Socialist Worker

Is a risky pension scheme in the Royal Mail pipeline?

by Nick Clark
Issue No. 2588

Workers showed they were up for a fight

Workers showed they were up for a fight (Pic: CWU Eastern No 5)

Postal workers’ CWU union leaders could draw up a deal with Royal Mail bosses this week that would leave thousands of workers with a worse pension scheme.

If CWU members back the deal, it would end a dispute that last year saw workers vote by almost 90 percent for national strikes.

Bosses originally planned to transfer people who started working for Royal Mail before 2008 onto a defined contribution (DC) pension scheme. This could pay out less and be at the mercy of the stock market.

But in talks bosses backed away from that in favour of a new “collective defined contribution”—or defined ambition—scheme.

This could be an improvement for workers already on the DC scheme as it guarantees a set wage in retirement. It also means all Royal Mail workers would be on a single scheme—one of the CWU’s key demands.

But the amount paid out still depends on the pension’s stock market value when workers retire—meaning workers on the defined benefit scheme would lose out.

Last week CWU deputy general secretary Terry Pullinger said negotiators hoped to get a deal “nailed down next week.”

Royal Mail has offered to draft the legislation needed to implement the scheme.

It is an improvement from the attack bosses had planned. That’s because CWU members showed bosses they were up for a fight.

Union leaders shouldn’t accept a pension deal that would harm tens of thousands of workers.

CWU members should be ready to reject the agreement—and strike for a better deal for all workers.

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

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