Tag: Royal Mail

Royal Mail has struck a deal to clear its pounds 5.6bn pension deficit in what is the largest settlement so far over retirement black holes.

Under terms agreed with pension fund trustees, Royal Mail will pay up to pounds 750m annually for 17 years into the 450,000-member scheme.

The move comes as Royal Mail’s management is battling a host of problems, from pounds 2m-a-week losses at its rural Post Office network to increased competition in letter delivery from private companies.

To close its huge pension fund gap, the publicly owned group will have to dramatically lift annual contributions.

They will go up from pounds 480m last year to about pounds 750m this year and in future years.

Royal Mail is ramping up payments into its pension scheme in a bid to fill its GBP5.6bn pension deficit black hole, according to reports. An agreement with its pension trustees sees Royal Mail up its payments into its pension scheme to GBP750m from GBP480m, paid annually for the next 17 years, reported the Daily Telegraph. It is not clear how the Royal Mail will fund it, with operating profits at GBP355m last year. Cost-cutting measures have been suggested as a likely strategy to help fund the pension deficit.

Royal Mail is to launch a web-based booking system for its door-to-door division in early 2007 as part of its increasing emphasis on the door drop medium. The system, which is still in development, will replace the email and telephone based scheme that is currently in place, and will allow customers to deal with every aspect of their booking online. The system, which is being developed in consultation with clients, is already in the testing phase and will be trialled on a limited basis before rolling out just after Christmas.
“This is part of the ongoing investment that we’re putting into door-to-door,” said Ross Drake, general manager for Royal Mail door-to-door.