'I may have to work beyond 65'

[TrueBlueTerrier]

http://news.bbc.co.uk/1/hi/uk/7908270.stm" onclick="window.open(this.href);return false;

Government plans to sell their stake in Royal Mail have met with angry opposition. But trustees of the company's pension fund have also warned there will be devastating consequences if the sale does not go ahead.

In two weeks, Sean Tait will complete his 35th year of service as a postman. Since the age of 20 he has worked for the Royal Mail in Folkestone, Kent.

"When I joined, everybody said 'You're in a job for life'," he said as dozens of his colleagues climbed down from the coaches delivering them to the protest. "The pension was almost incomparable to other peoples'."

But he said he would not advise young people to begin a career delivering and sorting mail.

"The whole business is totally insecure now. The younger you are, the more changes affect you," he said.

Financial setback

But at 55, the changes haven't even escaped Mr Tait. Royal Mail's final salary pension scheme ended in April 2008, and while the contributions he has already made are safe, he's already suffered a financial setback.

"To get what I would have got at the age of 60 I'm going to have to work into my 61st or 62nd year, and changes planned for the future could mean I've got to work even longer."

He says Monday's warning about the health of Royal Mail pensions made the outlook even worse. "Potentially to get the same pension, I might even have to work past 65."

He disagrees with the claim the government's efforts to part-privatise the Royal Mail are the best hope of preserving the pension scheme, saying instead that taxpayers' money should be used to under-write the problems with the pension scheme.

"That would free up the money that the business is currently paying into it, in excess of what it would normally pay," he says.

The postal industry is heavily unionised, and Mr Tait began representing fellow Communication Workers Union members after a year at work.

He's now a divisional representative, covering Kent, Sussex and Surrey.

The union blames its members' pension woes on Royal Mail's efforts to save the taxpayer some money.

"Royal Mail took a substantial pensions holiday throughout the 1990s and into the early part of this century. During that time they were paying substantial amounts of money direct to the government," Mr Tait says.

"We've actually been assisting people to pay less tax in the past, and that pension holiday is a major contribution to the problems we've now got.

"The taxpayer gained as a result of that, and now we need something back from them."

[Magnus]

Don't be surprised if an increasing number of people work beyond the age of 70 in the future.

In fact, we might even have a return to the "good ol days" of working till you drop.

[k979aaa]

If TNT get their gift from lord mandelson they will slash staff which will make the pension scheme even more unstable than it is!. If TNT do get thier gift from lord mandelson i will pull my conributions to the pension fund and will not invest in any of NEW LABOUR'S pension arrangements for it is their fault and not ours nor mine that the whole pension system is in the mess it is in after all. IT WAS THAT MAN GORDY BROWN WHO CAUSED ALL THE WITH HIS FRS-17 ACOUNTING PROCEDURES WHICH HE ANOUNCED IN HIS FIRST BUDGET AS CHANCELOR IN 1997!.

[TrueBlueTerrier]

The thing is and this is only my opinion. The deficit is a smoke screen whether its in profit, 1bn in deficit or 1trillion in deficit does not matter a jot.

The deficit is a figure which the pension trustees say would be needed to guarantee immediate payment of all accrued benefits of past and serving members of the fund if the company folded on the particular day. It is also a reflection on the shares that the pension fund has invested in on that particular valuation.

Now with that in mind ask your self if a Government owned business went to the wall who would pay the pensions - the government.

Also ask yourself even if the worst did happen would everyone be able to claim on the fund immediately or would a a substantial amount of members even if they are a minority, have to wait till their retirement to claim.

Don't forget all that advertising with shares said "Share prices can fall" well guess what they can also climb as well. Although I personally find it questionable that my pension can be gambled with on the stock market by people who have no idea what my preferences and politics are, I do recognise that historically and taken as a whole shares values tend to increase in value over the long term, but of course this is no guarantee that they always will. But its strange that the "Market" talks down pension schemes when it suits them and talk up City shares when they can, but convienently forget that both are intrinsically linked.

[BELIAL]

Well put TBT a bullshite smokescreen and a cleverly crafted accountancy tool to beat down the workforce. Caught a snippet of a pensions auditor the other day on World at One , he barely managed to stifle his laughter as he explained the same thing and pointed out that there wasn't a pension fund in existence that was not in a similar position and that such snapshot deficit calculations were indeed meaningless since the whole point of a pension plan was it's long term performance. Bullshit baffles brains

[pony]

I'll probably stay on till over 65 but i'll drop to 20 hours and work like a snail.
Probably cut off every day and take the absolute piss.
Try and sack an old man and they'll be uproar :)

[belle smith]

If TNT get their gift from lord mandelson they will slash staff which will make the pension scheme even more unstable than it is!. If TNT do get thier gift from lord mandelson i will pull my conributions to the pension fund and will not invest in any of NEW LABOUR'S pension arrangements for it is their fault and not ours nor mine that the whole pension system is in the mess it is in after all. IT WAS THAT MAN GORDY BROWN WHO CAUSED ALL THE WITH HIS FRS-17 ACOUNTING PROCEDURES WHICH HE ANOUNCED IN HIS FIRST BUDGET AS CHANCELOR IN 1997!.

FRS-17 accountance stanndards came in 2004 Pension act, Gordon Brown removed tax credits from share dividends in 1997 reducing the rate of return for pension funds, Norman Lamont had previously cut them (David Cameron was in his treasuery team at the time), Nigel Lawson introduced the 1988 Tax laws which taxed pension funds in surplus and "incuraged" companys to take pension holidays. Theres no shortage of polaticians who have used pension schemes as a cash cow.

but your right about FRS 17, Pension schemes which were fully funded in 2003 on actuarial basis, were automatically in deficit in 2004 because liabilities had to be measured on FRS 17 basis "mark to market". Added to that permissable deficit recovery periods were reduced, after the 2003 actuarial valuation deficit recovery period was 40 Years in line with the trust deed and rules (for RMPP). after the 2006 valuation (first valuation under 2004 Pension act) this was changed to 20 years measured from 2003, and even this was significantly outwith the guidelines of The Pensions Regulator, something very dubious about this ie. was done for the benifit of the shareholder, otherwise they would have had to put money into pension scheme in 2006.

The 2004 Pension Act is supposed to protect pension members, and it does but, these 2 measures are there to protect The Pension Protection Fund, which was also established by the 2004 Pension Act.