UK-based union Unite said it will hold a consultative ballot of its 6,000 Royal Mail managers on the latest pension proposals offered by the company’s management.
The Royal Mail said in a statement that it is offering members the choice of joining either a defined benefit cash balance plan, or a defined contribution plan. Royal Mail said it is one of few companies offering to replace one defined benefit plan with another. The balloting of members started this week, and will close on Aug. 7.
“We have had many discussions with the company over the last few months and these have been difficult,” said Brian Scott, Unite officer for the Royal Mail. “However, the Unite negotiating team considers that what is on offer is the best achievable in the circumstances.”
Despite Scott calling the offer the “best achievable” one, the union said that it would not make a recommendation to its members on the package.
“We are committed to holding a membership consultative ballot on the Royal Mail’s latest proposals,” Scott said. “We are not making any recommendation. We think it is important that Unite members have an opportunity to express an opinion on what is being put forward by the company.”
Scott said that the latest position is an improvement from the original proposal.
“One of the main developments is that we will keep the defined benefit pension scheme open, and the lump sum approach being put forward will become a separate section of that scheme,” said Scott. “This will reduce any adverse impact on members’ future retirement incomes.”
Unite has about 6,000 members working for the Royal Mail, which became a privately owned company in 2013. In April, the 500-year-old postal service said it will close its defined benefit pension plan by the end of March 2018 due to diminishing funds.