Royal Mail CDC pensions – another big step forwardPostal, Royal Mail Group (EMP) February 17 2022
Image: Dan Jardine / Shutterstock.com
“Now we should be able to deliver this new scheme, the final fourth pillar of security, in the latter part of this year” says CWU deputy general secretary postal Terry Pullinger in an important message to branches and members…
With a statutory, business-wide formal consultation process having now completed, the introduction of the ground-breaking collective defined contribution (CDC) pension plan now only requires some final, minor legislative work before a formal application can be made to the Pensions Regulator to open the scheme.
The need for a new approach to Royal Mail pensions became apparent several years ago, as a solution to the growing inequalities between longer-serving members and newer recruits, the latter group being inadequately served by the defined contribution scheme that had been introduced for them and the older scheme coming under severe financial and sustainability pressures.
Dignity and security in retirement and a wage for life was the key guiding principle here, which made up one of the four strands of the Four Pillars campaign, and it was the idea of a collective defined contribution (CDC) scheme (now known as the Collective Plan) which was eventually agreed as the best way forward for all.
While the other three pillars – on job security; pay, terms and conditions including the shorter working week; and working together to improve the operation – were all negotiated on directly between the CWU and Royal Mail, the crucial issue of pensions reform needed legislative change and Parliamentary support, as well as the support of the Unite union, which represents management grades within the company.
And therefore, this fourth pillar was always going to, and indeed has, taken some considerable time to achieve. Necessitating debates in the House of Commons, Select Committee deliberations and eventually, the Pensions Schemes Act 2021.
While this Act received Royal Assent last year, there remained a statutory requirement for a formal companywide consultation, and it is this which has just concluded.
And, in a joint statement, Terry Pullinger, Mike Jeavons and Gary Sassoon-Hales – representing the CWU, Royal Mail and Unite union say:
‘Together we’ve designed a new pension plan that gives our people two things: a cash lump sum and a wage in retirement. The consultation on the pension changes is now complete and we’ve considered people’s feedback. We’re excited that this brings the Collective Pension Plan a step closer to launch.’
And in his message to branches and members, Terry welcomes this “milestone” which is a “positive development” and explains that there are still “some further changes to the law required.
“There is anticipation that these final changes to the legislation should be completed by August, as all parties are currently working with the Government on this important matter.
“Once the details are finalised, we can then apply to the Pensions Regulator to open our scheme. After the application process has been completed, we should be able to deliver the new scheme in the latter part of this year.”