Royal Mail privatisation plans put pension scheme at risk

Royal Mail could become the latest company to close its final salary pension scheme if government plans to part-privatise the group fail.

The postal service’s pension deficit has more than doubled to £6.8bn in the year to March 2009, and will be close to £10bn when a review is published this summer, the Sunday Times reported.

A Royal Mail spokesman said: “Closing the final salary pension scheme is not something we would want to consider, but might have to, as one of the possible consequences of the government deciding not to go ahead with their [privatisation] plans, including their proposal to take responsibility for the historic pension deficit.”

A proposed law to sell a minority stake in Royal Mail will be heard before MPs in Parliament this month, and is expected to attract tough opposition. Hundreds of Labour backbenchers have already expressed they will not support the part-privatisation move.

Last week, supermarket Morrisons said it would close its final-salary pension scheme for 4,500 existing members, instead operating an ‘average earnings’ scheme,while oil giant BP announced it was closing its scheme to future members. Barclays bank also revealed that it would close its final salary scheme to 18,000 current staff.

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