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Royal Mail confirms historic pensions deal

2nd Feb 18 10:51 am

Take a look

Royal Mail and the Communication Workers Union issued a joint statement yesterday confirming a deal has been reached on pay, working hours and pensions, you can view the statement here.

Pension terms

  • As previously announced, closure of defined benefit scheme from 31 March 2018
  • Launch of a Cash Balance scheme with a 13.6 per cent employer contribution
  • Aspiration to launch a Collective Defined Contribution scheme, subject to necessary legislation
  • Boost to contributions for members of the existing Defined Contribution scheme

Hargreaves Lansdown comment

Tom McPhail: “As an employee, if you’re going to lose your final salary pension scheme, this is a pretty good way to do it. The ongoing employer contributions at £400 million and 13.6 per cent of salary are very generous compared to the majority of Defined Contribution schemes. For members of the Cash Balance scheme there will still be an element of certainty around their benefits. The plans to launch a CDC scheme will be watched with keen interest by the pensions industry, which has very mixed feelings about the viability of such schemes.”

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