End of an era? Post Office considers closing door on final salary pension scheme
Another final salary pension has taken a step closer to biting the dust today, as it emerged the Post Office was considering shutting the door on its scheme and carting its members over to a defined contribution (DC) offering.
The organisation has recommended the pension trustees close the scheme to future accrual at the end of March next year, and the trustees have asked for time to consider their options.
Unlike many of the country's 6,000-odd defined benefit pension schemes, the Post Office's is not running a deficit and, rather, is running a £100m surplus. The scheme has around 3,500 members.
Slamming the plans, Unite said it would be approaching its members about industrial action, including a possible strike. The union also called on government, which ultimately owns the Post Office, to investigate how the organisation had become "a financial basket case".
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According to Unite's calculations, staff being moved to the less generous DC scheme would also lose about 30 per cent of their retirement income going forward.
"Our members have invested years of loyal service to the Post Office and for them to have the pensions rug pulled from under them is completely unacceptable," said Brian Scott, Unite officer for members in the Post Office. "It is an act of pension sabotage by the employer."
The decision was reached after a lengthy consultation period. At one point, the scheme could have been shut as early as the end of next month.
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"This is clearly an important decision and both we and the trustee take our stewardship responsibilities very seriously," said Natasha Wilson, director, reward and pensions at the Post Office. "It is only right that the trustee give due consideration to our recommendation in reaching a decision, and we are fully supportive."