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Royal Mail Pension Plan sets 2050 net zero ambition

The Trustee Board of the Royal Mail Pension Plan (RMPP) commits to achieve net zero greenhouse gas emissions across its investment portfolio by 2050. This aligns with global efforts to limit warming to 1.5°C in the same timeframe.

This decision advances RMPP’s long standing approach of ensuring that climate risk is integrated into its investment strategy and risk management.

RMPP is also setting an interim target to reduce the carbon emissions associated with its equities and corporate bonds portfolios by 50% by 2030, relative to a 2015 baseline.  

Joanna Matthews, Chair of the RMPP, commented: “The climate crisis requires urgent and decisive action. As a responsible and long-term investor, we are determined to follow a credible and robust pathway to net zero emissions by 2050. The meaningful net zero target we are setting is aligned with our primary duty to protect the pensions of our members while also accelerating portfolio decarbonisation.”

More details on RMPP’s climate journey and progress will be available in the upcoming dedicated report on its climate strategy, in line with the Task Force on Climate-Related Financial Disclosures (TCFD), later in the year.

Cash Balance increase announced

Benefits building up in the RMPP after 1 April 2018 are normally increased each year in accordance with a policy set by Royal Mail Group (RMG). This is based on market conditions from time to time, but the aim is to provide an above inflation increase. We’re pleased to advise that the benefits built up in the Cash Balance fund as at 31 March 2021 for current employees (or those who left since 1 April 2018) were increased on 1 April 2022 by 4.6%. This met RMG’s aim of providing an increase above inflation (based on the CPI measure of 3.1%).

Russia/Ukraine Crisis

In light of the current crisis in Ukraine, the Trustee of the Royal Mail Pension Plan has carefully reviewed its exposure to Russian-domiciled investments.

The Plan has no current exposure to direct investments in Russia and as such is compliant with all economic sanctions currently in force. We are also actively working with our managers and advisers to ensure that the appropriate restrictions are put in place to prevent any future exposure.

Royal Mail consultation regarding changes to the RMPP

Royal Mail conducted a formal consultation about changes to the RMPP - with the unions and with employees - between 21 September and 21 November 2021.

We understand that Royal Mail:

  • have considered consultation feedback from the unions and from employees, which was mainly supportive of the proposed changes, 
  • wish to press ahead with the proposed changes, including the implementation of the Royal Mail Collective Pension Plan (“the Collective Plan”) as previously specified, as soon as possible (subject to the government making some changes to the law that are needed to make the Collective Plan possible), and 
  • aspire to send an application to The Pensions Regulator (“TPR”) in the summer when TPR will commence their processes for reviewing and authorising pension plans of this nature. 

There remains some uncertainty about how long it will take TPR to grant ‘authorisation’ of the Collective Plan.  So, Royal Mail are not yet able to confirm the date that the new Collective Plan will start, and contributions into the RMPP will cease. They hope it will be towards the end of this year or early next year.  In the meantime, we confirm that we’re satisfied that Royal Mail fulfilled its obligations regarding consulting on changes to the RMPP.

Benefit Illustrations

If you're a contributing member of Section A/B or Section C of the Plan your annual benefit illustration is currently being dispatched and will be with you shortly. For more information, select when you joined the Plan on the Home page and watch the video 'How to find the most important information in your benefit illustration', under 'Planning your future'.

If you're a contributing member of Section F of the Plan your benefit illustration is currently being dispatched.

If you are no longer contributing (so are a deferred member), your annual current value letter will be sent out in the last two weeks of October.

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