Royal Mail Pensions Facts (From Midge)

[Big Daz]

Comrades,

Some useful facts regarding Royal Mail Pension Scheme:

1. The Government took a total of £1.7 billion in External Financing Limit dividends from Royal Mail while it took a 13 year pensions holiday between 1990 and 2003. It Government rules on occupational pensions that brought about this pensions holiday, by not allowing further investment in the scheme when it was in surplus without having to pay a punitive tax, or using the surplus to further increase benefits. This stopped the scheme from putting aside funds for the ‘rainy days’ that its investments are suffering now. Heads they win, tails you lose.

2. Royal Mail is currently repaying the Pension Scheme deficit at £280m plus per year, over 17 years, starting from 2006. This was set after the March 2006 valuation. Previously, after the March 2003 evaluation, a £2.5bn deficit was being repaid at a rate of £140-£150m per year, over 40 years.

(For evidence see: House of Commons Trade and Industry Committee Report, Royal Mail after Liberalisation, Second Report of Session 2005-06, Volume I, pp27-38 at http://www.publications.parliament.uk/p ... 0/570i.pdf" onclick="window.open(this.href);return false;
and Volume II, Oral and written evidence, EV113-120 at http://www.publications.parliament.uk/p ... /570ii.pdf" onclick="window.open(this.href);return false;)

3. Between the years 1990-2003, Royal Mail saved billions of pounds by not paying contributions for those 13 years, and customers benefited from lower prices at the same time.

4. The impact of the current recession will exaggerate the scale of the Pension Scheme deficit, because the value of scheme investments will have plummeted.

In case you need some facts to respond to local media interest.

Midge

[belle smith]

Cheers for the info Daz, it does appear that merging posss & pops into rmpp has condemed pops to death.

ps. who's midge

[Big Daz]

Midge is a occasional poster on this site who sends through some top class info outside of cyberspace which in turn is fwd on etc etc.

[PrestwickPostie]

i am pretty sure Gordon Brown took £1.25 billion from our pension fund and other pension funds to help pay for his spending projects when labour got in power in 1997

[belle smith]

extra info on tables from second link; ev116 & ev117

POSSS POPS
DATE OF ACTUARIAL
VALUATION FUNDING ASSETS LIABILITIY FUNDING ASSETS LIABILITIY
LEVEL (£ Million) (£ Million) LEVEL (£ Million) (£ Million)
31 MARCH 1988 103.6% 6.302 6.083 ------- --------- --------
31 MARCH 1989(interim) 109.6% -------- -------- 103.8 47.3 36.1
31 MARCH 1990(interim) 122.8% -------- -------- ------ -------- --------
31 MARCH 1991 122.4% 7,879.5 6,437.5 ------ -------- --------
31 MARCH 1994 104% 9,724 9,354 ------ -------- --------
31 MARCH 1997 101.9% 11,048 10,842 ------ -------- --------
31 MARCH 1998 106.9% 13,401 12,536 100% -------- --------
31 MARCH 1999(interim) ------- ------ ------ 94% 1,880 2,000
31 MARCH 2000 106.1% 15,480 14,590 94.9% 2,419 2,549
31 MARCH 2003 RMPP £ 2.5 Billion

[belle smith]

[RobertT]

4. The impact of the current recession will exaggerate the scale of the Pension Scheme deficit, because the value of scheme investments will have plummeted.

Stock markets have actually gone up a lot since March 2009.

I put some money into a fund (via an ISA) in February 2009 and that has gone up 35% since - not a bad return in a recession!