Royal Mail pension accounting surplus grows 400m ahead of closure

Post by **TrueBlueTerrier** » 18 May 2017, 13:30

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The combined accounting surplus of Royal Mail's two defined benefit (DB) pension plans grew by 12% in the year to 26 March 2017, the company's annual report has revealed.
The two schemes - the Royal Mail Pension Plan (RMPP) and the Royal Mail Senior Executives Pension Plan (RMSEPP) - had a surplus of £3.8bn on the IAS 19 measure, compared with £3.4bn as at 27 March 2016.

The scheme had £9.8bn of assets and £6bn of liabilities on the accounting measure this March, compared to £7.4bn and £3.8bn in the previous year.

However, on an actuarial/cash funding measure, the schemes saw a drop of around £700m in excess cash. As at 31 March 2017, the schemes had a combined surplus of £1.1bn, compared to £1.8bn last March.

On this measure, the scheme had £10bn of assets, and £9bn of liabilities, up from £7.4bn and £5.7bn respectively in 2016.

The figures come ahead of the planned closure of the RMPP next year, as the company expects the costs of running the scheme will more than double and drain the surplus. It predicts contribution rates will increase from 17% of pensionable pay to over 50% by April next year, resulting in an annual cost of more than £1bn.

The postal service is currently in discussions with its trade unions about the prospects of two different ways to provide benefits more generous than under a defined contribution (DC) scheme.

The Communication Workers Union (CWU) has put forward a "compromise" risk-sharing scheme where DB and DC members would be merged into a single pension scheme. This scheme would guarantee a minimum wage in retirement with inflation-linked increases dependent on investment performance.

However, Royal Mail has said this would be too risky for the company, and has instead proposed a cash balance scheme which would see members guaranteed a lump sum on retirement, which could be uplifted on a discretionary basis depending on investment performance.

Discussions between the company and its unions on the future of pension provisions are ongoing.

oypostie · Post by **oypostie** » 19 May 2017, 14:26

So what is happening to the Royal Mail Senior Executives Pension Plan (RMSEPP) he asks foolishly. Haven't seen this mentioned at all

k979aaa · Post by **k979aaa** » 19 May 2017, 15:32

oypostie wrote:So what is happening to the Royal Mail Senior Executives Pension Plan (RMSEPP) he asks foolishly. Haven't seen this mentioned at all

Probably £800 million going into it after our defined benefit scheme closes!

SW17 · Post by **SW17** » 19 May 2017, 18:55

So profits up by 25% with next year set to be even higher as Royal mail have said they have already maxed out with there modernisation costs, pension surplus has increased which was meant to be drying up - wtf is going on?
So the workforces reward for such great results is worsening terms and conditions and a vicious attack on our pensions?
I hope the union refuse to accept any cuts to our terms and conditions or pensions while the company is doing so well and while the pension pot is in surplus and still growing.

heapsy · Post by **heapsy** » 19 May 2017, 21:11

SW17 wrote:So profits up by 25% with next year set to be even higher as Royal mail have said they have already maxed out with there modernisation costs, pension surplus has increased which was meant to be drying up - wtf is going on?
So the workforces reward for such great results is worsening terms and conditions and a vicious attack on our pensions?
I hope the union refuse to accept any cuts to our terms and conditions or pensions while the company is doing so well and while the pension pot is in surplus and still growing.

If you remember the last dispute, we were undermined by the managers who then stabbed us in the back and got a better deal than us.

Now they are squealing like pigs. Shame that.

We wont win a dispute because of their underhand tactics.

k979aaa · Post by **k979aaa** » 25 May 2017, 19:15

heapsy wrote:
SW17 wrote:So profits up by 25% with next year set to be even higher as Royal mail have said they have already maxed out with there modernisation costs, pension surplus has increased which was meant to be drying up - wtf is going on?
So the workforces reward for such great results is worsening terms and conditions and a vicious attack on our pensions?
I hope the union refuse to accept any cuts to our terms and conditions or pensions while the company is doing so well and while the pension pot is in surplus and still growing.
If you remember the last dispute, we were undermined by the managers who then stabbed us in the back and got a better deal than us. Now they are squealing like pigs. Shame that. We wont win a dispute because of their underhand tactics.

I agree they got a 7.3% pay rise which was pensionable where we got 6.9% both over three years yet with lapsing and culling duties they get far more than 7.3% more like 10% and the higher up the more they get talk about gravy train!