http://www.iomtoday.co.im/article.cfm?i ... hyear=2018
A postal union says it will defend a ’wage in retirement’ pension scheme for its 300 island members.
Terry Pullinger, deputy general secretary (postal) of the Communication Workers’ Union, visited the island this week as talks began over possible changes to the Isle of Man Post Office final salary pension scheme.
The Post Office pension scheme is entirely separate from other government pension schemes. Unlike the unified pension scheme, it is fully funded and not in deficit.
But the latest valuation identified that a further £700k per annum is required to fund the future cost of the scheme for existing members.
And Mr Pullinger said that while the current scheme would be kept on for current members, the management is considering closing it to new entrants who would join a defined contribution scheme instead.
He said: ’We want to retain a wage in retirement pension scheme and don’t want to pull up the ladder to the next generation.’
The CWU has some 300 postal worker members in the Isle of Man.
Mr Pullinger (pictured above) said: ’We made changes to our scheme some time ago. The retirement age was raised from 60 to 65. It has stood us in good stead. We have been pragmatic and progressive in the past.
’Our scheme is fully funded. It’s not in deficit. The latest valuation shows there needs to a bigger contribution to the scheme. It’s very much an accountancy thing. The company’s response it seems to me is based on conventional wisdom - i.e. threats to employment and retirement security. Defined contribution schemes produce an inadequate outcome for people.’
He said any change should be in the spirit of what has been done elsewhere in government, where the final salary scheme has been retained but contributions increased in phases.
Mr Pullinger said: ’Obviously, we want to defend our scheme. We are open-minded about a solution. It should be in the spirit of how they have looked at other defined benefit pension schemes which produce a wage in retirement.
’The position now is we are in the process of starting a conversation with the employer. We want to be clear there are no red lines. It should also reflect that postal workers are public sector workers.’
In a statement, Isle of Man Post Office said it currently offers a defined benefit contribution pension scheme which is funded in respect of the value of liabilities accrued to date.
It said: ’This is a much better position than many companies find themselves in and reflects the positive actions taken in collaboration with the CWU the last time a scheme funding issue arose.
’Isle of Man Post Office’s key objectives are to protect its core services to the public, whilst maintaining its long term financial viability and the position of existing members of the pension scheme.
’Closing the pension scheme to new members is one of the options being considered to reduce risk to both the Post Office and existing members of the scheme.
’The latest valuation identified that a further £700k per annum is required to fund the future cost of the scheme for existing members.
’This will take total pension costs to £1.5m per annum or 21% of total salaries. This is a significant increase and the impact of this on Isle of Man Post Office and the pension scheme must be addressed.
’We are at the very start of negotiations on future options with the CWU and do not propose to make any further public comment.’