This is an important step in improving the security of Post Office workers’ pension benefits. We carefully considered the available options before running a process to select Rothesay Life and implement a bulk annuity transaction. It is through the collaboration of all parties that we were able to lock into this opportunity quickly and achieve an excellent outcome for the Post Office Limited Section.

Joanna Matthews Independent Chair of the Royal Mail Pension Plan


  • The benefits of members of the Post Office Section were secured by a bulk purchase annuity with Rothesay Life in July 2017
  • Since only Post Office employees at 1 April 2012 were included in this section, the duration of the liabilities was long for a pension scheme at around 30 years, resulting in significant exposure to interest rate, inflation and longevity risk
  • Although not the largest transaction in 2017 by premium size, it was the largest risk transfer in 2017 in terms of exposure to interest rates and CPI inflation


  • In 2012 the Post Office was separated from the Royal Mail and the UK government became responsible for the pension liabilities accrued up until 1 April 2012
  • After 2012, assets and liabilities started to build up for the Post Office employees in the Post Office Limited section of the Royal Mail Pension Plan
  • In March 2017 the Post Office Section of the Royal Mail Pension Plan was closed to future accrual
  • By 2017 only a small fraction of the 2012 employees had retired.  A large part of the benefits were therefore in respect of deferred pensions and matching these pensions required access to ultra-long dated assets
  • In addition a large part of the pensions that were secured increase each year in line with the Consumer Prices Index (CPI) and sourcing CPI-linked cash flows was also important
  • Prior to contract negotiations, the Trustee carried out a thorough independent legal review of the benefits in order to prepare for swift implementation of a bulk annuity with residual data risk cover
  • The  transaction was paid for with a £450m portfolio of long-dated gilts as payment for a bulk annuity contract with Rothesay Life


  • Having good access to long-dated and CPI-linked assets was key to Rothesay Life being able to offer an attractive price
  • Rothesay Life delivered price certainty by linking the insurance premium to a portfolio of gilts and insuring residual risks so the Trustee could lock into a favourable position and provide long-term benefit security to members

Cookies: This site uses cookies to improve the overall user experience.