Royal Mail: Secret pensions robbery plan

The newspaper stated that Royal Mail workers will have their pensions slashed unless they work five years longer.

The move would cost staff members thousands of pounds a year. Some could see their retirement pay halved.

In addition the posties' final salary scheme would be closed to new members from next year.

Last night, on the eve of two weeks of pay strikes, union leaders vowed to fight the "hammer blow" proposals.

Dave Ward, deputy general secretary of the Communication Workers Union, said: "This is a savage attack on pay and conditions.

"Our members aren't going to roll over and accept this. It will only galvanise support for strike action."

The radical plans - which would hit workers at Royal Mail, Post Office and Parcelforce Worldwide - are in a 24 page document leaked to the Mirror.

They are designed to tackle a £6billion shortfall in the pension fund by saving £1.5billion over five years.

The age staff could retire with full pensions would be raised from 60 to 62 next year and 65 from 2010.

Future rises in pensionable pay would be capped at the inflation rate.

Lump sum payments would also be hit. A worker aged 50 today with 30 years' service could have expected a one-off payment of £29,826. This would be cut to £25,515.

The document says: "These changes would gradually reduce Royal Mail's overall pension costs and therefore reduce the future risk to our business, jobs and existing pensions."

It stresses that no decisions have been made and the proposals are to form a basis for consultation. But it also says keeping the existing scheme is not an option.

Many companies have closed final salary schemes to new recruits, including BT, BA, Barclays and HSBC.

But few have taken such punishing action against existing employees, hitting 167,000 workers in one go as Royal Mail are doing. Firms to have taken such a step include Rentokil, ITV, Yorkshire Bank and the Co-op.

Mr Ward said: "It's a stitch-up. They may say they're consulting but that's a charade. It's clear from the work in producing these plans that they're determined to drive them through."

The Royal Mail pension scheme is one of the UK's biggest with more than 450,000 members.

Existing pensioners and senior management would be unaffected.

Union leaders blame past management for the black hole in assets.

For 10 years bosses took advantage of the right to a "pensions holiday", paying nothing into the scheme.

Royal Mail, which has recently lost a string of contracts, said: "There is no formal proposal yet in play."

YOUNGER WILL BE HIT WORST
WHILE all staff will suffer as a result of the changes, younger workers who have joined the business since 1987 will be the biggest casualties.

A 30-year-old with 10 years' service could currently expect to retire with a pension of £15,260 a year.

This would be slashed to £8,764 if the proposals were pushed through.

A new recruit starting at the age of 20 would expect a pension of £17,186 when he retired.

This will plunge by more than half to just £8,575 according to Royal Mail's own figures.

Older workers, who joined before 1987, would be less severely hit as the money they have already paid into the scheme would be protected.

So a worker aged 50 today with 30 years' service who would have retired on £9,942 a year would see that cut to £8,505.