Royal Mail: “No affordable solution” to keeping Pension Plan open in current form
Royal Mail has reported that, following the review of its member-wide consultation phase, it has concluded that there is “no affordable solution” to keeping the Royal Mail Pension Plan open in its current form.
The consultation phase – which drew on feedback from the Plan members and the Communication Workers Union (CWU) and Unite/CMA – ended on 10 March.
In a statement sent to Post&Parcel today (13 April), Royal Mail said: “The Plan is currently in surplus but we expect the surplus will run out in 2018. The Company’s annual pension contributions are currently around £400 million. If no changes are made, the contributions could more than double to over £1 billion in 2018.
“We have concluded that there is no affordable solution to keeping the Plan open in its current form. Therefore, the Company has come to the decision that the Plan will close to future accrual on 31 March 2018, subject to Trustee approval.
“We know how important pension benefits are to our colleagues. We continue to work closely with our unions on a sustainable and affordable solution for the provision of future pension benefits. We will write to Plan members once further decisions have been made.”
UPDATE AT 10:20 AM (13 APRIL)
The union Unite has sent a statement to Post&Parcel this morning, saying that the Royal Mail pension plan closure is “a cause for serious concern for the dedicated workforce”.
Unite officer for the Royal Mail Brian Scott commented: “The announcement is to close the two current sections at the end of March 2018 and the important part will be the replacement scheme which we are in ongoing discussions about.
“The Royal Mail Pension Plan (RMPP) is not closing in its entirety as the replacement pension scheme will embrace part of that. It is very likely that it will still be a different form of the current defined benefit scheme.
“We will study the implications of today’s announcement very carefully and consider all the options going forward. If we don’t achieve a satisfactory outcome, we can’t rule out an industrial action ballot on this issue.
“We will be consulting our members closely on the next steps in the coming days and weeks.”
