News

Strike threat looms again at Royal Mail

14 July 2017

The main postal trade union has its opposition to a proposed new Royal Mail pension arrangement, increasing the possibility of a first nationwide strike since the postal operator was privatised four years ago.

Royal Mail wants to replace its existing £9.8bn defined benefit pension scheme, which offers a guaranteed income in retirement, with a different kind of ‘DB’ scheme that instead provides employees with a cash lump sum linked to the value of their contributions. The company argues its current DB plan is unaffordable.

Unite will hold a ballot of its 6,000 members from next week but is not making a recommendation.

Brian Scott, Unite officer, said: “The latest position is an improvement from the original proposal and through our discussions we have achieved these improvements.”

Initially, Royal Mail offered a ‘defined contribution’ scheme, where employees bear all the investment risk for their pension savings. Under its latest proposal, employees will now have the choice between the DB ‘cash balance’ scheme and an improved DC system.

However, the sweetened offer fell short of demands by the CWU, which represents frontline staff that comprise the majority of Royal Mail’s 142,000-strong workforce. The union has tabled its own counter-proposal and has previously threatened strike action over the issue.

Royal Mail says the latest proposal would keep its payments into pension pots at £400m a year. Without reform, it claims the annual cost of funding the plan will triple.