Royal Mail consults on CDC scheme proposals

Royal Mail has launched a consultation on the Royal Mail Collective Pension Plan, seeking views from CWU, Unite, employees of Royal Mail Group and employees of RM Property and Facilities Solutions Limited currently in the Royal Mail Pension Plan (RMPP).

Under the proposals, those who have been with Royal Mail for more than 1 year would stop building up benefits in the RMPP and the Royal Mail Defined Contribution Plan (RMDCP), and would instead build them up in the collective plan.

Benefits they have already built up in RMPP or RMDCP would be there for them when they retire.

A website has also been launched by Royal Mail to help address the key questions that members may have on the consultation, which closes on 21 November 2021.

Plans for a collective defined contribution (CDC) style Royal Mail pension scheme were confirmed in 2018, with Royal Mail subsequently working with The Communications Workers Union to secure an agreement on plans for UK’s first CDC scheme.

Member support for the agreement was secured in March 2018, with Royal Mail and CWU working together to urge the government to introduce the appropriate legislation.

A consultation on CDC was later launched by the government in November 2018, with plans to include CDC legislation in a Pensions Bill then confirmed in the Queen’s speech in October 2019, and finally passed into law earlier this year in the Pension Schemes Act 2021.

A joint statement on the consultation from Royal Mail Group chief financial officer, Mick Jeavons, CWU Deputy general secretary, Terry Pullinger, and Unite CMA national representative, Gary Sassoon-Hales, said: “Together, we have worked hard over the last few years to design an exciting new pension plan for our people and, with consultation underway, we are pleased to see the Royal Mail Collective Pension Plan take a step closer to launch.

“We all believe that you will be best served by this plan which would provide a lump sum and a wage in retirement in a way that is sustainable and affordable for the business and members.”