15 December 2019
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New pension agreement FAQs

What is the new pension agreement?

Royal Mail and the CWU have agreed to work together to introduce a Collective Defined Contribution (CDC) scheme – subject to the necessary legislative and regulatory changes – with a Defined Benefit Lump Sum scheme (DBLS) sitting alongside it.

This would provide one scheme for all Royal Mail employees. It would be the first of its type in the UK.

The new CDC and DBLS arrangements would target, but not guarantee, a similar level of retirement benefits as provided by RMPP (which closed to future accrual in its current form on 31 March 2018). Risk would also be shared between the members and the Company.

These are significant moves from the Company’s original Defined Contribution proposal, where Company contributions were less and risk rested only with members.

While we seek a CDC scheme, we have implemented transitional arrangements: a new Defined Benefit Cash Balance Scheme (DBCBS), which is set up as part of RMPP, and an improved Royal Mail Defined Contribution Plan. 

Does this pension agreement apply to Unite members?

Yes it applies to all employees. We concluded discussions with Unite on pay and pensions in May 2018 and Unite members voted to accept the pension deal.  

Are the arrangements agreed the best option, or should members look at other schemes offered by other financial institutions?

We have worked hard with our unions to continue to provide sustainable, good quality retirement benefits for our employees.

Of course members are able to consider other schemes offered in the wider market. The Company cannot provide financial advice. You are advised to speak to the Pensions Review Helpline and seek independent financial advice before opting out of the Company’s pension arrangements, as the Company will not contribute to other pension arrangements.

For RMPP members who join a different scheme, you will be considered to have left the RMPP and your benefits will be calculated accordingly. Please see page 13 of your home mailing sent to you in February 2018 for more information.