Postal workers' livelihoods are under attack again as Royal Mail has decided to slash pension benefits and up the retirement age from 60 to 65, while offering new starters a second-rate plan. This represents a massive hike in work - or retiring at the current age of 60 with over £1,000 lost benefits in many cases, and the prospect of a retirement spent in ill health and poverty. A Communications Workers Union workplace rep reports on preparations for a consultative ballot for over 150,000 members that could lead to a strike.

Royal Mail claims it has no choice but to cut pensions after a deficit of £6.5 billion has built up over the last decade, costing the company £840 million a year. Royal Mail says this is unsustainable and eating into profits.

The attack on pensions comes immediately after the Pay and Modernisation agreement negotiated by the CWU after last year's strike. This conceded to Royal Mail's demands for flexible working along with an agreement to negotiate on every other aspect of work conditions including pensions, on which Royal Mail agreed to "consult" employees, which it was legally required to do anyway. Now the company has completely ignored its workers' massive support for the current scheme, and plans to impose its original proposals without a single change. Such is its contempt for the workforce.

Pension plan rips off postal workers

The new scheme represents three major attacks.

First off, Royal Mail will hike the retirement age to 65 from 2010; those who still opt to retire at 60 could lose thousands of pounds. Postal workers already account for 10 per cent of the UK's skeletal-muscular injuries, and forcing them to do a hard, physical job for five more years will mean for many an old age of pain, illness - or being worked into an early grave.

Secondly, they will close the current final salary plan for a career average salary plan (a "career average revalued earnings" or CARE scheme) starting from 1 April 2008. The amount of pension earned before this date will be frozen, and from then on benefits will be calculated from the lower, career salary average rather than the higher, final salary. Royal Mail has thoughtfully offered to let workers voluntarily pay more in pension contributions to cushion the impact of the cuts - how CARE-ing!

Lastly, Royal Mail will close even this devalued scheme to new starters, who will receive an even worse pension changed from a "defined benefits" scheme to "defined contributions", with new employees only be eligible to join after 12 months employment. The shift to "defined contributions" does not sound like it means much of a change, and that's the idea. However in reality they are like day and night, and this is a major rip-off. A defined contributions scheme only defines how much a retired worker pays in, but it does not "define" the benefits he or she receives, which could fall if the stock market falls, as it is doing now, because the scheme relies in part on stock market investment to grow.

The union's starting position should not be protection of Royal Mail's profits, but understanding that pensions are deferred wages, that is, they are earned by the workers and belong to them. If the CWU accepts the new scheme for new starters, the link is broken. It is as if Royal Mail could say at the end of the week, the stock market has fallen and so your pay cheque has been cut by ten per cent!

Similarly, the CARE pension scheme will see benefits indexed to inflation but this will be capped at 5 per cent, so if inflation goes above this (and for many workers, no doubt, it is already this high or higher) workers lose out. Since the relative stability of capitalism over the last decade and a half is coming to an end, it means that all of the risk attached to the market is transferred from Royal Mail - and all those City stockbrokers that will queue up to buy shares when Royal Mail gets privatised - and onto the workers.

In last year's strike postal workers gave Royal Mail a battering, only to have the rug pulled out from under us by the CWU bureaucracy. Let's get back on our feet again and knock their pension plans out of the ring.

Royal Mail is trying to divide and rule, pitting workers already in the scheme against new starters, and those workers who are set to retire in the next ten years against the rest. CWU members should reject this game and present a united front against these plans to sell their future retirement down the river.

CWU leaders accept change and the market - again

When CWU tops Dave Ward and Billy Hayes brokered the Pay and Modernisation agreement last year to end the postal strike, signing up to Royal Mail's plans to restructure the business, they insisted that they had separated out major questions such as the pension for a separate consultation and "joint working groups" on team-working, hiking junk mail deliveries, and slashing sick pay.

However, a document was leaked, showing they had in fact signed up to Royal Mail's pensions proposals. Anger from below forced them to deny they ever did so, claiming they only agreed to more consultation.

Now Ward and Hayes are pushing postal workers to compromise and accept cuts to pensions, so that they can smoke the peace pipe with Royal Mail bosses, Allan Leighton and Adam Crozier, and continue to push through the modernisation agenda hand in hand. They are stacking up all the big numbers, hoping to show postal workers that they can't be "irresponsible", the company really "can't afford" to continue the current pension scheme. They want to accept a worse plan for new starters, propose retirement at 62 instead of 65, and increased contributions from members, while quibbling over the way pay rises or how high the inflation cap should be set.

