Royal Mail Defined Contribution Plan (RMDCP)

Hello, I’m Elizabeth Hartree, Chair of the Royal Mail Defined Contribution Plan. I want to share an important update about changes we’re making now that the Plan is no longer taking contributions and has become a legacy arrangement.

After reviewing the Plan to ensure better value, stronger governance and a wider range of investment options, we’re moving your pension savings to a new home – the very well-regarded Mastertrust with Legal & General. Importantly, this won’t cost you anything — Legal & General will cover all transition costs.

This change is planned for summer 2026. Your current pension pot will move automatically — you don’t need to do anything.

But if you want to choose how your money is invested after the move, you can do that beforehand using the online form on the Investment Selection page of this website.

We believe this move will benefit you through:

• Competitive charges we’ve negotiated on your behalf
• A broader choice of investment options
• New online tools that make it easier to manage your pension savings

On this website, you’ll find everything you need — how the new scheme works, investment options, charges and the next steps.

We’ll also be holding presentations in April where you can ask questions and hear more. We hope you’ll join us.

Thank you for taking the time to listen.

Both the current scheme and the new plan are Defined Contribution (DC) arrangements. The current scheme operates under a single trust (set up by Royal Mail) and is managed by an independent Trustee to provide benefits on retirement (or earlier death) for employees (or former employees) of Royal Mail.

Your pension pot builds up based on (historic) contributions from both you and your employer, plus investment returns, less charges. These are also referred to as 'money purchase' pensions. At retirement, you can choose how to access your pension pot.

The new plan will use a Master trust. This is a centralised pension arrangement used by multiple employers to provide pensions for their employees. It offers economies of scale and is governed by a professional independent board of trustees, who ensure the scheme is managed in the best interests of its members.

As you may remember, the Royal Mail Collective Pension Plan launched on 7 October 2024. The RMDCP closed to new entrants at the same time.  The RMDCP also closed to future contributions from that date (other than for recent joiners who continued to contribute to the RMDCP until their completion of 12 month's service with Royal Mail).  Since October 2025, the RMDCP has had no contribution income - it has become a ‘legacy scheme’.

The new plan will be provided by Legal & General (L&G). More information about L&G is available at their L&G Mastertrust website.

The project had seven key stages:

1. Trustee requirements were documented, and a weighting was given to each one.
2. A ‘Request for Proposal (“RfP”)’ was sent to five Master trust providers (including Scottish Widows). The RfP outlined the Trustee’s requirements and requested detailed proposals of how they would meet the needs of our members.
3. The responses were objectively scored.
4. A shortlist of three providers was agreed at the June 2025 Board meeting.
5. Site visits to the three shortlisted firms took place over the summer.
6. The three providers presented face to face at the September 2025 Board meeting.
7. Based on the site visits and presentations, the Trustee selected L&G as its preferred Master trust.

L&G was chosen for its proven track record, high-quality administration, stability, and status as the largest Master trust by assets under management.

Following a rigorous tender process, L&G was determined to offer the best combination of security, governance, experience, value for money, investment options, flexible retirement options, and member experience.

The first employer joined in 2012. As of November 2025, the L&G Mastertrust has 360 participating employers and over two million members.

The L&G Mastertrust is authorised and supervised by The Pensions Regulator, who ensures robust governance and legal protection for members.

The Trustee of the RMDCP believes that moving members pots from the RMDCP (administered by Scottish Widows) to the L&G Mastertrust will be in members’ best interests. The advantages of moving member pots to the L&G Mastertrust will include:

• lower administration charges being applied to members’ funds
• a better member experience, including ‘at retirement’.  For example, L&G offer excellent modellers and they offer an option to draw down funds throughout retirement – this is not currently available other than by transferring to another pension arrangement.

There would be no costs to you associated with moving your RMDC savings to the L&G Mastertrust. As part of this selection exercise the Trustee negotiated that L&G would cover any costs associated of the move. If any unforeseen events occur, such as conflict or significant market movements, we may need to pause or postpone the transition of your savings. However, rest assured that we will communicate any such changes to you promptly.

