Will the pension changes affect you?
Royal Mail has begun talks over changes to its salary pension scheme, this is due to threats of strike action from unions.
The FTSE 100 company has said it will struggle to afford the rising cost of its contribution to the defined benefit pension plan from 2018.
This will affect 90,000 scheme members.
Unite will consider strike action if Royal mail does not “respond positively”, the CWU also said “unagreed” changes would also face a ballot.
Royal Mail would like to see members contribute to a defined contribution plan, this basically means the company and staff would contribute to a pension pot with no guarantee of what the final payment will be.
The Royal Mail current pension plan has a £1.7bn surplus but Royal Mail predicts that this will run out in 2018. The company currently contributes £400m a year and says it is “not affordable”.
They also predict that this will rise to more than £1bn in 2018.
It said: “With our unions, we have been actively exploring possible changes to potentially enable us to keep the plan open on a defined benefit basis after March 2018 as part of our pension review process.”
“We will continue discussions with our unions during and after the consultation. We will carefully consider feedback and any affordable proposals that members or their representatives make.”