Future of the Royal Mail Pension Plan (RMPP)
Attached for your information is a letter from Royal Mail (Appendix A) notifying Royal Mail Pension Plan members of the company’s view that it cannot continue to run the plan in its current form beyond March 2018. Members of the Royal Mail Defined Contribution Plan (RMDCP) are not directly affected (Appendix B).
At this stage, it is important to stress that the current RMPP scheme will continue in its present form until March 2018 and any changes after that date will not affect members’ pensionable service accrued up to March 2018. Members of the RMPP can therefore expect their current pension provisions to continue up to that date.
However, if the RMPP scheme is closed in March 2018, as the business is currently proposing, members will be unable to accrue further years of service which will significantly impact on their future pension provision.
In light of Royal Mail’s serious and unwelcome announcement, we are issuing this LTB with a short leaflet (Appendix C) to set out the latest position and the Union’s response. The CWU do not accept that future closure of the RMPP is inevitable and, at the Policy Forum in March, we reaffirmed our commitment to “safeguard the future of the Royal Mail Pension Plan”.
In our recent discussions with the business we have challenged their rationale for closing the RMPP in its current form after March 2018 and questioned the financial assumptions and projections on which the decision is based.
We have also made it clear that we intend to hold Royal Mail to the legally binding commitments on pensions set out in the Agenda for Growth Agreement (AFG). This said that “both parties agree that pension benefits represent a key element of the reward package and that the future of that benefit can best be maintained through the terms of the legally binding agreement and by the Company and the Union jointly developing future pension strategy”.
While the Union recognises the difficulties we face addressing this issue going forward, we remain determined to seek a mutually acceptable solution that keeps the RMPP open after March 2018. At the same time, the Union will continue to press for improvements to the position of members of the Royal Mail Defined Contribution Plan (RMDCP) to ensure they are also provided with a decent income in retirement.
Royal Mail’s letter to RMPP scheme members says they are “working with our unions to agree a proposal about the pension benefits the company can afford to provide after March 2018”.
Discussions with the business will continue in pursuit of the Union’s policy objectives and in line with the terms of our legally binding agreement.
Further updates will be provided in due course.
Any enquiries relating to the content of this LTB should be addressed to the DGS(P) Department quoting reference 24111a.
Acting Deputy General Secretary (Postal)
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