How much is the deficit then ffs!!!

[POSTMAN]

As an indication of the state-owned company's financial challenges,Mandelson said that Royal Mail's pension scheme has a deficit of between £5 billion-£10 billion.

http://online.wsj.com/article/BT-CO-200 ... 13416.html" onclick="window.open(this.href);return false;

Was on sky news website but i can't find the link again,he had an interview with Randell i think.

Anyway,don't they f***ing know the exact defecit then? :mfo

[TrueBlueTerrier]

The last actuarial review calculated in March 2006 had a deficit of £3.4bn.

The next one is due soon I think and all the figures are pure guess work.

"The deficit when revalued by the trustees will show a deficit of between £8bn and £9bn," http://news.bbc.co.uk/1/hi/business/7906820.stm" onclick="window.open(this.href);return false;

[BELIAL]

But if the stock market index rose by 30% next week then the deficit would be £0 And if it went up just 4% the week after it would be in surplus by roughly £800,000,000

[belle smith]

Theres two diffrent ways of calculating the deficit, an actuarial deficit and an accountance deficit.
when the actuarial deficit was £3.4 billion in 2006 the accountance deficit was £6.6 billion.

The next valuation was due in 31st march 2009 it's been postponed until the goverment get the legislation they need through. They can't afford to have the valuation without having the legislation in place. Legally they need to have the valuation done no later than june 2010.

[k979aaa]

Theres two diffrent ways of calculating the deficit, an actuarial deficit and an accountance deficit.
when the actuarial deficit was £3.4 billion in 2006 the accountance deficit was £6.6 billion.

The next valuation was due in 31st march 2009 it's been postponed until the goverment get the legislation they need through. They can't afford to have the valuation without having the legislation in place. Legally they need to have the valuation done no later than june 2010.

Who would buy? a stake in a company without knowing their liabilities even if the govenment has taken some of that liability but how much? and what part and who would trust a govenment with it's economic record as it now stands!.

[belle smith]

The goverments taking all the liabilities,and taking them off RM balance sheet. Whoever buys a stake would do so with no liabilities (pensions debt).
no one in their right mind would sell a stake in a company without also selling a share of the liabilities except the goverment.

[DGP1]

The only reason the government are taking the pension liability is so they can take the money that is in the pension scheme to try to plug the massive hole in the countries finances (take the money now and worry about paying it back on the never never ).

[BELIAL]

We call it a deficit , but i'd cheerfully take home any so called deficit that actually had £26 billion in the bank Call me a fool ,I'm so kind hearted

[belle smith]

We call it a deficit , but i'd cheerfully take home any so called deficit that actually had £26 billion in the bank Call me a fool ,I'm so kind hearted

But if you owed out £Billions more than £26 Billion and had a legal obligation to pay it, would you still be happy to take it ?
The deficit is very real!

But if the stock market index rose by 30% next week then the deficit would be £0 And if it went up just 4% the week after it would be in surplus by roughly £800,000,000

The stock market has gone up by about by about 20% over the last few months, that helps, but there is still a big deficit and it won't be resolved just by stock market gains!

our pension went into deficit between 2000 & 2003 in large part due to falls in the stock market, but the stock market recovered over the next 3 or 4 years, so the deficit should have been wiped out right?..... wrong!...... it's not money in the bank, it's money (capital) invested to generate a return, and the assumed rate of return, was, is 6% per year. so even though the losses from 2000 to 2003 were recoverd between 2003 & 2006 we "lost" 6 years of growth at the "assumed rate of return" of 6%. thats 36% on 80% of the assets the scheme owened in 2000. thats a s**t load of money lost! and it wont be recoverd by gains in the stock market!

ps. all pension schemes work like this ie. we are all capatalists. but dont tell anyone!

[BELIAL]

Care to let us all know just how this deficit is calculated Belle?
Would you say that pension provision has long term investment as a core feature?

[DGP1]

Any pension deficit will be taken at a snapshot (just like any other balance sheet in any business), so the deficit is taken as if everyone who was entitled to take the pension did but no more money was paid into the scheme, then that would make the deficit.
The only reason why the government want to take on the 'deficit' is to get their hands on the £26 billion that the scheme is worth, to try to reduce the national debt that Broon has got us into (I hate it when the Torys make sense).

