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Royal Mail managers reject pension deal

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  • Royal Mail managers reject pension deal

UK - Officials at the union Unite have warned the rejection of proposed reforms to the £23bn (€30bn) Royal Mail defined benefit scheme by 85% of its member managers could lead to industrial action if Royal Mail refuses to respond.

The trade union balloted its members over the final proposed changes to the pension scheme, announced by Royal Mail at the beginning of March, which would see the normal retirement age increase to 65 from 2010, and for the scheme to be closed to new members from March 31, 2008.

However, Unite claims the proposals - which resulted from a consultation issued in November 2007 - were the same as the original changes put forward by Royal Mail in April 2007, and warned the company was asking employees for "too much too soon". (See earlier IPE story: Unions urge rejection of Royal Mail deal)

As a result, 85% of Royal Mail managers belonging to Unite have rejected the deal, which Paul Reuter, the Unite national secretary, claimed was a "clear message" for the organisation to "sit down with the unions and negotiate a sensible agreement".

He said: "This is a massive rejection of Royal Mail's decision to reduce the future pensions of thousands of working people. It would be absolute folly if the business were to ignore their loyal staff."

Reuter confirmed the union would now invite Adam Crozier, chief executive of Royal Mail, to work with them to "find a sensible solution to this difficult problem", as Unite does not believe it is in the "best interests" of the members, the business or the customers to "rush into a further period of industrial unrest".

That said, the union warned the company that if it "does not respond to the clear view of their staff then Unite will be left with no choice than to consider balloting for industrial action".

However, Royal Mail claimed "after discussions on pension change which began nearly a year ago, the unions, including Unite, signed a deal fully agreeing the essential changes to the pension plan which are taking effect on 1 April".

The spokesman pointed out the company has "no alternative but to reform the pension plan", as Royal Mail is currently making annual cash payments of around £850m to cover both ongoing contributions and the deficit, which at the end March 2007 was valued at £3.4bn.

"Currently, Royal Mail is paying the equivalent of 30% of pensionable pay for postmen and women into the fund and even after the changes we are making, we will still be making generous contributions of around 21%, far higher than industry generally - but there is no change to members' contributions which remain at 6%," said the Royal Mail spokesman.

The Communication Workers Union (CWU), which also represents Royal Mail staff, is meanwhile conducting its own vote on whether to accept the pension deal which will close on March 25, and these results are expected to be announced on March 26, 2008.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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