Royal Mail scores victory in pensions battle as union plans to put proposals to the vote

 
Oliver Gill
Follow Oliver
Royal Mail has one of the UK's largest trucking networks

Royal Mail has scored a victory in the fight to shut its mammoth pension scheme after it said one of its two unions will put the plans to its members.

Earlier this year the 501-year old service announced plans to shut its pension scheme after warning costs of keeping it open were spiralling to more than £1bn each year.

The CWU and Unite, Royal Mail's two main unions, have made their own counter proposals.

Read more: Royal Mail pensions closure: £1bn a year is just "not affordable"

Unite, which represents 6,000 management-level staff, will hold a "consultative ballot" on twin-tier proposals, Royal Mail said. Under the plans members will have a choice between a new "defined benefit cash balance scheme", or moving over to a defined contribution scheme.

The cash balance scheme underwrites the value of pension contributions. Members can also benefit from an increase in the value of their investments, but unlike final salary schemes a minimum level of income is not guaranteed.

Such a scheme was proposed earlier this year and has to date been rejected by Royal Mail's largest union, the CWU, which represents around 100,000 employees.

Nevertheless, Royal Mail said the proposal remains available to CWU members.

Unite has been approached for comment.

What you need to know: Royal Mail retires pensions scheme: The what, why and how

Related articles