Royal Mail pension exposure questioned

[TrueBlueTerrier]

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The equity exposure of the £27.7bn ($45.3bn) Royal Mail Pension Plan is significantly higher than it appears from the group’s report and accounts.

These show an equity holding of £4.2bn, representing about 15 per cent of total plan assets. But the pension plan has an additional £6.6bn exposure to equities held via futures, a position that is clear in the pension fund’s accounts but is not disclosed in the group accounts.
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John Ralfe, a pensions consultant, asked: “How can Royal Mail’s accounts give a “true and fair” picture if they fail to mention such a major risk to the business?”

Royal Mail said in a statement that its annual report “meets all the reporting requirements for a plc in the UK and is audited by Ernst & Young”.

Gerry Degaute, chief executive of the pension plan, said the gross equity exposure of the fund had reduced from 70 per cent to 40 per cent over the past six years since a derisking strategy had begun.
As part of that strategy, shares had been replaced by futures to some extent to free up cash with which to buy assets that better match liabilities, such as index-linked gilts.

“Our plan requires exposure to return-seeking assets such as equities, and some of that exposure is through derivatives rather than stocks themselves,” said Mr Degaute.

[POSTMAN]

Royal Mail said in a statement that its annual report “meets all the reporting requirements for a plc in the UK and is audited by Ernst & Young”.

[glenfiddich]

more creative accounting he would be so proud of em