Postal unions are threatening to ballot for industrial action after Royal Mail said it would close its defined benefit pension scheme in 2018.
The postal service said that the pension plan was currently in surplus, but it was not sustainable.
Royal Mail contributes about £400m a year, but it said this would have to increase to more than £1bn by 2018.
The Communication Workers' Union condemned the move, and threatened to ballot its members for strike action.
However, Royal Mail, which was privatised in 2012, said there was little alternative to closing the scheme.
"We have concluded that there is no affordable solution to keeping the plan open in its current form," the company said.
"Therefore, the company has come to the decision that the plan will close to future accrual on 31 March 2018, subject to trustee approval."
The defined benefit scheme was closed to new members in 2008, but 90,000 postal staff have continued to contribute.
My view, is very simple, when you take into account that we are living longer meaning pensions need to be paid for longer, interest rates and Gilt rates are the lowest they have been more money needs to be in the pension to fund it. The difficulty members of Defined benefits schemes is seeing how much the employer has to contribute into the scheme. The employer takes the liability and guarantees the scheme. No business can sustain such a liability hence why so many schemes have already closed to both new and existing members. As you can see the Post Office estimate that by 2018 £1 billion needs to be contributed into such a scheme. Thats a huge amount of money to find.