Socialist Worker

Are Royal Mail workers voting for a pension scheme that won’t exist?

by Nick Clark
Issue No. 2596

Royal Mail workers in the CWU union are voting on a pensions deal

Royal Mail workers in the CWU union are voting on a pensions deal (Pic: Guy Smallman)

The government could block attempts to introduce a new Royal Mail pension scheme that postal workers’ union leaders are promoting to their members.

Royal Mail workers are voting on whether to accept the deal in a ballot set to end next Wednesday.

But Tory pensions minister Guy Opperman has said the government will not pass new laws needed to introduce a scheme just for Royal Mail. That means Royal Mail workers may not get the deal recommended by CWU union leaders.

CWU leaders want union members to vote for a “collective defined contribution” (CDC) scheme as a replacement to their current pension schemes.

But the scheme can only be launched once the government has passed legislation needed to make CDC work in Britain.

Opperman said the government wouldn’t yet pass the legislation because “there is only one person in the queue at this moment.

“We are not in the business of creating legislation, bespoke pieces, for one party.”

If the government doesn’t pass the legislation then Royal Mail workers would be left on two separate schemes.

Those who began working for Royal Mail before 2008 would lose their current defined benefit scheme.

That means CWU leaders could be left hoping for bosses in other industries to introduce the new scheme—with worrying implications for workers.

University workers have launched big strikes to stop pension cuts. Now their bosses are considering CDC schemes as a way to force the cuts through.

Bosses prefer CDC schemes because they don’t guarantee a specific wage in retirement. Instead the amount paid out depends on how well bosses have invested the pension pot on the market.

If there’s a crash, workers will get less. That’s bad news for anyone on a defined benefit scheme—including 100,000 Royal Mail workers—where there’s a guaranteed payout based on contributions and salary.

Striking university workers recently voted overwhelmingly to reject a pensions offer that is better than a CDC scheme because they won’t accept any cuts. CWU members could do the same.

They forced big concessions from bosses by delivering a huge strike vote. Voting no to the deal—and striking—could win more.

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