Jul 14, 2017

Royal Mail offers staff new defined benefit pension scheme

Royal Mail has offered staff a new defined benefit pension scheme which has been welcomed by one of the two unions representing its workers, raising hopes that the postal operator will be able to reach an agreement without facing national strike action. In an update on Friday, Royal Mail said it has made a new offer to members that includes the option of a more affordable replacement defined benefit scheme. Royal Mail stressed that it "Is one of few companies offering to replace one defined benefit scheme with another", as many companies struggle to honour old pension promises. Royal Mail calculated earlier this year that the annual costs of maintaining its old defined benefit scheme would triple to £1.3bn if no changes were made. Royal Mail believes that the risk to the company of the proposed defined benefit cash balance scheme would be materially lower than under the current plan and is a manageable risk for us.

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