6. Why change things?

Moving people from RMPP and RMDCP into the Collective Plan would complete a change that we started in 2018.

At the time, RMPP members were building up a guaranteed income for when they retired. The unions agreed that this was unaffordable for Royal Mail. So, while the benefits that people had already built up were not going to be affected, Royal Mail needed to create a new plan to help people build up benefits in the future.

In 2018, the alternative to this sort of defined benefit plan was an individual defined contribution plan. These help people build up their own individual savings, but do not automatically turn those savings into an income. Royal Mail and the unions wanted to offer people a different kind of defined contribution plan. They wanted a plan that invests people’s money collectively and automatically gives them a wage in retirement. The income section of the Collective Plan would do this.

Before Royal Mail could offer this type of plan, the government needed to introduce new laws. While these laws were being put in place, it was agreed that people could temporarily save into a Cash Balance Fund.

Royal Mail and the Communication Workers Union developed the Collective Plan and are working with the government to introduce the laws that make the Plan possible. Unite has been part of the conversation at every stage.