[belle smith]

Care to let us all know just how this deficit is calculated Belle?

I assume you are reffering to this

Theres two diffrent ways of calculating the deficit, an actuarial deficit and an accountance deficit.
when the actuarial deficit was £3.4 billion in 2006 the accountance deficit was £6.6 billion

http://business.timesonline.co.uk/tol/b ... 356419.ece" onclick="window.open(this.href);return false;

Jane Newell, the chairman of Royal Mail’s pension fund trustees, said that Royal Mail had given no warning of the change to the scheme. She also challenged Royal Mail’s assertion that it had outlined a deal to repay £6.6 billion over 17 years to the pension fund. She said: “What they are repaying is the £3.4 billion actuarial valuation, not the £6.6 billion accounting figure.”

Royal Mail also outlined this in correspondance they sent to us....I'm afraid i can't find that at the moment, i may have binned it, probaly have!

Would you say that pension provision has long term investment as a core feature?

YES! obviously it does! but when the investments don't perform as expected then thats a big problem! I'm not saying that it's our fault and RM are justified in closing our pension scheme and if you read my other posts in the pension fourm you will see that!

if you want to see more on assumed return on assets for RMPP you'll find it here

http://www.royalmailchat.co.uk/communit ... 27&t=14618" onclick="window.open(this.href);return false;

Any pension deficit will be taken at a snapshot (just like any other balance sheet in any business), so the deficit is taken as if everyone who was entitled to take the pension did but no more money was paid into the scheme, then that would make the deficit.

although, even if money is paid into the scheme at the present rate there will still be a deficit i accept that there is no imediate cash flow problem but RM does have to comply with existing pension legislation, specifically the 2004 Pension Act and if you look at the letters sent to postcomm from the trustees in 2005 with reffrence to the 2006 actuarial valuation (the first one since the introduction of the 2004 pensions act) you will see the problem pension contributions from RM had to increase because of the sticter requierments imposed by the 2004 pension act with regared to accountance methods (FRS 17 This is the basis that the 2006 deficit is calculated at £ 6.6 Billion) and deficit recovery period (where the the allowed time in the trust deed and rules was no longer valid and shorter recovery periods are requiered by The Pension Regulator).

http://www.royalmailchat.co.uk/communit ... 27&t=14612" onclick="window.open(this.href);return false;


even then The pension regulator acted (improperly) outside it's own guidlines by allowing the deficit recovery period that it did, curiosly enough this was to the benifit of the shareholder at the time, Postcomm also acted improperly by refusing to allow a higher funding level in the 2006 - 2010 price review thus jepordising the future of RM and therefore the provision of the USO, this is there primary obligation! to insure the future provision of the USO it's no accident that the Hooper report advicated abolishing Postcomm it's because they fcuked up!!!

look specifically at the letter that doesn't have a link. (it doesn't have a link because it's not posted on postcomms website unlike the other two, maybe they have somthing to hide) i got it under FOI
you will notice that

clarify the trustee position regarding the deficit recovery period

has been highlighted which is why it's not on there web site BECAUSE THE PENSION REGULATOR SHOULD NEVER HAVE ALLOWED THE DEFICIT RECOVERY PERIOD THAT THEY DID & POSTCOMM SHOULD NEVER HAVE IMPOSED (ALLOWED FUNDING FOR) SUCH A LONG DEFICIT RECOVERY PERIOD

The only reason why the government want to take on the 'deficit' is to get their hands on the £26 billion that the scheme is worth, to try to reduce the national debt that Broon has got us into (I hate it when the Torys make sense).

Agree with you 100%.

http://www.royalmailchat.co.uk/communit ... 27&t=15337" onclick="window.open(this.href);return false;

ps. the point about there being diffrent ways of calculating the deficit is that RM and the Goverment quote the one that best suits there purposes at any given time, in 2006 when the shreholder didn't want to put extra money in ( and if The Pension Regulator had done it's job properly they would have had to) they quote the lesser figure, when they want to force through privitisation they quote the higher figure!