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| November 18, 2021
On the go: The Royal Mail’s new collective defined contribution plan will have a fixed employer contribution of 13.6 per cent, as well as a standard employee contribution of 6 per cent, the group confirmed on Thursday.
As outlined in the postal company’s half-yearly report, the Royal Mail Collective Pension Plan, which contains both a CDC and defined benefit lump sum products, will also offer employees an option to contribute an extra 1 per cent in return for an additional lump sum payment.
In September, Royal Mail launched a consultation on its proposed CDC scheme after the provision was legislated for under the Pension Schemes Act 2021.
The group said is has “been working closely with the Communication Workers Union and other stakeholders to make CDC a reality for Royal Mail and its people” for a considerable period of time.
Royal Mail said it anticipates accounting treatments for both sections of the scheme to be similar to its transitional DB cash balance scheme, based on current expectations.
Total employer contributions for all Royal Mail schemes will be around £390m for the 2021-22 year, with the group expecting to contribute £120m into its DC plans, as well as £270m for the DBCBS and the now-closed Royal Mail Pension Plan during the upcoming financial year.
The RMCPP is awaiting authorisation by the Pensions Regulator and for the Department for Work and Pensions to finalise accompanying regulations.
Royal Mail said it will launch the scheme next year, pending the outcome of the consultation, which closes on November 21.
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