Royal Mail PLC confirmed in its half-year results that it expects to exhaust its pension plan surplus on an actuarial basis by 2018, and said it hopes to resolve issues around its future retirement arrangements by the end of the financial year, March 26, 2017.
The largest plan, the Royal Mail Pension Plan, London, was estimated to have £9.58 billion in assets ($12.5 billion) and £8 billion in liabilities as of Sept. 30, with the surplus decreasing from £1.77 billion six months earlier.
The U.K. postal service operator said in the financial report Thursday that it expects “the actuarial funding surplus to be exhausted during 2018”.
“After this time, the annual cost would be more than double the current contributions, which, (were) pointed out to plan members in a letter sent in June 2016, to be unaffordable for the company,” the same report read.
The other plan, the £410 million Royal Mail Senior Executives Pension Plan, which closed for future accrual in December 2012, recorded a surplus of £16 million and liabilities of &pouind;394 million as of March 31.
A spokeswoman was not available to comment by press time.