Royal Mail's decision this morning to close its pension scheme next year has been roundly condemned by unions, which hinted at strike action.
The CWU, which represents over 100,000 Royal Mail employees, said member payouts will fall nearly a fifth as a result of the decision.
“Although Royal Mail’s own consultation exercise revealed massive opposition to its closure plan, the company has decided to ignore the views of its workforce and proceed with closure without consent," said Ray Ellis, acting deputy general secretary of the CWU's postal arm.
The union repeated a pledge to ballot for strikes it made in January after Royal Mail announced plans to close the scheme in January, but made no specific reference whether a ballot will be called.
Ellis said: “CWU has made clear that any attempt by the company to impose change without agreement will be met with the strongest possible opposition including a ballot for industrial action.
We will not stand by and watch the company abandon the pension promises it made at the time of privatisation which threatens our members with massive cuts to their future pension benefits and insecurity and poverty in retirement.
Royal Mail said if it did not close its pension scheme to further accrual in 2018, the annual cost will rocket from £400m to £1bn in order to stop it falling from its current surplus into a deficit.
The CWU said closing the scheme to further accrual, effectively drawing a line under future company payments into the scheme but keeping current commitments in place for historical payments, would have dramatic impact on payouts.
The union estimated a member earning £25,000 annually would lose around £4,400 each year as a result of the proposed changes.