The current scheme has significant running costs, and faces increasing regulatory requirements. The new arrangement will improve choice, flexibility, support, and service for members, while allowing them to remain with the chosen provider after retirement, at competitive charges negotiated by us.

There are no contributions being paid to the RMDCP and no contributions will be payable to the L&G Mastertrust.

No, you do not need to anything. We will transfer your pot automatically in July 2026. Once your pot is transferred, L&G will write to you to confirm this and welcome you into the scheme. You can then set up an online account with L&G or download their mobile app.

The main benefits include:

• More retirement support and options, including keeping your pension pot beyond retirement for maximum flexibility.
• Access to drawdown pension freedoms without transferring out.
• Retirement advice available via L&G Financial Advice at competitive charges.
• Personalised communications, market leading mobile app, enhanced member online account.
• Support and guidance for financial wellbeing, with practical tools to help you plan for your future at no additional costs.

We have previously only been able to provided limited ‘at retirement’ support and there has been no ‘drawdown’ option within the RMDCP.  For those reasons, members required additional support from a third party when they were approaching (or were at) retirement; HUB Financial Solutions provided that necessary support.  As a result of the superior proposition provided by L&G, as outlined above, HUB support will cease on the transfer of RMDCP pots to L&G.

The default investment for the new scheme is the Lifetime Advantage Fund, you can self-select another investment option within your online account or L&G app at any time.

If the default option isn’t suitable for you or if you’d like to manage your own investments, you will have access to L&G’s wide range of self-select funds. This includes options to suit individual preferences such as responsible investing and Shariah choices.

You can read more about the L&G Mastertrust range on Your new investment options page.

Please note, if you currently invest in a Shariah fund in the current scheme, when we transition across to the L&G Mastertrust, unless you tell us otherwise, L&G will move your savings to the relevant Shariah fund available to you in the new plan. If you are partially invested in a Shariah fund and another fund in the current scheme, again unless you tell us otherwise, L&G will move your allocated savings to the relevant Shariah fund and the rest of your savings will be invested in the Lifetime Advantage Fund.

For transparency, there are two types of charges within the L&G Mastertrust: an Annual Management Charge (AMC) and a Fund Management Charge (FMC). Together these charges cover the costs of administration, investment management and communications. Our negotiated charges with L&G are considerably lower than the current scheme. The cost of charges to you will depend on the investment choices you make, details are available in the Your new investment options page. However, you can see the charges for the default investment option, the Lifetime Advantage Funds below.

1. Annual Management Charge (AMC)

• What it is: The AMC is a yearly fee that covers the general running costs of the pension scheme. It’s charged as a percentage of your total pension savings.
• How it works: For the L&G Mastertrust, the AMC is 0.05%. This means for every £100 you have invested, you pay 5p each year to cover the scheme’s administration and management costs.

2. Fund Management Charge (FMC)

• What it is: The FMC is a fee for managing the specific investment funds your pension is invested in. It covers the cost of professional fund managers making investment decisions on your behalf.
• How it works: The FMC varies depending on the fund you choose, and, for the default L&G Lifetime Advantage Funds (LAF), it also depends on your Target Retirement Age (TRA).
• For example, the FMC for the LAF is:
• 0.15% for TRAs between now and 2035
• 0.23% for TRAs between 2035 and 2040
• 0.28% for TRAs in 2040 and beyond

It is important for members to understand both as AMC and FMC make up the Total Expense Charge you’ll pay for your retirement savings.

The table below illustrates the charge differences between the current and new scheme. In the current scheme, this illustration assumes you are invested in the current default, the Blended Equity Fund:

Example: If you have a fund value of £10,000 over 12 months would incur a charge of £200 (£10,000 x 0.20%) deducted from your pension pot. See the factsheets on the Your new investment options page for details of individual fund charges.

Information and factsheets about available funds can be found on Your new investment options page, you will also be able to view these in your online account, pension website or L&G app.

Note, past performance is not a guarantee of future results.

Yes, investment options can be changed online at any time once you are a member of the L&G Mastertrust.

