Link to this page: https://www.socialistparty.org.uk/issue/386/4372
Pensions: Postal workers must show solidarity
MANY ROYAL Mail employees have a final salary pension scheme, the Royal Mail Pension Plan, similar to that of civil service. Staff may retire at 60, and their pension is based on their salary during their last three years' employment.
A Royal Mail worker and CWU member
However, the pension on offer to staff who joined after 1987 pays out a poorer final pension than to those employed before 1987. In 2000 the Royal Mail Retirement Savings Plan was introduced, for employees not eligible for a final salary scheme, with no guarantees as to the level of benefit at retirement.
Royal Mail, like many other companies, took a pensions contributions holiday in the early 1990s. The Royal Mail fund now has a £2.5 billion deficit (£4.4 billion under new accounting rules). So Royal Mail chairman Allan Leighton is considering whether to increase contributions from £450 million to as much as £800 million.
This would make a significant dent in Royal Mail's profits for this year. Royal Mail bosses have cut costs to try to boost profits in many ways, including 30,000 job losses and other cutbacks, closures and outsourcing. No doubt Leighton and Co. will look with interest at government plans to ditch final salary schemes and raise public sector workers' retirement age to 65.
If civil service, local government and other public-sector workers lose that battle, Post Office and BT workers could well be next. CWU members must show solidarity with fellow workers in the PCS, UNISON, NUT and other unions, in the campaign to defend our pensions.
In The Socialist 2 April 2005: