Pensions: postal workers must show solidarity

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.