Royal Mail response to pay and pensions negotiations

Royal Mail has announced it has responded to the report from the mediator between it and its unions over the current pay and pensions negotiations.

According to Royal Mail, “The mediation process was helpful in bringing Royal Mail and the CWU together to advance the discussions. Mediation has helped both parties to better understand their respective positions.

“The mediator’s report made a number of recommendations. These are not legally binding on either side but have been useful in framing further discussions. Royal Mail and the CWU are continuing talks with the aim of reaching agreement on the full range of issues under discussion. Agreement on certain issues is more advanced than on others but all issues remain open for negotiation and final agreement. Further announcements will be made in due course.”

Royal Mail has summarised the mediator’s recommendations:


“Royal Mail and the CWU should commit in principle to the future introduction of a Collective Defined Contribution (CDC) scheme with a Defined Benefit element.

“To support the introduction of a CDC scheme for all, Royal Mail and the CWU should establish a Pensions Forum. The Forum will have responsibility for lobbying the Government to make the necessary legislative and regulatory changes so that a CDC scheme can be established, and for overseeing its governance.

“In the meantime: For members of the Royal Mail Pension Plan (RMPP), Royal Mail should implement – from 1 April 2018 – a Defined Benefit cash balance scheme on the terms already proposed by the Company.

“In addition, existing Royal Mail Defined Contribution Plan (RMDCP) members with five years’ or more continuous service in the standard section of RMDCP should have the option of joining the Defined Benefit cash balance scheme.

“Royal Mail should auto-enrol current and future members of RMDCP to the top tier of contributions (10% from the Company and 6% from the member).

“Pay and the working week

“From April 2017, an increase of 2.6% including base pay, overtime and allowances.

“From April 2018, an increase of 2% to base pay.

“During 2018-19, a one hour reduction to the working week (currently 39 hours) on the condition that Royal Mail and the CWU work together on a range of initiatives, including delivery methods trials, automated hours data capture and later delivery times.

“Delivery times

“Last delivery time should move back by 30 minutes to 3.30pm in urban areas and 4.30pm in rural areas.

“Royal Mail and the CWU working more closely to advance the Agenda for Growth objectives

“Royal Mail and the CWU need to work more closely together to improve working culture.

“Review the Agenda for Growth agreement in 2019, as planned.”
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