Newly privatised Royal Mail’s DB pension surplus has increased by £898m in the year ended 30 March 2014.

In its latest preliminary results, Royal Mail said the surplus increased from £825m at 31 March 2013 to £1,723m at 30 March 2014.

“The increased surplus reflects the impact of the pensions reform of £1,350m, partially offset by the impact on liabilities of lower discount rates,” Royal Mail said.

The fair value of schemes’ assets were recorded at £3,833m, with liabilities valued at £2,097m. An IFRIC 14 adjustment of £13m was added to this.

On 26 September 2013, the company agreed with the Royal Mail Pension Plan trustee to implement pensions reform with effect from 1 April 2014.

Under this agreement, members’ pensionable pay will increase by RPI (up to a maximum of 5 per cent) regardless of whether actual basic pay increases by more or less than this amount.

The group also operates a defined contribution plan, which was launched in April 2009 and is open to employees who joined the company from 31 March 2008 following closure of the Royal Mail Pension Plan (RMPP) to new members.

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