UK. Royal Mail moves ahead with CDC scheme
Royal Mail, the Communication Workers Union and Unite have agreed to progress plans to introduce a new collective defined contribution scheme, the first of its type in the country, following a consultation with members.
Royal Mail launched its consultation in September 2021, in which it laid out plans for the new Royal Mail Collective Pension Plan.
Under a CDC arrangement, members pool investment and longevity risk and contribution rates for employers and employees are set in advance.
The group finalised and confirmed its contribution rates in November, the employer paying in 13.6 per cent and employees having a standard contribution rate of 6 per cent.
The scheme will be an opt-out arrangement, with members who choose not to participate usually being enrolled in Nest instead. It will also contain a cash lump sum section, which, if accessed at the retirement age of 67, would give members a retirement income equal to at least 3/80 of the member’s pensionable pay for every year in work.
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