Postal workers should reject these arguments from Royal Mail and the CWU bureaucrats about the need for a "sustainable" pension fund and profitable Royal Mail. Royal Mail is a publicly owned company, why does it need to make a profit? Royal Mail declared at the end of 2007 that for the next two years it would break even - so it is not in the red! The government's drive to make the service profitable by destroying full-time jobs, hiking up the workload and slashing pensions, is simply to lay the ground for its privatisation into the hands of millionaire City shareholders.

And while postal workers are told to tighten their belts and work harder for the good of the company, management is happy to give itself bonuses - £4.5 million in the last year, enough to prevent the closure of dozens of the 2,500 post offices Royal Mail intends to close this year. Adam "the Axe" Crozier took home an extra £1.3 million.

The pension problem is partly the government's making. For 17 years the company took a pensions holiday, with the government siphoning off billions in the profitable years in the 1980s and 1990s rather than paying into the fund. The CWU has shown that, without this holiday, there would be no deficit.

Royal Mail and CWU tops claim that the deficit is responsible for only a third of the hike in its pension bill, with an extra £580 million a year due to members living longer. But in the final analysis, postal workers are state employees; yet there is plenty of money for war (£3.3 billion a year) and to bail out the millionaire shareholders of Northern Rock (potentially £100 billion).

Under pressure from reps and members, the CWU leaders have been forced to act. They have launched a consultative ballot from 10 to 25 March, recommending rejection of Royal Mail's plans. The Unite union, which represents Royal Mail managers, is also against the cuts. This gesture by the CWU bureaucracy comes late in the day, with the ballot result announced only four days before Royal Mail imposes its plans. While the great majority of workers are against the pension cuts, Ward and Hayes no doubt cynically hope that workers will not want to go on strike so quickly after they led the last one to disaster.

Regroup and force the leaders to strike

Their bankrupt strategy is to rely on the government's Review of Postal Liberalisation to adjust the terms of market regulation in favour of Royal Mail, and so give the company more revenue, releasing more funds to allow a less drastic change to pensions. This isn't likely. John Hutton, the minister who condemned the postal strike last year, announced in December that three free marketers would head the review: two private sector suits and a Financial Services Authority boss. The CWU will just be one petitioner drowned out by other, much more influential forces that have the government's ear, such as the pro-market regulator Postcomm, multinational postal operators like TNT, and the Federation of Small Businesses.

Instead activists need to campaign for a massive rejection of the deal, holding workplace meetings to demand immediate strike action. The most confident and militant branches should call an emergency conference open to all those officials, reps, activists and members that want a militant defence of our pensions.

As well as hammering out a strategy to defeat the attack on our pensions, such a conference could also debate the best way to reverse the flexibility assault, and force Royal Mail to abandon its plans in the coming negotiations over team-working, workload hikes in the form of increased or unpaid junk mail delivery, and changes to attendance and voluntary redundancy procedures.

A fight for the future

Postal workers cannot allow their whole future to be traded away piece by piece by CWU bureaucrats in the name of "being realistic" and "accepting change", as Dave Ward constantly lectures postal workers in the CWU monthly Voice. Accepting the market means accepting the destruction of a full-time workforce, the busting of our union, and ultimately the privatisation of Royal Mail. The alternative is to rely on postal workers' collective strength and ability to shut down the postal network and hit British capitalism hard, with millions lost each day, as last year's magnificent strike showed.

And postal workers are not alone. This is not an isolated battle. It could have consequences for the whole public sector. As BBC Business Editor Robert Peston commented in an article on the attack on pensions, "For ministers, the Royal Mail is a kind of giant testing ground for their intermittently bold plans to reconstruct the public sector... Ministers were particularly impressed three or four years ago when Royal Mail reduced its workforce by some tens of thousands - which fired up the determination of the Treasury to reduce headcounts and costs elsewhere in the public sector." He says a victory by Royal Mail in pensions will give the government the green light to rip up public sector pensions.

But if that is true, then so is the other side of the coin. By uniting our fight against pension cuts with other public sector workers opposing Gordon Brown's public sector pay squeeze and outsourcing - civil servants, teachers, lecturers, local government and health workers - we could together defeat the government.

There is no doubt that the great majority of postal workers would be willing to fight if they believed they had a leadership capable of delivering victory. Many know that the CWU does not currently have such a leadership. Militants of Liverpool, London, Scotland and every office across the country need to unite and build an alternative leadership, in order to regroup the union's forces and channel that mass anger into a strike that knocks back Royal Mail's pension plans and starts to claw back some of the ground lost in last year's needless defeat.