The Trustee, together with its investment consultant LCP, has been working closely with L&G to ensure that all members are given the opportunity to select where they would like their pension savings to be invested.

If you are happy with the default investment option of Lifetime Advantage Funds, you do not need to do anything.

If you would like to browse the funds that are available to you, please visit the investment options page.

The expectation is that between 18 June 2026 and 20 August 2026, no member funds will be able to be disinvested – this is what is known as a ‘blackout period’. If you were considering receiving benefits from the Plan during this period (or transferring them to another provider), you may wish to liaise with Scottish Widows and agree an earlier date for your disinvestment.

By 20 August 2026, member assets will be transferred from the RMDCP to the L&G Mastertrust. From the date of transfer, all communication will be with L&G rather than Scottish Widows. In 2027, after production of final Annual Report and other formalities, the RMDCP will be wound up.

Your current pension savings will transfer to the new plan and the RMDCP will be wound up. You will receive communications about this transfer closer to the time.

Yes, you may transfer other private pensions into the new plan with the L&G Mastertrust if you wish.

After the transfer of your pension pot from the RMDCP, you will be able to access your online account with L&G. It is within your online account, or through using the L&G app, that you’ll be able to start your pension consolidation. Please consider seeking independent financial advice before making any transfers.

You may also find this information useful: Pension Transfers | Pension Consolidation | Legal & General

No, there are no charges for transfers into the new plan with L&G. As part of this exercise, we have negotiated for L&G to cover any charges associated with moving your pension savings from the RMDCP into the new plan.

If you die before age 75, any remaining pension savings are transferred tax-free to your beneficiaries. If you die after age 75, any remaining savings are taxed as income for your beneficiaries.

Nomination of beneficiary

All members will be invited to complete a new nomination of beneficiary form for the new plan with L&G. This isn’t to be confused with any salary-related death-in-service benefit that Royal Mail employees receive. It’s important that all members complete their nomination of beneficiaries with L&G, and you can do this in your online account or via the L&G app once you have been onboarded to the new scheme.

No. Royal Mail undertook a formal consultation regarding the RMDCP closing to future contributions. The transfer of member pots from the RMDCP to a Master trust does not require a consultation. The Trustee has set out above why it believes that the transfer is in members’ best interests.

Royal Mail agrees that L&G is the preferred Master trust provider for the RMDCP’s member-assets. The Trustee is working with LCP and L&G on the asset transition. You’ll receive further information regarding the transition at the appropriate time. The RMDCP will continue to be administered by Scottish Widows until the asset transition. The Royal Mail Collective Pension Plan is not currently able to accept transfers-in from the RMDCP or from any other pension arrangement.

If you were considering disinvesting funds (or manually switching funds) during the blackout period (see Q&A: Can I select where my pension savings are invested prior to the move to L&G?), you should consider contacting Scottish Widows to agree an earlier date for this activity. For all other members, no action is required at present.

If you want to select where your savings are invested with L&G prior to transferring RMDCP to L&G, please visit your new investment options page.

Independent financial advisers can be found at Money Helper or Unbiased.

Neither Royal Mail nor the Trustee can provide financial advice or cover costs incurred for such advice.

Current scheme

If you have a question about the current pension scheme that hasn’t been answered in these FAQs, please contact the scheme administrator, Scottish Widows, at:

Scottish Widows

Royal Mail Service Team
PO Box 24174
69 Morrison Street
EDINBURGH
EH3 1HQ

Email - royalmailserviceteam@scottishwidows.co.uk

Phone - 0800 092 8263

New plan

L&G hosted two member webinars providing more information about the transition and what you can expect from the new plan.

The webinars were held on the dates and times below. You can register to receive a link to watch the recorded sessions:

• Tuesday 14 April, 10:30am – 11:30am
  Watch the recording
• Thursday 23 April, 2pm – 3pm
  Watch the recording

• Tuesday 14 April, 10:30am – 11:30am
  Watch the recording
• Thursday 23 April, 2pm – 3pm
  Watch the recording

You can find out more about other Royal Mail pensions here:
https://rmcollectiveplan.com/other-pensions