Royal Mail to close DB pension scheme

Royal Mail will close its defined benefit (DB) pension scheme next year after consulting with members about its future. The scheme has 90,000 members and is currently in surplus, according to the BBC.

However, Royal Mail said the scheme’s surplus will run out next year. As a result, the scheme will close to new accruals in March 2018. It closed to new members in 2008.

Royal Mail currently contributes £400 million a year to the DB scheme but this will have to increase to £1 billion next year, the company said.

‘We have concluded that there is no affordable solution to keeping the plan open in its current form,’ Royal Mail said.

‘Therefore, the company has come to the decision that the plan will close to future accrual on 31 March 2018, subject to trustee approval.’

The Communication Worker Union (CWU) condemned the closure and threatened strike action as a result of Royal Mail’s decision.

Ray Ellis, acting deputy general secretary (postal) at the CWU, said the union would take action on what it sees as a decision that goes back on promises made when Royal Mail was privatised in 2012.

‘CWU has made clear that any attempt by the company to impose change without agreement will be met with the strongest possible opposition including a ballot for industrial action,’ he said.