Royal Mail pension deficit is set to rise

[TrueBlueTerrier]

http://www.theherald.co.uk/politics/new ... o_rise.php" onclick="window.open(this.href);return false;



The cost to the taxpayer of absorbing the Royal Mail Group's multi-billion-pound pension deficit is set to rise, Postal Services Minister Pat McFadden has told MPs.

Under controversial plans to part-privatise the Royal Mail, the government was set to fill a £6bn black hole in the pension scheme.

However, Mr McFadden yesterday said that figure was based on a year-old valuation and that "the funding position of the scheme could well have worsened" since then.
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At Commons question time, Mr McFadden said: "We estimate that the Government will assume total liabilities of £29.5bn and assets of £23.5bn from the Royal Mail pension scheme. This will mean government absorbing a deficit of some £6bn.

"This assessment of the liabilities in the scheme and the funding position is based on the most recent trustee evaluation from March 2008.

"However, we do anticipate that the funding position of the scheme could well have worsened since that date."

The Postal Services Bill, currently going through Parliament, contains measures to sell off up to 49% of Royal Mail Group to a private company while the Government rescues the pension scheme.

The proposals have caused deep divisions within the Labour movement, with trade unions and backbench MPs voicing opposition.

[BELIAL]

Drip, drip, drip and the propaganda rolls on. Conveniently forgot to mention the 13 year payments holiday and the £1.2 billion smash and grab special dividend raid. Strange that our public servants are so keen to prostitute their good characters for such an obviously questionable adventure? The rewards must be potentially very attractive

[ltj]

It is unfortunately true that my pension trustees are Dinosaurs as said yesterday in the Lords,I am a pensioner member of the closed POSS. scheme, having retired in 1996, because of ill health, how dare my trustees think that they are above criticism, in their investment strategy,refusing to accept a wholesale necessity of pulling the plug on UK and overseas equities, and get into bonds and gilts, for the foreseeable future, admittedly at a lower return, but at least not a loss!!!, and a wholesale Government bale out to boot, my pension fund deserves better corporate governance than this, what a dreadful mess, which could have been avoided without the benefit of hindsight.

[belle smith]

It is unfortunately true that my pension trustees are Dinosaurs as said yesterday in the Lords,I am a pensioner member of the closed POSS. scheme, having retired in 1996, because of ill health, how dare my trustees think that they are above criticism, in their investment strategy,refusing to accept a wholesale necessity of pulling the plug on UK and overseas equities, and get into bonds and gilts, for the foreseeable future, admittedly at a lower return, but at least not a loss!!!, and a wholesale Government bale out to boot, my pension fund deserves better corporate governance than this, what a dreadful mess, which could have been avoided without the benefit of hindsight.

Have to add as a former POPS member, more than a bit pissed off that the schemes were merged into RMPP.

2000 POSSS assets and liabilities roughly £15 Billion surplus £890 Million
2000 POPS assets and liabilities roughly £2.5 Billion deficit £130 Million
2003 RMPP deficit £2.5 Billion
added to that RM only ever took payment holiday on POSSS 13 YEARS somthing they have been strangely quiet about.

Can anyone spot the historical deficit?

[k979aaa]

It is unfortunately true that my pension trustees are Dinosaurs as said yesterday in the Lords,I am a pensioner member of the closed POSS. scheme, having retired in 1996, because of ill health, how dare my trustees think that they are above criticism, in their investment strategy,refusing to accept a wholesale necessity of pulling the plug on UK and overseas equities, and get into bonds and gilts, for the foreseeable future, admittedly at a lower return, but at least not a loss!!!, and a wholesale Government bale out to boot, my pension fund deserves better corporate governance than this, what a dreadful mess, which could have been avoided without the benefit of hindsight.

Have to add as a former POPS member, more than a bit pissed off that the schemes were merged into RMPP.

2000 POSSS assets and liabilities roughly £15 Billion surplus £890 Million
2000 POPS assets and liabilities roughly £2.5 Billion deficit £130 Million
2003 RMPP deficit £2.5 Billion
added to that RM only ever took payment holiday on POSSS 13 YEARS somthing they have been strangely quiet about.

