TPR has grave concerns over Royal Mail trustee agreement

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Royal Mail has agreed to pay substantially higher pension contributions to plug the scheme’s multi-billion pound deficit.

However, in a letter to members the trustee made it clear The Pensions Regulator had not signed off on the deal and has "substantial concerns".

Royal Mail Pension Trustees chairman Jane Newell (pictured) said the scheme's deficit stood at £10.3bn in March 2009, revealed after a financial health check was carried out. However, she explained the latest funding update revealed the funding deficit had reduced to £8.4bn.

The letter said: "The Pensions Regulator has not yet had the opportunity to carry out a detailed assessment of the formal financial health check. However, the provisional view from the regulator is that it has substantial concerns about both the deficit figure and other aspects of the agreement which the trustee reached with Royal Mail.

"The agreement is now subject to a formal review by the regulator. The trustee is working with regulator to help it conduct its formal review."

It added: "Royal Mail will continue to pay substantial contributions in excess of the current level to repair this deficit."

Newell said more details about the March 2009 formal health check and the March 2010 funding update would be issued in a report to members shortly.
She added: "I would like to stress that the trustee remains absolutely focused on protecting the interests of members as its prime objective."

The scheme had expected to post the massive deficit in December, last year.