Pension changes to take effect after approval by Trustee
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.
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.
Jon Millidge, Royal Mail’s Interim Group HR Director, said “Changes are unavoidable given increasing longevity and the higher costs of providing the current Pension Plan – but Royal Mail remains committed to continue offering postmen and women the best pensions that the company can afford.”
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.
