Recent news
EP Corporate Group submits possible cash offer to International Distribution Services (IDS) Plc
The Trustee has noted the public statement made by EP Corporate Group in relation to its non-binding indicative proposal to the Board of IDS for a possible cash offer. We continue to actively monitor the situation to ensure that members’ interests are protected.
Pensioner Payslips – A new look
From time to time we send you a payslip showing the amount of your pension and any deductions (such as tax). We usually only do this if the amount of your pension payment changes by more than £1.00.
We have updated the system we use to make pension payments, and this means that in future any payslip we send you will look different from before. We sent a payslip to everyone who receives a pension in December, in the old format, to make them aware of the change.
Click here to see an example of what the payslip will look like. Everyone will get a payslip in the new format in April 2024. After that, for most people we will only send a payslip after each annual pension increase is paid – usually in May.
Nothing else is changing – we’ll continue to pay you on the last working day of each month (if you are paid monthly) or the last working day of March, June and December (if you are paid quarterly).
The Trustee agrees to early release of the RMPP escrow
The Trustee has agreed to a request from Royal Mail Group (RMG) to release some money that has been held separate from the RMPP. The release to RMG of the escrow funds (valued at £196m on 26 March 2023) was agreed after fully assessing the risks of the RMPP and an independent review of the information made available by RMG. It will enable RMG to fund a one-off lump sum payment to all employees as part of its agreement with CWU. The remainder of the escrow, £70m, will be made available to the planned Royal Mail Collective Pension Plan when it is launched, expected early next year.
The escrow was established in 2017 as a potential source of additional funds for the Plan should they be required. Since then, the funding position of the RMPP has improved considerably as a result of the Trustee’s prudent investment strategy.
The Trustee’s duty to safeguard the security of members’ benefits is their primary focus. RMPP is now well-funded and the Trustee is confident that members’ interests are well protected, even after the release of the escrow funds.
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 2022 for current employees (or those who left since 1 April 2018) were increased on 1 April 2023 by 11.3%. This met RMG’s aim of providing an increase above inflation (based on the CPI measure of 10.1%).
RMPP selects BlackRock to manage its assets
Members of the current RMPP investment team will move to BlackRock to continue to deliver the investment strategy, ensuring stability and continuity.
The RMPP has a wide range of investments, or assets, which are managed to support the retirement benefits of our members.
In the past, the Trustee has managed these investments in-house, through a small team headed by our Chief Investment Officer. Now, the Trustee has selected BlackRock to manage its assets as an outsourced chief investment officer (OCIO). This means that some members of RMPP’s investment team will move to BlackRock and continue to manage the scheme’s investments. In doing so the RMPP will benefit from a range of expertise available from a full-service asset manager.
Richard Law-Deeks, Chief Executive of the RMPP said: “The Trustee’s main priority is to ensure the retirement benefits of our members are well managed and protected. Our in-house team has delivered strong investment performance during some challenging times and the RMPP is well-funded. It’s time to consider how to lock and maintain this position. This agreement ensures we retain the expertise of key members of the team, while at the same time benefitting from BlackRock’s wider resources.”
RMPP remains well funded and benefits are secure
The recent turmoil in UK financial markets impacted defined benefit pension schemes with investment strategies designed to protect against interest and inflation rate movements. The RMPP has taken actions to protect the plan and ensure that your benefits remain secure, and the strong funding level has been maintained. We haven’t needed to request additional funds from Royal Mail Group, beyond the normal monthly employer contributions, as required under the Plan Rules.
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.
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. 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 2020 for current employees (and those who left since 1 April 2018 – not just those who left since April 2019 as indicated in the printed version of Pensions News) were increased on 1 April 2021 by 1.7%.
Coronavirus Update No.2
We gave an update at the start of April on how we are ensuring that the RMPP continues to operate during the current virus outbreak. At the moment, our staff in the Pensions Service Centre are continuing to work from home; and we still do not anticipate any disruption to services and payment of pensions will continue as normal. The Pensions Helpline is continuing to take calls and from Monday 1 June will increase its opening hours to 9.00am -5.00pm from the slightly reduced hours that have been operating so far during the current situation. Please be patient and we will answer all calls as soon as possible. If you have a non-urgent question then you can email the team at pensions.helpline@royalmail.com as our phone lines may be busy.
Coronavirus Update
We have added a short update about how we are managing the current situation to ensure pensions carry on being paid and those approaching retirement get their benefits on time. Also, details of our Helpline hours and how to contact us by email. Read the update here.
The new Scottish Widows [Formerly Zurich] AVC Platform
We have added a link to the Scottish Widows website; here, in the text in the Library (and also in the Topping up your pension benefits page, in the Planning your future section). AVC funds built up on the old platform have now been transferred to the new platform.
Richard Law-Deeks appointed CEO at RMPP
Richard Law-Deeks has been appointed as Chief Executive Officer of the Royal Mail Pension Plan (RMPP); he takes up the role with immediate effect.
With more than a decade of experience working in the pensions market, in both the public and private sector, Richard has led the RMPP as interim CEO since February 2018. Prior to this, Richard was Head of Finance.
Before joining the RMPP in 2015, Richard worked at Marsh & McLennan Companies, specialising in corporate finance and investments. He also worked in public sector accounting roles within several different Local Government Pension Schemes.
Richard will build upon the work of the RMPP’s previous leadership, which will include the further development of best-in-practice governance and risk management systems.
Commenting on Richard’s appointment, Joanna Matthews Chair, Royal Mail Pensions Trustees Limited, said “Richard understands the demands and challenges that the Plan faces and, during the first half of this year, showed great leadership as we began to implement new changes. He has a clear vision for the Plan that is aligned with the thoughts of both trustees and the sponsor. I look forward to working with him in 2018 and beyond.”
On his permanent appointment as CEO, Richard remarked “It is a real privilege to lead the Plan, helping to ensure the financial well-being of our members in retirement. I look forward to delivering best-in-class services and innovation, working closely with Joanna, the trustees, and the sponsor. I am also delighted to be leading such a great team of colleagues, who are some of the most talented in the business.”
Change in administration of pre 2012 benefits, from 1 October 2018
An important decision has been taken by the Cabinet Office that affects the administration of some of your pension benefits. The administration of your benefits in the Royal Mail Statutory Pension Scheme will move from the Pensions Service Centre (PSC) to Capita with effect from 1 October 2018. A letter from the Chair of the RMPP, together with a Q&A, has been added to the Library. These documents will be mailed to all members in the next couple of weeks.
GDPR update for Post Office section members
This letter was sent to members of the RMPP in the Post Office section.
Important changes to the law regarding data privacy come into effect from 25 May 2018. The General Data Protection Regulation (GDPR) is the biggest shake up privacy laws for 20 years and is designed to protect all European Union citizens from privacy and data breaches. We recently wrote to Post Office section employee members explaining what information the Trustee and the administrator hold about you, and how these changes will affect you. You can view the letter here.
New benefits from 1 April 2018 and GDPR update for RMG section members
This letter was sent to members of the RMPP in the RMG section.
Royal Mail wrote to employee members of the RMPP at the end of February 2018 advising of changes to benefits, which came into effect on 1 April 2018. The new scheme within the RMPP is called the ‘Defined Benefit Cash Balance Scheme (DBCBS)’.
Employee members can choose to remain in the RMPP or join the Royal Mail Defined Contribution Plan. The Trustee has been working with its independent advisers to understand the provisions of the DBCBS and has agreed the Rule amendments with Royal Mail. The attached letter from the Chair of the Trustee explains the changes to benefits, as well as important changes to data privacy and how they affect you.
