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The union representing Royal Mail’s frontline staff has promised the “strongest possible opposition” to the company’s plans to close its defined-benefit pension scheme, including possible strike action.
The UK postal operator announced today that it would close its scheme to new accrual at the end of next March, saying “there is no affordable solution to keeping the plan open in its current form”.
In response, the Communication Workers’ Union said it would consider a ballot for industrial action if the company goes ahead with the plans.
The union has repeatedly threatened strike action if a closure of the scheme is unilaterally imposed on workers.
Investors were more positive about the plan, however. Shares in Royal Mail rose 1.6 per cent after the announcement to their highest level since January. JPMorgan Cazenove analysts estimated last month that markets have already priced in a £100m a year step-up in pension charges, and investors have welcomed signs of an end to questions over the scheme’s future.
Ray Ellis, CWU acting deputy general secretary for postal services said:
Although Royal Mail’s own consultation exercise revealed massive opposition to its closure plan, the company has decided to ignore the views of its workforce and proceed with closure without consent.
We will not stand by and watch the copany abandon the pension promises it made at the time of privatisation which threatens our members with massive cuts to their future pension benefits and insecurity and poverty in retirement.