Committee publication · Estimate memoranda · 29 April 2026

Main Estimates Memoranda 2026-27 - Royal Mail Statutory Pension Scheme

From: Public Administration and Constitutional Affairs Committee

Summary

This memorandum requests spending authority for the Royal Mail Statutory Pension Scheme (RMSPS) in 2026-27. The scheme is an unfunded, closed defined-benefit pension fund managing historic liabilities for approximately 342,458 members. The request covers £1,600.4m in resource spending and £1,964.0m net cash for pension benefit payments and interest charges, classified as annually managed expenditure due to factors outside administrator control.

Key findings

RMSPS is a closed scheme with no active members, paying only pensions earned prior to April 2012 as a run-off vehicle
Resource AME of £1,600.4m sought for 2026-27, representing a 6.7% increase driven by higher nominal discount rate (5.60% vs 5.15%)
Net cash requirement of £1,964.0m reflects expected benefit payments and pension increases to pensioners and dependants
Scheme liabilities valued at £28.2 billion as at 31 March 2025, with approximately 342,458 scheme members
Expenditure classified as Annually Managed Expenditure rather than pre-set departmental limits due to uncontrollable drivers (retirement rates, mortality, pension increases)

Tone

Procedural

Topics

public-financepensionspublic-sector-spending

Key actors

Royal Mail Statutory Pension Scheme, Cabinet Office, Government Actuary's Department, Catherine Little

Notable line

“The Scheme acts as a run o ff vehicle for historic liabilities, paying pension bene fi ts earned prior to April”

Key Quotes

“This is an unfunded, closed, de fi ned bene fi t scheme with no active members.”
— Memorandum text · describing the nature of RMSPS

“Expenditure covered by the vote is not subject to pre-set Departmental Expenditure Limit (DEL) control totals but is classi fi ed as resource Annually Managed Expenditure (AME) so that it can be …”
— Memorandum text · explaining spending classification rationale

“… the factors that drive the expenditure and cash payments covered by the vote are largely outside the control of the scheme administrators; for example retirement rates, pension increases, mortality etc.”
— Memorandum text · justifying AME classification

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Source · parliament.uk record ↗