RM boosts pension contribution & plans 4 holiday pay ruling

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Royal Mail boosts pension contribution by 50% and installs plans for holiday pay ruling

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Royal Mail increased its defined contribution (DC) pension payments to £38m in the last year – an average of 5.4% per employee.

The figure is up just over 50% from £25m in 2013-14.

The postal delivery service also noted that it had set a mitigating plan in place to deal with fallout from the employment appeal tribunal's ruling to include overtime in holiday pay.
It announced the changes as part of the 2014-15 annual results and said it hoped to take a collaborative approach with trade unions.


"Whilst this decision appears to have crystallised the risk of having to include overtime in the calculation of holiday pay, the position is still unclear as to how to calculate the appropriate payments and exactly who should receive such payments. The case law is still evolving in this area," it said.

"We are closely monitoring developments in the case law in this area and are in discussions with our recognised unions as to how to deal with this issue. We hope to take a collaborative approach once the case law becomes clearer.

"Based on our estimates of the potential financial impact, we believe that we have made sufficient provision for any historic liabilities that may arise."

Royal Mail also revealed it had created a task force to address attendance issues, with a particular focus on long term employee absence.

Employees will also gain four extra shares each as part of the organisation's floatation share incentive plan (SIP) following forfeiture of shares by leaving staff.

The 729 total shares awarded to eligible full-time employees comprises the 725 initial, expected allocation of shares and an additional four shares resulting from the reallocation of shares forfeited by certain employees who left the group during the 2013-14 reporting period.