Budget 2012: Royal Mail Group’s pension scheme liabilities to be transferred to government

The government intends to transfer the historic liabilities of around £37.5 billion from the private sector Royal Mail Pension Plan (RMPP) to a newly established unfunded public pension scheme, confirmed Chancellor George Osborne in the 2012 Budget report.

The liabilities will leave public sector net debt unaffected, but will score alongside other unfunded pension liabilities in the whole of government accounts.

Alongside the liabilities, an estimated £28 billion of assets will transfer to the government.

The European Commission has approved the plan to relieve the group from excessive pension costs.

Joaquin Almunia, vice president in charge of competition policy at the European Commission, said: “In order to achieve a level playing field in postal markets, it is crucial that incumbent operators neither enjoy undue advantages, nor suffer from structural disadvantages in comparison with competitors.

“The relief of excessive pension costs and the restructuring aid approved today will help ensure this balance for Royal Mail and its competitors.”

Read more articles on the 2012 Budget report