Royal Mail Group has formally launched a consultation on the introduction of the firm’s collective defined contribution (CDC) scheme.
The consultation comes after the Pension Schemes Act 2021 received Royal Assent in February, providing the primary legislative framework for CDC schemes in the UK.
In a statement, Royal Mail Group said: "Together with our unions, we have worked hard over the last few years towards the creation of the Royal Mail Collective Pension Plan (RMCPP), which combines a CDC pension scheme and a guaranteed lump sum at the point of retirement for Royal Mail's UK employees. We believe this arrangement will provide the best possible pension arrangement for our people and our company.
"Before the plan can be launched, we are consulting with our unions as well as reaching out to our people. We have written to all Royal Mail UK employees to explain the plan in detail, and employees will be able to find out more information and ask questions directly to the team through a variety of dedicated internal communications channels. We will announce our decision once we have considered all of the responses after the consultation has closed on 21 November."
It added: "We are pleased that this puts us one step closer to making the RMCPP a reality for our people. We will continue to update our employees on progress as we move towards implementation."
It is understood that, should the consultation go smoothly and have a positive response from members, the RMCPP will be launched in 2022.
Members who have been with Royal Mail for more than one year would stop building up benefits in the Royal Mail Pension Plan (RMPP) and the Royal Mail Defined Contribution Plan (RMDCP) and start building them up in the collective plan instead.
Benefits they have already built up in RMPP or RMDCP would be there for them when they retire.
In a separate joint statement, Royal Mail Group chief financial officer Mick Jeavons, Communications Workers Union deputy general secretary Terry Pullinger and Unite CMA national representative Gary Sassoon-Hales recommended the scheme to workers.
They said: "Together, we have worked hard over the last few years to design an exciting new pension plan for our people and, with consultation underway, we are pleased to see the Royal Mail Collective Pension Plan take a step closer to launch. We all believe that you will be best served by this plan which would provide a lump sum and a wage in retirement in a way that is sustainable and affordable for the business and members."