At last, Royal Mail (RMG) has reached an agreement with its workers’ union. It’s current pension plan is set to close from March this year to be replaced with collective defined contribution scheme with a defined benefit cash balance scheme to sit alongside it. Pension obligations are now expected to cost around £400m per year - much better than the £1bn annual costs that management had previously feared if the union got its way.
Chief executive Moya Greene called the agreement an “affordable and sustainable solution”, adding that it shows that disputes can be resolved without “damaging industrial action”. Group operating profit is now expected to be £680m in the year to March 2018, though this is before transformational costs have been taken into account. Employees will also get a 5 per cent pay increase and one hour shaved off their working week.
