Ministers Set to Roll Out "Pioneering" Pension Deal of Royal Mail More Widely

[TrueBlueTerrier]

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Today, an influential parliamentary committee placed the “pioneering” pension deal of Royal Mail under the spotlight.

Guy Opperman, the Pensions minister, informed the Work and Pensions Committee that the government is looking for the simplest way to launch collective defined contribution (CDC) pension schemes to the United Kingdom.

Recently, Royal Mail agreed pay and pensions deal with its main union – Communication Workers Union that has the 110,000 members – putting a close to a bitter and protracted industrial dispute. As the postal workers prepared for their first post-privatisation strikes in 2017, the shares of the company plunged, and Royal Mail was booted out of the FTSE 100.

The postal giant recovered in the most recent reshuffle after approximately £2bn has been placed on its market cap since a nadir in November 2017.

As a part of the agreement, Royal Mail will launch a CDC pension scheme. This has been billed as a halfway house between a defined benefit fund and a defined contribution scheme. A defined benefit fund is where members will receive a final salary while a defined contribution scheme is where retirement payouts will be dependent on the investment performance of underlying assets.

CDC schemes guarantee that retirement savings are worth a minimum amount. These are popular abroad, particularly in the Netherlands. However, there is a lack of legislation in the United Kingdom allowing them to be introduced.

Opperman said that the government was attempting to look for a way of utilising the current statute. He said: “But there is still a long way to go.”

[TheTrolleyMan]

Under the new pension deal / legislation , does RM get access to the pre privatised / protected pension pot ?

[RobertT]

Under the new pension deal / legislation , does RM get access to the pre privatised / protected pension pot ?

Do you mean the pre-April 2012 RMSPS - the bit the government/taxpayer is responsible for? If so, the answer is no!

[BELIAL]

Is that a deffo , cos all that has been mentioned is unspecified rule changes, and please forgive me, but given past experience, when the rule changes are are unspecified ,then whatever the stated aims the workforce will be shafted.The devil is always in the detail,

[RobertT]

As part of the deal to privatise RM, the government/taxpayer took over the liabilities for the pensions we’d accrued up to 2012, They also had the money that was in the scheme up to that point – around £28 Billion, and that has been absorbed by the Treasury. Therefore there is no longer a big pot of money to fund our RMSPS pensions – it is paid for by taxation, etc.
There is no pot for RM to access!

However, there is question mark over what happens to any surplus, if there is one, from the post 2012 RMPP when it closes to future accrual in 2 weeks time.

[TheTrolleyMan]

Thanks for the info Robert

[fly-catchers]

As part of the deal to privatise RM, the government/taxpayer took over the liabilities for the pensions we’d accrued up to 2012, They also had the money that was in the scheme up to that point – around £28 Billion, and that has been absorbed by the Treasury. Therefore there is no longer a big pot of money to fund our RMSPS pensions – it is paid for by taxation, etc.
There is no pot for RM to access!

However, there is question mark over what happens to any surplus, if there is one, from the post 2012 RMPP when it closes to future accrual in 2 weeks time.

What happens when capita takes over?

[fishtank]

CDC schemes guarantee that retirement savings are worth a minimum amount.

No they don't.
How are members supposed to know what's going on when these guys can't even get it right.

[RobertT]

As part of the deal to privatise RM, the government/taxpayer took over the liabilities for the pensions we’d accrued up to 2012, They also had the money that was in the scheme up to that point – around £28 Billion, and that has been absorbed by the Treasury. Therefore there is no longer a big pot of money to fund our RMSPS pensions – it is paid for by taxation, etc.
There is no pot for RM to access!

However, there is question mark over what happens to any surplus, if there is one, from the post 2012 RMPP when it closes to future accrual in 2 weeks time.

What happens when capita takes over?

In what way?

Capita are taking over the administration of the RMSPS from the government, they’re doing it for a lower cost!

It was announced recently that they were in financial trouble, but according to this article they are undergoing a restructuring program to ensure they don’t go the same way as Carillion.

If they were to collapse then presumably the government would take over again, at least in the shorter term?

[BELIAL]

As part of the deal to privatise RM, the government/taxpayer took over the liabilities for the pensions we’d accrued up to 2012, They also had the money that was in the scheme up to that point – around £28 Billion, and that has been absorbed by the Treasury. Therefore there is no longer a big pot of money to fund our RMSPS pensions – it is paid for by taxation, etc.
There is no pot for RM to access!

However, there is question mark over what happens to any surplus, if there is one, from the post 2012 RMPP when it closes to future accrual in 2 weeks time.

What happens when capita takes over?

In what way?

Capita are taking over the administration of the RMSPS from the government, they’re doing it for a lower cost!

It was announced recently that they were in financial trouble, but according to this article they are undergoing a restructuring program to ensure they don’t go the same way as Carillion.

If they were to collapse then presumably the government would take over again, at least in the shorter term?

Your shitting me right ,Capita are "taking over the administration of the RMSPS from the government". Awh ,c'mon that must be a wind up nobody could be that brazen ffs. Surely not linked to the regulatory changes is it?