Union rejects Royal Mail reform (UK)
Unions are holding a consultative ballot after the closure of the company’s own consultation.
They say a strike ballot could follow if the Royal Mail does not improve the pension benefits on offer.
The firm plans to reduce the final salary scheme for new and current members and raise the retirement age.
“Overall the proposal will cost people over 34% in their pensions, one way or another,” said Paul Reuter, an official of the postal managers union Unite.
“If there is no improvement then we shall move to a strike ballot,” he said.
The main features of the company’s plan to cut its long-term pension costs are:
– a career average scheme to replace the current final salary version from 1 April 2008 for existing staff
– the standard retirement age to rise from 60 to 65 in 2010, though only for service after that date
– new recruits to be offered a separate “money purchase” scheme
– staff will continue to contribute 6 pct of salaries a year.
Under a career average scheme, a member’s eventual pension will be related to their salary in each year of their career, rather than to their salary in their final year of employment, thus guaranteeing that most staff will get a smaller pension.
Last autumn postal staff voted to end a series of strikes over their employer’s plans to bring in new working methods as well as the changes to the pension scheme.
However, those proposals required further legal consultation with the staff, which saw 165,000 employees being sent a 44-page booklet outlining the impact of the changes.
At the time the Royal Mail claimed it had “the union’s support for the company’s overall proposed pension reform,” although the unions said at the time that their position had been misrepresented.
Unions are holding a consultative ballot after the closure of the company’s own consultation.
They say a strike ballot could follow if the Royal Mail does not improve the pension benefits on offer.
The firm plans to reduce the final salary scheme for new and current members and raise the retirement age.
“Overall the proposal will cost people over 34% in their pensions, one way or another,” said Paul Reuter, an official of the postal managers union Unite.
“If there is no improvement then we shall move to a strike ballot,” he said.
The main features of the company’s plan to cut its long-term pension costs are:
– a career average scheme to replace the current final salary version from 1 April 2008 for existing staff
– the standard retirement age to rise from 60 to 65 in 2010, though only for service after that date
– new recruits to be offered a separate “money purchase” scheme
– staff will continue to contribute 6 pct of salaries a year.
Under a career average scheme, a member’s eventual pension will be related to their salary in each year of their career, rather than to their salary in their final year of employment, thus guaranteeing that most staff will get a smaller pension.
Last autumn postal staff voted to end a series of strikes over their employer’s plans to bring in new working methods as well as the changes to the pension scheme.
However, those proposals required further legal consultation with the staff, which saw 165,000 employees being sent a 44-page booklet outlining the impact of the changes.
At the time the Royal Mail claimed it had “the union’s support for the company’s overall proposed pension reform,” although the unions said at the time that their position had been misrepresented.
Both Unite and the larger Communication Workers Union (CWU) are now balloting their members following the closure of the Royal Mail’s consultation, which ended in January.
The two unions want the company to phase in the higher retirement age, and to improve the rate at which pensions build up in the new career average scheme.
Royal Mail said it had made two further changes to its plan as a result of the feedback it received from 30,000 staff.
It will let individuals pay more than the standard 6 pct contribution rate so they can build up more pension, and it will also let staff pay in for 45 years service, instead of the current 40-year maximum.
