Socialist Worker

New threat to post workers' pension rights from Royal Mail

by Yuri Prasad
Issue No. 2088

There was anger last week as Royal Mail announced that it intends to close its final average salary pension scheme to new entrants.

It said that a growing funding deficit was threatening the company’s ability to compete.

The company has previously made clear that it wants to raise the retirement age from 60 to 65, increase employee contributions and reduce benefits.

While government ministers, including chancellor Alistair Darling, rushed to offer their “full support” for the move, postal workers expressed their dismay.

“Being a postal worker is a hard manual job, and not one that we can be expected to carry on doing into our 60s,” a CWU postal workers’ union rep from Leicester told Socialist Worker.

“Closing the scheme to new entrants will create a two-tier workforce, and it is possible that Royal Mail will use that to create division among workers.

“The feeling at my delivery office is that we must fight these proposals, and be prepared to strike if necessary.”

CWU reps are set to meet next week to discuss their response to the announcement. There is a widespread feeling that industrial action will be necessary to force Royal Mail to retreat.

However some in the leadership of the union believe that the “opening up” of the postal industry to competition from private companies – combined with an estimated £6.6 billion shortfall in the pension fund– means that some sort of change is inevitable.

They argue that the union should accept restrictions on new entrants joining the scheme, and allow the raising of the retirement age to 62.

Many CWU reps worry that by signalling a willingness to negotiate, the union has handed Royal Mail the initiative.

“There is a big gap between some in the leadership and the rank and file of the union,” says Mark Dolan, CWU area delivery rep for north London.

“The people I represent ask why, when they have paid into a scheme for more than 20 years, should they now be told that everything will change?

“There is a crisis in the pension scheme, but our members know that it is not one of their making, and they should not pay for it.

“We are a publicly owned company and the pensions liabilities ought to be referred to the government.”

Click here to subscribe to our daily morning email newsletter 'Breakfast in red'

Article information

Tue 12 Feb 2008, 19:06 GMT
Issue No. 2088
Share this article


Mobile users! Don't forget to add Socialist Worker to your home screen.