View more on these topics

DB scheme closure results in Royal Mail strike vote

Royal MailNearly 90 per cent of Royal Mail union members have voted in favour of strike action after the postal service’s defined benefit pension scheme was closed.

While a new defined contribution set-up means combined employee and employer pension contributions could almost reach 20 per cent, The Communication Workers Union described the pension changes as an “attack on the pension rights of hard-working postmen”.

Union executives will meet later this week to decide next steps, but the vote, which saw 70 per cent turnout, leaves open the possibility of a Christmas walkout. Royal Mail’s strike adds to others including at Capita and the Bank of England where campaigners have referenced pension rights as a reason for industrial action.

Hargreaves Lansdown senior pensions analyst Nathan Long says: “Royal Mail’s decision to close their defined benefit pension scheme is entirely in keeping with many employers keen to cap the uncertainty of future pension payments. Delivering on these changes is proving more challenging, with the threat of industrial action now hanging over the busy Christmas period.

“Two replacement schemes have been tabled. Both offer generous pension contributions in comparison to most employers. Whilst the pension benefits are undoubtedly being watered down, a first class retirement is still available for staff who maintain membership throughout their working life.”

Recommended

Online-Shopping-Supermarket-Platform-Technology-700.jpg

Platform tech firms fight it out for client wins

Platform technology provider Bravura is not concerned about the dominance of rival FNZ in the market, saying the companies’ differing business models mean they attract different clients. In the UK advised platform market, Bravura is currently running the technology upgrades for Fidelity Fundsnetwork and Royal London-owned platform Ascentric. Nucleus also uses Bravura software. However, competitor […]

FCA logo glass 620x430
3

FCA sets out enforcement stance for firms unprepared for Mifid II

Regulator will take a different view of firms that have “deliberately flouted” the EU directive The FCA will not take enforcement action against firms that do not meet all Mifid II requirements by the day it comes into force where they can show they have taken steps to comply with the regulation. In a speech […]

8

Nutmeg losses pass £9m

Robo-adviser Nutmeg has seen its losses increase again as it continues its search for profitability by building an advice service. While turnover increased from £1.7m to £2.6m for the year to December, expenses also increased by more than a million, resulting in an annual loss of more than £9.3m, up from £8.9m in 2015. The […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Most private businesses have realised that they cannot afford to sustain such open ended liabilities, the problem with Royal Mail is that benefits under nationalisation are State funded, so there is still a Public Sector mentality when it comes to pay and pensions, the taxpayer will foot the bill.

    I recently came across a case where a member wished to leave the scheme but could only transfer to another DB scheme, so I can imagine that members are not happy that they are trapped. 20% contributions does sound like a good deal though, compared to most.

  2. DB schemes have always been the best from an empolyees point of view. Employers always complaining about he “open cheque books syndrome” of DB. However the defecits are usually brought about because of the assumptions used, if you look forward to far the assumptions are penal, if you use shorter term assumptions the results are much healthier. The rest of the damage was caused by Gordon Brown stupid celtic accountant. everything he did was a mess. However the conservatives could reverse the damage or at least arrest the damage process and allow the ACT to be untaxed.

Leave a comment