Can anyone spot the historical deficit?

So what your saying is we the POPS newer entrants after 1987 are paying the price for royalmail making so many older members of the POSSS scheme redundant in which they got the pay offs and we got the SH*T instead!. IS THE REASON BEHIND THIS THAT MAKING TOO MANY WORKERS REDUNDANT AT THE SAME TIME WILL CAUSE THE SCHEME TO COLLAPSE AND AS SUCH WILL NOT ALL THE ROYALMAIL PENSIONS SCHEME'S COLLAPSE!. A HOUSE OF CARDS SPRINGS TO MIND.

[belle smith]

So what your saying is we the POPS newer entrants after 1987 are paying the price for royalmail making so many older members of the POSSS scheme redundant in which they got the pay offs and we got the SH*T instead!. IS THE REASON BEHIND THIS THAT MAKING TOO MANY WORKERS REDUNDANT AT THE SAME TIME WILL CAUSE THE SCHEME TO COLLAPSE AND AS SUCH WILL NOT ALL THE ROYALMAIL PENSIONS SCHEME'S COLLAPSE!. A HOUSE OF CARDS SPRINGS TO MIND.

I'm saying that RM grossly mismanaged the POSSS scheme (no fault of POSSS) members. it was over exsposed to equities, Which was fine (on the surface) as long as the stock market was performing well this enabeled RM to take a significant pension holiday. But when the dot com bubble burst between 2000 & 2003 both POSSS & POPS moved quickly into large deficits, see letter from trustees to Postcomm 21st July 2005. http://www.royalmailchat.co.uk/communit ... 27&t=14612" onclick="window.open(this.href);return false; 1st link

The point i was making was that the deficit in POPS would ( i belive ) be manageable for RM to recover without tax payer gaurentee. Where as RM are unable to trade their way out of POSSS deficit. and merging the two schemes rather than save POSSS brought down POPS.

it's a bit like if you were to merge a small struggaling but solvent bank with RBS.

POSSS had assets and liabiltes of roughly £15 billion in 2000 but had £890 surplus
POPS had assets and liabilities of roughly £2.5 billion in 2000 but had £130 deficit
RM still continued pension holiday on POSSS until 2003
by the time they had been merged and had a actuarial report done in 2003 they had a combined deficit of £2.5 billion
http://www.royalmailchat.co.uk/communit ... 27&t=14636" onclick="window.open(this.href);return false; 2nd link ev116 & ev117doesn't give assets and liabilites for each scheme but theres enough info to work it out.
in 2005 81% of the assets were held in equities (high risk high return) http://www.royalmailchat.co.uk/communit ... 27&t=14618" onclick="window.open(this.href);return false; page 25 sections 5.6 & 5.7

now either the liabilites of POPS doubled in 3 years.
the assets of POPS evaperated in 3 years.
or the baulk of the £2.5 billion deficit ( not all) relates to POSSS.

btw not all RM pensions would collapse the scheme for senior execs has never been merged. if we had to go to the Pension Protection Fund (WE WONT) :lfo & :cfo wouldn't be joining us. although PPF pay roughly 90% of pension value they have a celling of i think £27 000 per year and we couldn't expect :lfo & :cfo & co to get by on that could we.

ps. you are right to point out that RM were fund VR's through the pension scheme again see report into RMPP commisioned by Postcomm. http://www.royalmailchat.co.uk/communit ... 27&t=14618" onclick="window.open(this.href);return false; page 27

pps. sorry this is a bit messy ie. jumping to diffrent threads.

[BELIAL]

No need to apologise Belle , I thank you for restating that you can never trust RM figures ,just spurt after spurt of made up crap ,lies ,distortion legal back flips ,Olga corbet eat your heart out
All goes in one direction though ,one constant objective; shaft the workers cos they are to thick to see through our legalise weasel words and bullshit. Tick tock