(Reuters) – Britain’s Royal Mail (RMG.L) and the Communications Workers Union (CWU) stated on Thursday they’d reached an settlement, ending an almost 10-month-long dispute over plans to exchange the agency’s outlined profit pension scheme.
Royal Mail, which has 142,000 workers in Britain, reached an settlement over pensions, pay, a shorter working week, tradition and operational modifications, it stated in a press release.
The CWU has been at odds with Royal Mail since April over its plans to avoid wasting billions of kilos on its pension contributions and had tried to name a strike.
Under the settlement, the present pension plan will shut on March 31 and Royal Mail will swap workers into a brand new “collective defined contribution” (CDC) scheme.
Royal Mail, which was privatised 4 years in the past, is without doubt one of the few massive British corporations nonetheless to have a defined-benefit pension scheme, which pays out a proportion of a member’s last wage decided by size of service.
By distinction, an outlined contribution scheme is a retirement plan during which the employer and worker contribute to an funding fund that’s used to purchase a pension on retirement.
Under a collective scheme, contributions are pooled, as an alternative of being held in a person account, serving to to share danger.
The swap to the brand new scheme is topic to the mandatory legislative modifications. “Royal Mail and the CWU will lobby government to make the necessary legislative and regulatory changes so a CDC scheme can be established,” the company stated.
The settlement additionally features a 5 % pay hike for Royal Mail workers from October 2017 and a one-hour discount to the working week from October 2018.
From April 2019, there might be a 2 % enhance in pay, and an additional one-hour discount to the working week from October 2019, Royal Mail added.
The company added it now expects to ship adjusted working revenue, earlier than transformation prices, of at the least 680 million kilos for 2017-2018.
Royal Mail shares had been buying and selling 6 % larger at 1348 GMT.
Reporting By Justin George Varghese in Bengaluru; Editing by Saumyadeb Chakrabarty and Adrian Croft