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Post Office workers to strike over DB closure plans

08 Sep 2016, 13:47

http://www.professionalpensions.com/pro ... sure-plans

Post Office employees are set to strike next week over the planned closure of its defined benefit (DB) scheme and branches.
The Communications Workers Union (CWU) said on 8 September it would launch a 24-hour strike on 15 August, which will also be accompanied by political action in Westminster.

The industrial action, which was first mooted in July, comes after the Post Office advised trustees of the Royal Mail Pension Plan that the Post Office segment should be closed to future accrual by March 2017. All members would then be transferred to the company's defined contribution (DC) scheme.

The latest available figures for the scheme recorded £378m of assets as of 31 March 2015 on an IAS 19 accounting basis.

Closure of the scheme is expected to affect around 3,200 staff.

CWU deputy general secretary for postal Terry Pullinger said: "Today we are announcing the first day of industrial action and if the Post Office is not prepared to change its position it faces an ongoing dispute with our members.

"The proposals from the Post Office to close its pension scheme have no justification. With a surplus of over £130m the Post Office has the best funded pension scheme in the country. In closing it down, the Post Office is stealing the money our members have built up over many years of service and backtracking on its promises to keep the scheme open."

The announcement follows Unite members also voting for strike action in relation to plans to close the DB scheme. Nearly two-thirds of balloted members supported strike action, and the union is now considering when to take industrial action.

The Post Office's network and sales director Kevin Gilliland said it was necessary to close the scheme when its surplus runs out.

He said: "All of our proposals are taken forward with the utmost care for the people they affect and we're proud of our track record in supporting people through difficult changes.

"The business's financial position is improving but we remain loss making. Based on the advice of our actuary, the fund's surplus, which is currently being used to help subsidise the cost of the DB plan, will run out in 2017.

"Once this happens, the costs to the business of meeting existing commitments will significantly increase, and this is not sustainable. We therefore need to close the DB plan to future accrual when the surplus runs out, because it is crucial that we safeguard the benefits that members have already built up."

Last month, Royal Mail also revealed plans to close its segment of the DB scheme to future accrual. It warned it needed to close the scheme after it calculated the cost of running it would grow to over £900m by March 2018.

A number of schemes have this year announced plans to close to future accrual. Last week, Marks and Spencer announced it will close the plan in April 2017, while brick maker Ibstock is currently consulting on closing its scheme.

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