Royal Mail today revealed plans to scrap its mammoth pension scheme that serves 90,000 postal workers.
The former state-owned firm said the current final salary surplus would run out in 2018 and unless changes were implemented, the bill for servicing the scheme could run to over £1bn a year – a level it said “would not be affordable”.
Hargreaves Lansdown’s pensions expert Tom McPhail said:
This should have been done years ago and without this fairly sharp change of direction, the company and the pension scheme could have had a real problem on their hands.
The CWU, which represents over 100,000 of the Royal Mail’s workforce, said it had committed to members to enact strikes if the pension scheme was closed without agreement.
Deputy general secretary Terry Pullinger said:
Any attempt to introduce any unagreed change by the business would be met with an industrial action ballot.
However, McPhail stressed Royal Mail had been splashing out huge sums to fund member’s benefits already. “The pension scheme members can hardly feel they are hard done by,” he said.
Separately, Tata is locked in talks with steelworkers over a deal agreed with unions to protect pensions.
In December, the Indian conglomerate offered to create a parallel pension scheme with reduced benefits. Steelworkers would then be offered the choice of whether to move over, or be handled by the Pension Protection Fund.
Steel union Community is expected to ballot members on the offer in early February.
This Monday, four trade unions representing 16,000 nuclear workers will meet to consider striking over fears of pension cuts.
The Nuclear Decommissioning Authority (NDA) will kick off a statutory consultation next week about proposed changes to final salary schemes for staff at 19 sites across the UK.
“There is no justification for this attack on the pensions of these nuclear workers and their communities,” said GMB national secretary for nuclear Justin Bowden.
The NDA refused to disclose the exact details of what it had planned, but said plans would be similar to those implemented in 2013 under the Public Service Pensions Act.
A spokesperson said: “Government policy is that all public sector final salary pensions schemes should reformed by 2018.”
Not to be left out, the civil service union FDA is demanding a payrise for members.
The FDA said 94 per cent of senior civil servants believe the current pay regime “is not fit for purpose”, and said Whitehall staff are facing extra pressure to implement Brexit.