 2008.
• All pensions and benefits earned before 1 April 2008 will still be linked to final salary at the time of retirement.
• From 1 April 2008, benefits building up for employee members of the Plan will be earned on a Career Salary basis.
• New recruits joining the company after 31 March 2008 will be able to begin paying contributions to the new plan after they have worked for the company for a year.
• A new defined contribution plan will be launched in April 2009.
• Employees can continue to take their pension on reaching 60 but the normal retirement age will increase to 65 for benefits earned from 1 April 2010.
• From 1 April 2010 it will be possible to draw pension earned before the change to normal retirement age at 60, and continue working while still contributing into the Pension Plan until the maximum level of benefits has been reached.

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German postal co PIN probed over alleged illegal trade union financing

Posted by | Mar 25, 2008 | |

German prosecutors are investigating allegations that PIN, a private postal company, last year illegally financed the creation of a trade union as part of its failed bid to block minimum wage regulations in the postal sector.

PIN, which is currently in insolvency proceedings, allegedly made undisclosed payments worth about 133,000 eur to the GNBZ postal workers union, which was set up to rival Germany’s largest services union, Verdi.

The GNBZ denied it had been ‘bribed’ by PIN, the Financial Times reported. PIN’s former chief executive Guenter Thiel also denied the allegations.

PIN, which is majority owned by Axel Springer AG, complained last year that a new hourly minimum wage of between 8-9 eur for German postal workers was part of a strategy by incumbent Deutsche Post to squeeze out competition.

A wage agreement between PIN and GNBZ paying staff only 6.50-7.50 eur an hour was invalidated by authorities.

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EU commission criticizes Deutsche Post's VAT exemption

Posted by | Mar 19, 2008 | |

The EU commission is criticizing Deutsche Post World Net AG’s VAT exemption, Frankfurter Allgemeine Zeitung reported, citing a letter the commission wrote to the German government.

EU commissioner Charlie McCreevy has advised the German government not to hamper the opening of the EU’s mail markets by unfair regulation, it said.

Unlike its German competitors, Deutsche Post is exempted from charging value added taxes on its products in return for the universal service it offers to ensure mail is delivered to remote regions.

The German cabinet is set to decide on tax regulations for the German postal market over the coming days, the report said.

While finance minister Peer Steinbruck of the Social Democrats favours maintaining Deutsche Post’s tax privilege, economy minister Michael Glos from conservative bloc CDU/CSU favours abolishing it.

In addition to the VAT exemption, the government last fall decided to make mandatory for its competitors the minimum wages paid at Deutsche Post.

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