Royal Mail issues update on 2018 Pension Review
Royal Mail has issued an update on its 2018 Pension Review, in respect of the future of the Royal Mail Pension Plan. In a statement sent to Post&Parcel today (14 July), Royal Mail said: “We have had extensive talks with our unions, Unite/CMA and the CWU, on a sustainable and affordable solution for retirement benefits for Plan members after 31 March 2018, when the Plan in its current form will close to future accrual.
“The Company is now offering members a choice between a) a Defined Benefit scheme and b) a Defined Contribution scheme, set up as new sections of the Royal Mail Pension Plan (the Plan).
“The Company understands that Unite is planning to hold a consultative ballot of its members on this proposal, as it believes that this is the best available deal for Plan members and a significant improvement on the Company’s original Defined Contribution proposal.
“Royal Mail has also offered this improved proposal to the CWU, making it available to all Plan members.
“The Company expects that the overall cost of the proposal will be funded within its current £400 million annual pension contribution. Royal Mail believes that the risk to the Company of the proposed Defined Benefit cash balance scheme would be materially lower than under the current Plan and is a manageable risk for us.”
Royal Mail added that it expects that the overall cost of the proposal will be funded within its current £400m annual pension contribution. It also believes that the risk to the company of the proposed Defined Benefit cash balance scheme would be “manageable” and “materially lower than under the current Plan”.
UPDATE: Unite response to Royal Mail proposals
The union Unite has issued a statement this morning, confirming that it will be holding a consultative ballot of its 6,000 Royal Mail managers on the latest pension proposals put forward by the management.
The union said that it would be making no recommendation to its members on the package. The balloting of members is due to start early next week and close on Monday 7 August.
Unite officer for the Royal Mail Brian Scott said: “We are committed to holding a membership consultative ballot on the Royal Mail’s latest proposals, which will close on 7 August.
“We are not making any recommendation. We think it is important that Unite members have an opportunity to express an opinion on what is being put forward by the company.
“The latest position is an improvement from the original proposal and through our discussions we have achieved these improvements.
“One of the main developments is that we will keep the defined benefit pension scheme open and the lump sum approach being put forward will become a separate section of that scheme. This will reduce any adverse impact on members’ future retirement incomes.
“We have had many discussions with the company over the last few months and these have been difficult. However, the Unite negotiating team consider that what is on offer is the best achievable in the circumstances.”