Union claims proposal is a ‘shortfall’ in the pensions promise
POSTIES rejected an offer by Royal Mail yesterday of a new defined benefit pension scheme, claiming the proposal “does not meet our aspiration of a wage” in retirement.
Privatised Royal Mail announced in April that it would dump its defined benefit pension scheme for 90,000 postal workers and replace it with an inferior one.
After union opposition, Royal Mail yesterday said workers could choose between a new defined benefit scheme or a defined contribution scheme.
A defined benefit scheme pays out an amount depending on workers’ final salary and length of service, whereas the defined contribution plan amount is according to the amount that both workers and employers have put in over the course of the scheme.
But the Communication Workers Union (CWU) has rejected the reforms, saying it “does not meet our aspiration of a wage in retirement pension scheme but rather still promotes the conventional wisdom of a cash-out arrangement at the point of retirement.”
CWU deputy general secretary Terry Pullinger said: “It represents a significant shortfall in the pensions promise and it is not something that we are prepared to recommend to our members.”
Unite, which represents 6,000 Royal Mail managers, said it will hold a consultative ballot on the proposal, ending on Monday August 7.
The union will be making no recommendation on acceptance or rejection of the Royal Mail proposal.
However Unite officer for Royal Mail Brian Scott said that the union considers the offer to be “the best achievable in the circumstances.”
“We think it is important that Unite members have an opportunity to express an opinion on what is being put forward by the company,” he said.
“The latest position is an improvement from the original proposal and through our discussions we have achieved these improvements.”
Royal Mail was publicly owned for 500 years before shamefully being sold to the private sector by the Tory-Lib Dem coalition government in 2013.
Royal Mail said it pays £400 million a year into pensions, and that without change this would rise to £1 billion by 2018.