Royal Mail plc (LON:RMG) has today providied an update on its 2018 Pension Review in respect of the future of the Royal Mail Pension Plan (the Plan).
The member-wide consultation phase ended on 10 March 2017. Royal Mail has reviewed the consultation feedback received from members and its unions, the Communication Workers Union (CWU) and Unite/CMA. This includes a proposal put forward by the CWU. Sustainability, affordability and security are the principles the Company employed when reviewing the consultation feedback.
The Plan is currently in surplus but Royal Mail expect the surplus will run out in 2018. The Company’s annual pension contributions are currently around £400 million. If no changes are made, the contributions could more than double to over £1 billion in 2018. We have concluded that there is no affordable solution to keeping the Plan open in its current form. Therefore, the Company has come to the decision that the Plan will close to future accrual on 31 March 2018, subject to Trustee approval.
We know how important pension benefits are to our colleagues. We continue to work closely with our unions on a sustainable and affordable solution for the provision of future pension benefits. We will write to Plan members once further decisions have been made.
