Royal Mail stares down the barrel of shutdown as pension talks flounder

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Royal Mail announced on Friday Unite will ballot its 6,000 managerial staff on pension changes (Source: Getty)

Hopes of averting a complete shutdown of Royal Mail are fading fast after the firm’s largest union admitted pension closure talks have reached an impasse.

The Communication Workers Union (CWU), which represents 110,000 of the 501-year-old firm’s staff, rejected a new offer from the Royal Mail.

CWU deputy general secretary Terry Pullinger told City A.M. “the mood music” was that “the talks on pension are over”.

Pullinger said the CWU had not given up hope of getting back round the negotiating table but time was running out.

“We are heading for dispute, I don’t think there is any doubt about it,” he said.

Absolutely. There is no question. Emphatically. There will be industrial action within Royal Mail if things don’t change.

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

On Friday, Royal Mail revealed new pension proposals to replace the final salary pension schemes that are due to close in March 2018. Unite said it would ballot its 6,000 managerial-level staff on the proposals.

Royal Mail announced plans to close its mammoth pension scheme in January. In response the CWU put forward a counter-proposal of new scheme that invested in riskier assets and where pension increases were negotiated on an annual basis.

CWU plans were rejected by Royal Mail, which a spokesperson for the firm said did not “meet the fundamental principles underpinning our 2018 Pension Review. They are: sustainability, affordability and security.”

“We held a small roundtable event to test our thinking. We had people from the department of work and pensions and different experts in the room,” said Pullinger, adding that the response had been “very good”.

Lot more proactive

And he criticised Royal Mail’s rejection, saying: “If you were working with the right people, the talks would be a lot more proactive.

"We don’t think the exploration of our idea is finished.”

The Royal Mail spokesperson said: “Any industrial action – or threat of it – undermines the trust between Royal Mail and its customers. When we lose business, we lose money. There will be less money to fund jobs, pensions and the generous terms and conditions we offer.

If this proposal is rejected or if there is industrial action then the company may be forced to withdraw the proposal.

The spokesperson continued: "We have had extensive talks with our unions, Unite/CMA and the CWU, on a sustainable and affordable solution for the provision of retirement benefits for plan members after 31 March 2018. We believe our latest proposal is fair and compares favourably with the retirement benefits offered in our industry and by other large UK employers."

Read more: Royal Mail scores victory in pensions battle royale

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