MRM: Pension Update

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We know how important your pension benefits are to you. We have been reviewing the feedback from our member-wide consultation as part of our pension review process. Thank you to all who provided us with your feedback.

What is happening?

We have been working with our unions, the CWU and Unite/CMA, on the future of the Royal Mail Pension Plan (the Plan) after 31 March 2018.

Unfortunately, we have not been able to find an affordable way of keeping the Plan open in its current form after March 2018. With regret, the Company has come to the decision that Sections B and C of the Plan will close to future accrual on 31 March 2018.

Our Pension Review is not about reducing what the Company spends. It is about avoiding an unaffordable increase in the cost of funding the pension.

Working with our unions on a sustainable and affordable pension solution

We are working hard with the CWU and Unite/CMA to find a solution which addresses your feedback.

Any solution must demonstrate that it is both sustainable and affordable for the long term.

This will take time. Please rest assured that we are working on this as a priority.

Remember: Plan members’ benefits built up until April 2012 are backed by Government. Benefits built up between 2012 and 2018 are backed by the Plan’s assets. Plan members can get these benefits when they come to take their pensions.

Background: why the Plan is not affordable

The Plan is currently in surplus. But, we expect this surplus will run out in 2018. We need to take action before then.

The Company currently contributes around £400 million a year in ongoing pension contributions. The most recent financial review shows this could more than double in 2018 – to over £1 billion a year – if members then continue to build up benefits on the current basis.

This increase would not be affordable. It is significantly more than the cash the Company generates each year – around £290 million in 2015-16.

Next steps

We are working on this as a priority. We will write to members once further decisions have been made. Click here for more information and watch next week's RMtv.

For further information, call the Pension Review Helpline on 0345 850 0081. Lines are open Monday-Friday, 8.30am-5pm, not including bank holidays.

If you have any queries please contact your.news@royalmail.com