Milkmen's pension scheme is lesson for the postmen

[TrueBlueTerrier]

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Some pension funds are so large their sponsoring companies feel like a subsidiary of the scheme. For Uniq, that is exactly what it intends to become and it could be an example for even bigger businesses.

Uniq was Unigate until it sold its dairy businesses. But if the pension fund owning the company works for the men who delivered milk, maybe it can work for the postmen who follow them from door to door.

Uniq has a pension deficit of £436m and a stockmarket value of just £9m. No way can the business generate the funds to close that gap, but by giving the fund ownership of the business and removing the company’s liability to close the gap, the company might be worth considerably more.

That will still not be enough to pay full pensions to the 21,000 former workers in the fund, but it will pay them more than they would receive from the state’s Pension Protection Fund.

What is happening is the equivalent of the fund seizing the assets of a creditor – or a version of a debt-for-equity swap. And it is taking only 90 per cent of Uniq’s equity, so allowing the company to retain an external valuation.

The deal needs approval but the government should give it more than that: it should hold it up as a model for solving pension problems and it should start by applying it to the Royal Mail instead of privatising the post business.

The Royal Mail pension fund has an £8bn deficit and the business is worth, perhaps, £2bn. Instead of raiding the £26bn of assets, privatising the business and giving 10 per cent to the workers as planned, the government should apply the Uniq model and give the fund 90 per cent (or more) of Royal Mail.

When the workers have an incentive to make the business pay, its value may rise sufficiently to close the deficit. This is a trick the milkmen can teach the postmen.

[resperin]

lol so lame, bet they deliberatly found out what the milkman's pension scheme is to just make that topic title

[plainpat]

Gold Plated pensions for the fat cats :lfo :cfo

Gold Top pensions for the posties