CWU & Royal Mail welcome CDC pensions ‘green light’

Postal November 6 2018

Terry Pullinger predicted this morning that the introduction of a collective defined contribution (CDC) pension scheme will be a “very important development in social history.”

Reacting to the “green light” announcement today by the Government, our deputy general secretary postal (DGSP) said that this measure – a key pillar of the union’s successful Four Pillars campaign – would “introduce a tangible solution for 141,000 decent working people,” providing “genuine hope for an occupational wage in retirement pension running alongside their state pension.”

A public statement released by the Government’s Department for Work & Pensions (DWP) led with the headline: “New occupational pension schemes given green light by Government” followed by a series of bullet points, the first of which announced: “Government to legislate for Collective Defined Contribution pensions.”

The formal government consultation – a necessary precursor to legislation – opens today and the DWP Minister for Pensions and Financial Inclusion Guy Opperman said that he was “grateful to Royal Mail and the Communication Workers Union for their assistance in getting us to this point.

“Collective defined contribution pension schemes are an important innovation which will provide more choice and flexibility for pension scheme members and employers,” Mr Opperman continued, explaining that the pre-legislative consultation would “hear the views of the pensions industry as we prepare to introduce CDC pension schemes.”

In his response to the news, Terry Pullinger said that the union “very much welcomes this significant milestone announced by the Minister.

“We absolutely believe that retirement dignity and security would be swept aside for working people unless this important innovation in pension choice is enabled.

“This is no longer about the indulgence, luxury or comfort of academic opinion, it is about introducing a tangible solution for 141,000 decent working people, that provides genuine hope for an occupational wage in retirement pension running alongside their state pension,” he pointed out.

“The CWU and Royal Mail Group are ready to lead and illuminate a path for others to follow should they choose. If not us then who, if not now when?

“Give us our moment and we will make a very important development in our social history.”

On behalf of the company, chief governance and risk officer Jon Millidge said that he was “delighted” by this morning’s news.

“Earlier this year, Royal Mail and the CWU reached agreement to introduce a CDC scheme subject to the necessary legislative and regulatory changes being made and the consultation launched today is a major step forward in our campaign to allow us to offer a CDC scheme for our 141,000 employees as soon as possible,” he added.

“As the provider of around one in every 190 jobs in the UK, Royal Mail is committed to delivering the best possible pension arrangements for our people and we believe CDC is a progressive option which meets our objectives of providing sustainable, affordable and secure future retirement arrangements.

“Royal Mail and the CWU want to see CDC become a reality in the UK, and we hope the required legislation will be introduced at the earliest opportunity.”