Postal unions today threatened to ballot for industrial action after Royal Mail said it would close its defined benefit pension scheme in 2018.
The postal service said that the pension plan was currently in surplus, but it was 'not sustainable'. Royal Mail contributes about £400m a year, but it said this would have to increase to more than £1bn by 2018.
"We have concluded that there is no affordable solution to keeping the plan open in its current form," the company said in a statement.
"Therefore, the company has come to the decision that the plan will close to future accrual on 31 March 2018, subject to trustee approval."
The defined benefit scheme was closed to new members in 2008, but 90,000 postal staff have continued to contribute.
The Communication Workers' Union (CWU) condemned the move, and threatened to ballot its members for strike action.
The CWU said its members - including sorting and delivery staff - could lose up to a third of their future pensions as a result of the change.
A 50 year-old earning £25,000 a year and retiring at 65 would lose £4,392 a year, or more than £100,000 over the course of their retirement, it said.
The Unite union, which also has members working for Royal Mail, said the closure was a cause of "serious concern".
"We will study the implications of today's announcement very carefully and consider all the options going forward," said Unite officer Brian Scott. "If we don't achieve a satisfactory outcome, we can't rule out an industrial action ballot on this issue."
The current Royal Mail pension scheme is based on a worker's average pay throughout his or her career, known as "career average". Royal Mail wants members of the scheme to change to a defined contribution plan - in which the company and staff contribute to a pension fund with no guarantee of eventual income levels.
However, it said that it was working with unions on a sustainable and "affordable solution".