RMPP Intentionally Run down?

[milly]

I have been looking back at some of my Pension statements from 20 years ago and I am beginning to think that money has been deployed knowingly into poor performing assets on purpose so that Royal Mail could have the excuse to shut the scheme down and reduce their payments into the scheme.
Throughout the 1990's the scheme had around 50-60% in UK equities and 10-20% in international equities with the rest made up out of property and other various investments.
Now we have a paltry 11% in equities with rest in ultra conservative government bonds etc.
I imagine that our Pension would have been in rude health if we had stayed in equities.

[deltaforce]

Financial markets have been close to collapse in recent years and the pension scheme could have taken huge losses if it didn't shelter its funds in government bonds. The trustees are duty bound to protect the assets and even now there are question marks over the euro zone stability and our exit.

[RobertT]

Milly - You quite rightly say that RM pensions used to be heavily invested in equities. Those investments took a big hit around a decade ago which is when they started to move over to bonds. Unfortunately by doing that they crystalised their losses and when the markets recovered, which they have since the crash of 2008, those losses were never recovered. As a small investor myself I know that is the total opposite to what you should do, infact just after a drop is actually the best time to invest!

Essentially the same scenario has now happened with bonds. They put the money into what they thought was a safe haven, but they’ve gone down too!

The problems of life expectancy are real and will always weigh down on any DB pension scheme, but in my opinion many of the current issues we face are down to mis-management by the pension trustees and those who advise them how to invest our money.

Financial markets have been close to collapse in recent years and the pension scheme could have taken huge losses if it didn't shelter its funds in government bonds. The trustees are duty bound to protect the assets and even now there are question marks over the euro zone stability and our exit.

Financial markets have not been anywhere collapse, infact the FTSE is currently at an all time high!
Personally I have made a serious amount of money from my equity investments over the last 6-7 years in particular, a lot more than if I’d put it all in bonds!

[heapsy]

I have been looking back at some of my Pension statements from 20 years ago and I am beginning to think that money has been deployed knowingly into poor performing assets on purpose so that Royal Mail could have the excuse to shut the scheme down and reduce their payments into the scheme.
Throughout the 1990's the scheme had around 50-60% in UK equities and 10-20% in international equities with the rest made up out of property and other various investments.
Now we have a paltry 11% in equities with rest in ultra conservative government bonds etc.
I imagine that our Pension would have been in rude health if we had stayed in equities.

I agree. The asset allocation is completely wrong for a pension fund the size of ours. If you think about the number of people, and the spread of age, from 16 years to 65, why would anyone choose short term investments. A mix of UK, Global and a balanced fund containing Bonds, Cash, Property would have been better. If you look nationwide, they are all at it. Longevity is just an excuse to wind everything down.