Bosses at Royal Mail, who last week were revealed to have awarded themselves bonuses of over £4.5 million, this week wrote to their staff to announce the closure of the company’s pension scheme.
The company’s plan could lead to a nationwide post strike this spring.
Royal Mail says that the only way it can “protect pensions”, and plug the estimated £6.6 billion shortfall, is to raise the retirement age from 60 to 65 while reducing the benefits that the scheme provides.
The final salary pension scheme will be closed from 1 April this year.
As well as reducing the value of pensions for thousands of postal workers who retire after 2010, this move will mean that new staff will be offered a scheme with much lower benefits – creating the possibility of a two-tier workforce.
The speed with which management are moving means that the postal workers’ CWU union has a very short time in which to launch a fight to save the scheme.
Union reps from across Britain met in Northampton last week to discuss the campaign and prepare for possible strike action to come.
CWU leaders stressed that Royal Mail are determined to ram through the changes and that a serious fight will be necessary.
Paul Turnbull, the CWU’s area processing rep in Cambridge, spoke at the meeting to demand that the union does not retreat from the current retirement age, or the current benefits.
He told Socialist Worker, “I told the meeting that these so-called reforms are nothing but robbery. Many of our members stand to lose £20,000 and we mustn’t stand for it. Our pensions are deferred wages, not a gift from our bosses.”
The CWU’s postal executive met on Monday of this week and decided to launch a consultative ballot over Royal Mail’s plans – with a recommendation to reject them – from Friday 7 March until Wednesday 19 March in all Royal Mail workplaces.
The executive will meet shortly after to discuss what action to take.
CWU national president Jane Loftus told Socialist Worker that the government will need to intervene to “sort out” the question of pensions funding.
“The consensus among most reps is that we will have to strike to save our pensions,” says Peter Hall, branch secretary of the CWU’s Cleveland branch, who was also at the national reps briefing.
“The people I represent are so angry about this attack that I’m more than confident that we would win a strike ballot over pensions.
“Many of my members are saying that we should never have ended last year’s national strike without a good agreement on pensions, but they would strike again if necessary.
“People are shocked at the idea of working an extra five years to get a smaller pension.
“I deal with medical and legal claims that the union makes in Cleveland. Every week I help people who can no longer do the job because of back and knee injuries they sustain.
“As people get older they become more prone to arthritis and other conditions that are made worse by the cold and the rain that postal workers regularly endure.
“By the time postal workers get to 60 they are knackered. So the idea that we can keep doing a tough physical job until we are 65 is outrageous.”
Over the last week Royal Mail has been organising work time learning briefings on its plans to close the scheme in delivery offices and mail centres across Britain.
According to a CWU rep in the Midlands, the meetings have seen an outpouring of fury from postal workers of all ages.
“Our delivery office manager got us together and showed the company’s DVD that outlines the attack on pensions,” said the rep.
“After he turned off the machine people exploded. Some, particularly those who will just miss the cut off date in 2010 for retiring on full benefits at 60, looked at each other and said, ‘Can you imagine having to do another five years?’
“I’ve never seen people so angry. Everyone shouted at the manager that the company is stealing our pensions. He said that he is in the same boat and is just as pissed off as us.
“There are mixed feelings about how we should respond. Some believe that the union has already sold us out, and that there is nothing more that can be done.
“Others think that the confident spirit that we had during the strike last year can be revived if the union shows it is really serious about fighting.”
There is a growing sense among postal workers that the government, as well as the bosses, are driving the battle over pensions.
Yet some among the union’s leadership have accepted management’s case that “reform” of the pension scheme is unavoidable, and that negotiations over the nature of that change must now happen.
For them, that management are “forced” to talk to the union is in itself a victory.
They believe that renewed strike action will damage the company, making it harder to compete with the raft of private firms that want to cherry-pick the Royal Mail’s business.
They also believe that the best way to get any change is to cosy up to New Labour, hoping that the union’s money can buy influence with decision makers.
That position seems vastly out of touch with the rank and file of the union.
“We feel utterly betrayed by New Labour,” says Peter.
“Like many others, I have opted out of the union’s political fund because I don’t see why we should bankroll New Labour.
“Royal Mail is a public company, and it is clear that the government has a responsibility towards our pension scheme – yet they are backing our bosses all the way.
“While the company was taking a 17-year contributions holiday and refusing to pay into the scheme they were silent. But now the bosses want cuts and Labour ministers are joining in.
“Personally I think that it’s a disgrace that we continue to fund the party that is attacking us.”
It is clear that a lot more is at stake than the retirement age and benefits in the fight to save the pension scheme.
If the bosses get away with this attack it will simply encourage them to launch further assaults on workers’ conditions.
It is vital that the union revives the spirit of last year’s strikes and shows management that it faces a showdown.