Royal Mail has been accused of flouting pensions equality standards, as the embattled postal service prepares to face investors next week without a permanent chief executive.
Institutional Shareholder Services, the shareholder advice group, has raised concerns about top bosses getting higher pension contributions than new postal workers on the ground.
Under current policies, new executive directors will get pension contributions of 13.6pc of salary, while new employees will go into a defined benefit scheme which has contributions of 10pc.
ISS says: “This is not in line with the recommendations of the UK Code, which suggests that the pension contribution rates for executive directors, or payments in lieu, should be aligned with those available to the workforce.”
The concerns are raised ahead of Royal Mail’s AGM on Tuesday when it is expected to face questions from its retail investors about its performance under former chief executive Rico Back. He was ousted in May amid deep industrial unrest, and collapsing letter volumes.
Its shares have fallen 72pc since highs of 631p in May 2018, to 172.6p on Friday, while Czech billionaire Daniel Kretinsky has amassed a more than £100m stake in the company, sparking takeover speculation.
ISS’s concerns around pensions centre on the policy for new hires, rather than incumbent directors and existing employees, for whom contributions will be equal at 15.6pc from 2021.
Royal Mail stresses that under pensions arrangements which have been introduced to parliament, the Collective Defined Contribution plan, contributions for new employees will be raised to 13.6pc, equal to that of new executive directors. A spokesperson said: “We believe we have met the requirements of the code.”
ISS is recommending investors vote for the pay policies.