Royal Mail confirms €3.6bn pension deficit
UK – UK postal firm Royal Mail has disclosed a pension funding deficit of £2.5bn (€3.6bn) – hit by an increase in liabilities stemming from lower discount rates, weaker markets and demographic changes.
“With a current funding deficit of £2.5bn, Royal Mail has already contributed £271m in two years over and above the regular contributions to ensure the fund can meet its obligations to our people,” the group said in its new annual report.
“Clearly, the best way to safeguard Royal Mail’s continuing contributions is for the company to continue to make a profit.”
It said: “Key factors generating the move from surplus to deficit were investment market experience over the three years ending 31 March 2003 of some £725m, demographic changes, including increased life expectancy of members, of some £420m, and the higher assessed liabilities of some £1,350m based upon a lower discount rate.”
The market value of the assets rose to £17.22bn as at March 27 this year, from £15.09bn a year before. But liabilities were up to £21.12bn from £19.44bn.
The company, which lost its monopoly earlier this year, said it employed Watson Wyatt Worldwide on pension and actuarial matters.