10 July 2020
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PSE: how it works

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The three steps to PSE

  1. Under PSE, you no longer make a personal contribution to your Royal Mail pension. This means contributions coming out of your weekly or monthly basic pay (see jargon buster) stop. Your basic weekly or monthly pay is reduced by the amount equal to the contribution you currently make to your Royal Mail pension. This includes any Additional Voluntary Contributions (AVCs – see jargon buster) you may be paying.
  2. We pay an increased employer contribution so that the amount paid into your pension is the same as before. The payments column of your payslip will start showing your basic pay and the PSE adjustment (see jargon buster).
  3. Because your basic pay has been reduced, you will start paying lower National Insurance contributions (NICs), if you pay NICs. Your take-home pay increases by the same amount as any NICs saving you make.

PSE has no effect on the overall level of contributions made to your pension, your pensionable pay, pensions benefits or other Royal Mail benefits you receive. 

Key dates

If you are paid monthly, you were enrolled in PSE on 1 August 2015.
If you are paid weekly, you were enrolled in PSE on 3 August 2015.


If you joined Royal Mail after July 2015, you will be enrolled into PSE when you become a contributing member of the Royal Mail Defined Contribution Plan, unless you choose to opt out.