Royal Mail PLC Royal Mail 2018 Pension Review Update (3896C)
April 13 2017 - 2:00AM
UK Regulatory
TIDMRMG
RNS Number : 3896C
Royal Mail PLC
13 April 2017
13 April 2017
Royal Mail plc
UPDATE ON ROYAL MAIL'S 2018 PENSION REVIEW
Royal Mail plc (RMG.L) is today providing 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 we expect the surplus will
run out in 2018. The Company's annual pension contributions are
currently around GBP400 million. If no changes are made, the
contributions could more than double to over GBP1 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.
ENDS
Investor Relations:
Catherine Nash
Phone: +44(0)20 7449 8183
Email: investorrelations@royalmail.com
Media enquiries:
Andrew Moys
Phone: +44 (0)7841 803 321
Email: Andrew.moys@royalmail.com
Peter Tilley
Phone: +44 (0)7841 803 316
Email: peter.tilley@royalmail.com
Royal Mail press office out of hours: 020 3338 1007
Notes:
1. At around GBP400 million per year, Royal Mail currently makes
one of the UK's largest cash contributions in ongoing pension
contributions. Many companies have already closed their Defined
Benefit pension schemes. Only a few FTSE 100 companies, like Royal
Mail, have a significant number of their employees still building
up benefits in a Defined Benefit pension scheme.
2. 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. Members can get these benefits when they come
to take their pensions.
Royal Mail Statutory Royal Mail Pension
Pension Scheme Plan
(backed by Government) (backed by the Plan's
assets, and by Royal
Mail)
------------------------- -------------------------
Defined Benefit benefits Defined Benefit benefits
earned up until 31 earned between 1 April
March 2012. 2012 and 31 March 2018.
Increased in line with Increased in line with
RPI (up to 5% a year) RPI (up to 5% a year)
until a member takes until a member takes
them or leaves Royal them or leaves Royal
Mail employment. Mail employment.
------------------------- -------------------------
3. The Company is committed to working hard to find a solution
which enables it to continue providing sustainable, good quality
pension benefits, a healthy Company, and as many high quality jobs
as possible.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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