POLB 16(5'")
Post Office Limited — Strictly Confidential
POLB 16/37 - 16/39
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)
Minutes of a Board meeting held at 12.00 noon on 29" June 2016
at Warren House, Warren Road, Kingston Upon Thames, Surrey, KT2 7HY.
Present:
Tim Parker
Richard Callard
Alisdair Cameron
Tim Franklin
Virginia Holmes
Ken McCall
Carla Stent
Paula Vennells
In Attendance:
Alwen Lyons
Neil Hayward
Natasha Wilson
William Weir
POLB 16/37
POLB 16/38
Chairman
Non-Executive Director
Chief Financial Officer
Non-Executive Director (part item 38 & item 39)
Non-Executive Director
Senior Independent Director
Non-Executive Director
Chief Executive
Company Secretary
Group People Director
Director, Reward & Pensions
Willis Towers Watson
INTRODUCTION
(a)
(b)
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The Chairman opened the meeting, and welcomed Neil Hayward,
Group People Director, Natasha Wilson, Head of Reward and
Pensions, and William Weir, Actuary Willis Towers Watson.
The directors declared that they had no conflicts of interest in the
matters to be considered at the meeting in accordance with the
requirements of section 177 of the Companies Act 2006 and the
Company's articles of association
PATHFINDER
(a)
(b)
Neil Hayward introduced the paper explaining the conclusion of the
consultation process and the recommendation to the Board. He
clarified the changes made to the pensions proposal following the
member consultation to:
e Close the DB Plan to future accrual at the end of the current
financial year, March 2017;
« Change the benefits accrued pre-2012, to revalue in line with
RPI instead of CPI (subject to final confirmation from the
Cabinet Office),
Neil Hayward explained that the Board were being asked to
approve the submission of a recommendation to the Plan
POL Board minutes, 29" June 2016 4
POL00027643
POL00027643
Post Office Limited — Strictly Confidential
Trustee on the 5" July for consideration at the Trustee meeting
on the 15" July.
(c) The Board recognised the implications of the pension proposal on
individuals and discussed the proposed changes.
(d) Tim Franklin joined the meeting.
(e) William Weir explained the assumptions made in his advice to the
Company, and that the self-sufficiency approach proposed would
protect the members’ accrued benefits and de-risk the plan.
(f) It was recognised that the Trustee and the Plan Executive would not
have much time before their July meeting to consider the proposal
and that it might need to be discussed again at the September
Trustee Board.
(g) Virginia Holmes acknowledged the legal and actuarial advice
received by the Company and affirmed her support for the proposal.
(h) Having considered all the points raised in the Board paper,
predicated on legal and actuarial advice, the Board approved a
submission to the Plan Trustee recommending:
1. To close the DC Plan to future accrual at the end of the
current Financial Year (March 2017)
2, Benefits accrued pre-2012 (whether final salary or CSDB) will
revalue in line with RPI (subject to final confirmation from
Cabinet Office).
3. Benefits built up from 1 April 2012 to increase in line with CPI.
4. DB Plan members will join the Post Office Pension Plan (‘the
DC Plan’) from 4 April 2017.
5. The De IPlan will be improved with an enhanced employer
contribution rate of 1% as per the initial proposal.
6. Death in Service lump sum benefits will increase to a rate of
4x salary (=2x if members have financial dependents) from 1
April 2017
7. Ill health benefits will be provided (subject to medical
consent) at a rate of half pay until the individual reaches age
65 or returns to work.
(i) The Board delegated authority to the Group Executive to action post
closure options at the appropriate time.
POLB 16/39 DATE OF THE NEXT MEETING
(a) It was noted that the next meeting of the Board would be on 25 July
2016.
Chairman ~ . Dat
POL Board minutes, 29" June 2016 2