About 3,500 Post Office workers are being forced to take a cut in pension benefits as the government-backed service tries to cut costs.
About half the Post Office’s 7,000-strong workforce is being forced to shift from a final salary pension scheme to a defined contribution scheme, a move that unions say could cut retirement benefits by 30% or even more in some cases.
The planned pension cuts were announced just days after the Post Office said it would be looking to put 20 more Crown offices into private hands, taking the total this year to 85 in a process opposed by unions who see it as a form of backdoor privatisation of the service.
The Post Office was already facing criticism after agreeing to hand over up to 61 branches to WH Smith in April including some of the 39 Crown offices flagged up to be put into private hands in January. Before that, 50 Crown offices, which are run directly by the Post Office, had been franchised or otherwise offloaded since 2013.
Unite and fellow Post Office union the CWU are to ballot members on protest action over the cuts to pensions. Unite is also calling on Theresa May’s new government to investigate the financial difficulties of the Post Office, which remained publicly owned after the part-privatisation of the Royal Mail postal service in 2013.
Brian Scott, Unite officer for members in the Post Office, said: “This is a sad day for Unite members in the Post Office who are being let down by senior executives that failed to secure the necessary funding to ensure a long-term future for the scheme. The Post Office wants to close this scheme at a time when it is still in surplus to the tune of as much as £100m. There is no need to close the scheme and Unite members are furious.”
Andy Furey, a CWU official, said: “CWU is completely opposed to the closure of the Post Office defined benefits pension scheme. This is another cost-cutting exercise to prop up their balance sheet at the expense of staff. The scheme itself is in rude health, carrying a surplus. We will be balloting our members for strike action over this attack on their quality of life after retirement along with our opposition to the company’s dogged pursuit of closures, privatisation and up to 2,000 job losses.”
The Post Office’s final salary scheme was closed to new members in 2008 but long-serving staff have continued to accrue benefits since then.
The Post Office has now decided it wants to close the scheme to new accruals and from March next year members will only be able to build up benefits in a new defined contribution scheme. Unlike a final salary scheme, which promises a specific income, the income from a defined contribution scheme is dependent on the amount paid in and the performance of the fund’s investments.
The Post Office said it had made its recommendation to the pension fund’s trustees but no final decision had been taken. Natasha Wilson, the Post Office’s director of reward and pensions, said: “This is clearly an important decision and both we and the trustees take our stewardship responsibilities very seriously. It is only right that the trustees give due consideration to our recommendation in reaching a decision, and we are fully supportive.”
