The Post Office is set to close their DB scheme despite being in surplus by £100m.

The Post Office has announced the closure of its Final Salary scheme this September which will affect around 3,500 employees.

The union Unite organised a ballot in which it asked Post Office employees about the pending closure of the defined benefit scheme.

It found that 64% supported industrial action against the plans which could leave them thousands of pounds a year worse off.

The workers will be enrolled in to the company DC scheme from April next year. The DC scheme is already in place and running for newer members of the Post Office's workforce.

Once enrolled the employees who were previously enrolled in the DB scheme will lose the benefits of a final salary scheme and according to the union this loss could be around 30 per cent of their retirement income.

CWU assistant secretary Andy Furey says that scheme members will "suffer twice" under the changes proposed, explaining: "Members will lose future accrual and they lose the difference between the Retail Price Index (RPI) and the Consumer Price Index (CPI) revaluation on the benefits they have built up.

"And on top of all this, the scheme is in surplus – not in deficit. So not only is this all extremely unfair – there is no financial case for the changes either."

With the scheme reportedly being £100 million in surplus and not in deficit, Unite says the Post Office's executive team need to reflect on these changes before making them final as it will affect thousands of their employees.

Earlier this year, The Post Office told its employees that the costs of keeping the DB pension scheme completely open is "simply unaffordable".

The Post Office network and sales director Kevin Gilliland commented: "The business's financial position is improving but we remain loss making. Based on the advice of our actuary, the fund's surplus, which is currently being used to help subsidise the cost of the DB Plan, will run out in 2017.

The post office also looks to make 1700 people redundant by the end of the year.

Published 09.09.2016

ceri.pugh@wilmingtonplc.com