UPDATE 1-Labour union to fight Royal Mail's plan to end pension scheme

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Aug 11 (Reuters) - A labour union representing the majority of Royal Mail’s 140,000-strong workforce said on Thursday that it would fight any move by the British company to end its defined benefit pension scheme.

Royal Mail said in June that it would increase workers’ base salary, but, according to recent media reports, told staff it might not be able to keep the pension scheme running beyond 2018.

Members of the Communication Workers Union (CWU) had in March overwhelmingly rejected Royal Mail's plans to end the scheme, the union said in a statement on Thursday. (

“The CWU do not accept that closure of the Royal Mail Pension Plan is inevitable and will explore every avenue to defend it,” said Terry Pullinger, the union’s deputy general secretary (postal).

Defined benefit, or final salary, pension schemes pledge a fixed income to pensioners and then try to match that liability by buying safe-and-steady assets such as government bonds.

Record low gilt yields following Britain’s vote to leave the European Union are deepening UK corporate pension deficit, which is already under pressure from low interest rates and the fact that more retired people are living for longer.

Problems at two high-profile companies - retailer BHS and Tata Steel’s British business - have illustrated the risk of allowing those deficits to yawn.

The combined deficit of UK schemes rose 13 percent to hit a record 935 billion pounds ($1.26 trillion) after the Brexit vote, consultants Hymans Robertson said in June. (Reporting by Rahul B in Bengaluru; Editing by Anil D’Silva and Savio D’Souza)