The Cash Balance benefit guarantees a minimum cash sum payable at age 65. You pay 6% of your pensionable pay towards your benefits. 

You will build up a cash lump sum at a rate set by Royal Mail. Currently, the rate is 19.6% of each year’s pensionable pay with further discretionary increases to the lump sum being targeted each year, although these increases are not guaranteed.

Royal Mail (not the Trustee) sets the policy regarding discretionary increases and may revise it from time. The policy is currently to target annual increases in excess of inflation as measured by the Consumer Prices Index. The contribution rates – for your own contributions and those paid by your employer – could change in future.

When you retire you can currently take up to 25% (a quarter) of the total value of your benefits as a tax-free cash sum. (For this calculation, the value of benefits that are paid in instalments, such as pension payments, is the initial annual pension multiplied by 20.)