The pension scheme for postal workers is facing a £700,000 a year shortfall.

Closing the final salary scheme to new members is one of the options being considered by Isle of Man Post Office management.

As our sister newspaper, the Manx Independent, reported last week, the Communications Workers’ Union says it will defend the ’salary in retirement’ scheme.

And CWU deputy general secretary (postal) Terry Pullinger, who visited the island last week at the start of negotiations, is urging postal bosses not to ’pull up the ladder to the next generation’ of staff.

Isle of Man Post Office currently offers a defined benefit contribution pension scheme.

It said the scheme is funded in respect of the value of liabilities accrued to date.

The Post Office said this is a much better position than many companies find themselves in and reflects the positive action taken in collaboration with the CWU the last time a scheme funding issue arose.

But it said the latest valuation identified that a further £700,000 per year is required to fund the future cost of the scheme for existing members.

This will take total pension costs to £1.5m per annum or 21% of total salaries.

’This is a significant increase and the impact of this on Isle of Man Post Office and the pension scheme must be addressed,’ it said in a statement.

It said its key objectives are to protect core services to the public, while maintaining its long term financial viability and the position of existing members of the pension scheme.

’Closing the pension scheme to new members is one of the options being considered to reduce risk to both the Post Office and existing members of the scheme,’ it confirmed.

’We are at the very start of negotiations on future options with the CWU and do not propose to make any further public comment.’