Post Office staff face greatly reduced retirement incomes as the Post Office announced the closure of its final pension scheme today (Thursday 14 July), Unite, the country’s largest union, has warned.
The union condemned the Post Office, ultimately owned by the government, for failing to provide adequate financial provision for the 3,500 members in the scheme, despite the fact that the pension scheme has a surplus of about £100 million.
Unite demanded that Theresa May’s new government investigate how the Post Office has become ‘a financial basket case’ – and warned that an industrial action ballot would be held to defend members’ retirement income.
The Post Office confirmed that it has asked the pension scheme trustees to close the scheme at the end of March 2017.
There are about 3,500 staff affected and the Post Office has indicated that the total number of redundancies this year could reach 1,700, of which 1,100 are pension scheme members.
Unite calculates that under the defined contribution scheme from next April, based on the vagaries of the stock market, staff will lose about 30 per cent of their retirement income going forward – thousands of pounds a year. The defined contribution scheme is already in operation for other members of the Post Office’s 7,000-strong workforce.
Brian Scott, Unite officer for members in the Post Office said: "This is a sad day for Unite members in the Post Office who are being let down by senior executives that failed to secure the necessary funding to ensure a long term future for the scheme.
"The Post Office wants to close this scheme at a time when it is still in surplus to the tune of as much as £100 million. There is no need to close the scheme and Unite members are furious.
“The management wants to use the surplus to ‘buy out’ the liabilities from an insurance company. The Post Office is operating in a way that presents this surplus in as low a way as possible. This is an act of misinformation and exploitation by an unscrupulous employer.
"These pension proposals mean that 31 per cent of current employees, who will be affected by redundancies, are members of the pension scheme and a number of these will be denied access to pension related benefits. They will lose thousands of pounds a year in retirement income.
“Unite has no alternative, but to seek a mandate from its members for industrial action, including strike action. We cannot sit back and allow this to happen.
“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. It is an act of pension sabotage by the employer.
"Unite will also be calling on government to initiate an immediate investigation into the Post Office and how it has allowed it to become such a financial basket case.
"The senior management team has failed to challenge the government regarding future funding and simply kowtowed to whatever instructions were handed down by ministers.
“It was the bosses’ duty to challenge the Post Office’s ultimate owner - the government - and they have failed spectacularly to do so. They should accept responsibility for their failures and resign."
Unite has a total of 860 managerial members working for the Post Office. There are 11,500 post offices across the UK.
Notes to editors:
For more information please contact Unite senior communications officer Shaun Noble in the Unite press office on 020 3371 2060 or 07768 693940.
Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.