Defined Benefit  

Royal Mail pension dispute goes to ballot

Royal Mail pension dispute goes to ballot

Royal Mail might be facing its first nationwide strike since it was privatised four years ago, as workers are set to vote on industrial action in a dispute over pensions.

According to FTAdviser sister newspaper the Financial Times, the Communication Workers Union said yesterday (5 September) that it would give formal notification to ballot its roughly 100,000 members at the company, after talks with management failed to deliver a resolution.

Royal Mail had a deadline which ends today (6 September) to solve its long running pension dispute with workers.

Earlier this year, the UK postal operator announced it would be closing Royal Mail Pension Plan, its current defined benefit (DB) scheme, to future accruals from next year.

Following union opposition, the company is now offering members the choice of joining either a DB cash balance scheme or a defined contribution scheme.

From 1 April 2018, the DB cash balance scheme would provide members with a guaranteed lump sum at retirement.

In a video posted on the union’s Facebook page, Terry Pullinger, deputy general secretary, said: “After very serious consideration it is the view of the [CWU] postal executive that sufficient progress has not been made [in talks with Royal Mail].

“Unfortunately, we have not been able to shift the employer on some of the key principled issues affecting your employment, standard of living and retirement security, and as a consequence we will absolutely be serving notice to the employer tomorrow of our intention to ballot you, our members in Royal Mail group”.

Alongside the pension issue, Royal Mail has been in negotiations with the CWU over pay. It said it had “offered to continue working towards a new pay deal”.

A company spokesperson told the FT that “Royal Mail is very disappointed that the CWU has announced it will issue a formal notice to ballot for industrial action".

The spokesperson said: "We believe there are no grounds for industrial action.

“We remain committed to reaching a negotiated agreement with the CWU on pay and pensions, and other issues we have been discussing. A ballot does not necessarily mean there will be industrial action.”