Royal Mail's accounting pension surplus drops by 42%

[TrueBlueTerrier]

https://www.professionalpensions.com/pr ... rops-by-42" onclick="window.open(this.href);return false;

The combined IAS 19 accounting surplus of Royal Mail's defined benefit (DB) schemes fell to £2.2bn in March from £3.8bn a year ago, according to its annual report.

Today's announcement comes after the Royal Mail Pension Plan (RMPP) was closed to future accrual from 31 March, as part of plans to deliver cost efficiencies.

The postal service also sponsors the Royal Mail Senior Executives Pension Plan.


The same announcement revealed that on an actuarial/cash funding measure, the schemes' funding surplus fell from £1.1bn last March, to £143m this year. They had £10.4bn of assets, up from £9.8bn, while liabilities rose from £9bn to £10.3bn.

It comes as the RMPP's 31 March 2018 actuarial valuation is being agreed between the trustee and the company. Based on the rolled forward assumptions used for the 2015 valuation, the scheme is estimated to have £100m actuarial surplus as of 31 March 2018, down from £1.1m three years ago.

Royal Mail and the CWU are continuing to work towards the introduction of a collective defined contribution (CDC) scheme, subject to necessary legislative changes being enacted.

Transitional pension arrangements were put in place from 1 April 2018 until a CDC scheme can be established. These comprise a defined benefit cash balance scheme, and an improved defined contribution scheme.

The ongoing annual cash cost for all Royal Mail's pensions will continue to be around £400m.

Postal workers voted strongly in favour of a deal that includes plans to set up the UK's first collective defined contribution (CDC) pension scheme, during a Communication Workers Union (CWU) ballot on 28 March.

Commenting on the reduced pension surplus, Lincoln Pensions chief executive officer Darren Redmayne said:

"The reduced surplus was to be expected given the way that the business was privatised. As time passes, pension members will be more reliant on the future success of Royal Mail as a publicly-listed sponsor to provide sufficient covenant strength to stand behind the long-term risks in this relatively young scheme."

Lincoln Pensions chief executive Darren Redmayne said:

"The reduced surplus was to be expected given the way that the business was privatised.

"As time passes, pension members will be more reliant on the future success of Royal Mail as a publicly-listed sponsor to provide sufficient covenant strength to stand behind the long-term risks in this relatively young scheme."

[stephen500]

what does this mean in plain English?

[Navalron]

Basically it means the money men in the city f....d us yet again for more of our hard earned money. Simple...