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The trustee of the Royal Mail Pension Plan (RMPP) has agreed to a request from Royal Mail Group (RMG) to release some money that has been held separate from the RMPP.
The funds released from escrow aim to enable RMG to pay a one-off lump sum payment to all employees as part of its agreement with CWU.
According to the trustee, the release 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.
The escrow was established in 2017 as a potential source of additional funds for the plan if required, although the scheme trustee pointed out that the funding position of the RMPP has improved considerably since as a result of its 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,” a statement from the scheme said.
The remainder of the escrow, around £70m, is to be made available to the planned Royal Mail Collective Pension Plan when it is launched, which is expected to be early next year.
The Royal Mail Collective Pension Plan became the first UK collective defined contribution to successfully pass The Pensions Regulator’s assessment process earlier this year, in what was highlighted as a “landmark” moment for the pensions industry.
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