CWU to discuss strike threat over Royal Mail pension scheme closure plan

Updated: 

The threat of industrial action by Royal Mail workers over plans to close the company's defined benefit pension scheme next year is being discussed today.

The Communication Workers Union has made clear that any attempt to impose change without agreement will be met with the "strongest possible opposition" including a ballot for industrial action.

The issue will be debated at the union's annual conference in Bournemouth.

Royal Mail said the pension plan was currently in surplus but it expects this to run out in 2018. 

The privatised company's annual pension contributions are currently around £400 million.

It said that if no changes are made, the contributions could more than double to over £1 billion in 2018. 

"We have concluded that there is no affordable solution to keeping the plan open in its current form.

"Therefore, the company has come to the decision that the plan will close to future accrual on 31 March 2018, subject to trustee approval," said a statement earlier this month.

The CWU said that in place of the current defined benefit scheme, Royal Mail plans to put all members into "inferior" money purchase alternatives. 

On average, employees face losing up to a third of their future pensions, said the union.

For a 50-year-old worker earning £25,000 a year and retiring at 65, this would equate to a loss of £4,392 a year, it was estimated.

The CWU has put forward an alternative proposal for a defined benefit Wage in Retirement Scheme which it said would provide the company with "a credible, cost efficient and lasting pension solution for all its employees".