Royal Mail and the Communication Workers Union have reiterated that they have "reached an agreement in principle" on pensions, pay, a shorter working week, culture and operational changes. The union's executive recommends that CWU members vote in favour of the proposals in an upcoming ballot.
The agreement includes the closure of the Royal Mail Pension Plan, a defined benefit scheme, to accrual on March 31 this year. Instead, employer and union will work towards the introduction of a collective defined contribution scheme, with a DB cash balance scheme alongside it.
The secondary legislation for CDC is still outstanding after the Conservative government put the idea on the backburner in 2015.
Until a CDC scheme can be established, "transitional pension arrangements will be put in place from 1 April 2018 until a CDC scheme can be established. These comprise a DBCBS and an improved defined contribution scheme", the joint statement said.
Royal Mail and the CWU add that the ongoing annual cost of pensions will still be about £400m.
