The Postal Services Act 2011 (Transfer of Assets) Order 2012

[nataddick]

The above provides further details relating to the Government's action over Royal Mail's historic pension deficit and the ongoing responsibilities of Royal Mail.

It can be found at http://www.legislation.gov.uk/uksi/2012 ... tents/made" onclick="window.open(this.href);return false;

A summary (easier to read but still in legalise !) is provided under the tab 'Explanatory Memorandum' and reveals quite a lot of useful information.

I have picked out a few key points from under the relevant sections.

3.11 Section 16(1) provides that a qualifying accrued right is any right or entitlement
that has accrued up to a certain date (the qualifying time) in the RMPP, in respect of
qualifying members. (Both the qualifying time and the qualifying members are
prescribed at article 2). The definition of a qualifying accrued right is unique to the Act
(and does not exist elsewhere in pensions legislation). It is the vehicle for the transfer of
rights out of the RMPP and into the RMSPS, at sections 16 and 17, and was designed to
capture all defined benefit rights in the RMPP (up to the prescribed time, and in respect
of the prescribed members), so that two separate schemes, the RMPP and the RMSPS
would provide benefits before and after the qualifying time respectively.

7.9 The RMPP retains responsibility for any increases that members receive to
“final salary” pensions accrued before the transfer that arise as a consequence of any
real (i.e. above inflation) pensionable salary awards made on or after that date (hereafter
termed 'the salary link liability'). As the Royal Mail will be wholly responsible for
setting future wage increases, the Government considers it important that Royal Mail
retain responsibility for the salary link liability. The Government's position on this point
appears on the face of the Act at section 16(3) and was debated during its Parliamentary
passage. (See, for example, Public Bill Committee, Postal Services Bill, 11 November

7.17 The calculations under the Transfer of Assets Order value the liabilities and the
assets of the scheme as at 31 March 2012, and then provide for some of the assets to
transfer to the Fund. On 1 April, after the historic liabilities have been removed, the
RMPP will only retain liabilities for the salary link (described above in para 7.9) (as
well as any new accrual from 1 April 2012). Under the Transfer of Assets Order, the
RMPP will be left fully-funded in respect of the salary link liability as at the effective
date of calculation.

8.2 Member representatives have also been consulted on the content of the Pensions
and Assets Transfer Orders. On 31 January, a consultation meeting was held with the
Royal Mail unions - the CWU and Unite CMA - and the National Federation of
Occupational Pensioners (NFOP) who represent a significant proportion of the
pensioner membership of the RMPP. Opportunity was provided for these groups to
provide further comment after the meeting.

8.3 The Government's intervention in relation to the Royal Mail deficit as provided
for in the instruments is broadly welcomed by these groups and no issues were
identified in relation to the operation of the legislation during consultation. Concerns
were raised by the CWU in relation to the any changes that might be made to future
pension provision after the implementation of the legislation. As maintained during the
passage of the Act, the Government continues to consider that future pension
arrangements are a matter for the employers, the Trustee and the members.

So here is the source of the law that provides for the split of the old pension scheme into 2 separate schemes and the basis for it.

Interesting, that the long awaited Trustee Report 2013 and the formal Report & Accounts 2013 informs us that an actuarial valuation is underway but has not yet been concluded which tells us nothing at all at this precise moment.