Households pay tab for £ 50bn of posties pensions: The liabilities stealthily dumped on the state when Royal Mail was privatised a decade ago

[RobertT]

I'm not sure this is news to us on this forum, but it seems to be for the Daily Mail.

https://www.thisismoney.co.uk/money/mar ... sions.html

Households pay tab for £50bn of posties' pensions: The liabilities stealthily dumped on the state when Royal Mail was privatised a decade ago

Taxpayers are on the hook for more than £50billion of postal workers' pensions, The Mail on Sunday can reveal.

The liabilities were stealthily dumped on the state when Royal Mail was privatised a decade ago under David Cameron's government, which was last night accused of 'a deplorable sleight of hand'.

Royal Mail, since renamed International Distribution Services, was floated on the stock market in 2013. But its share price has slumped amid strikes that are costing it more than £1million a day.

The potential bill to meet future pensions has soared since privatisation from £38billion to £51billion. Former Chancellor George Osborne used the Royal Mail pension fund's assets to reduce short-term Government debt.

This netted £17billion. But a big chunk of Royal Mail assets – Government IOUs known as gilts – were given back to the Treasury for free, leading to an £11billion loss for taxpayers.

'The Government takeover of the Royal Mail pension fund to allow the privatisation was a deplorable sleight of hand,' said Neil Record, chairman of the Institute of Economic Affairs. Removing legacy pension costs from Royal Mail's balance sheet made the shares more attractive to investors. But it also made the company more vulnerable to predators because a big pension fund deficit would have acted as a 'poison pill'.

Czech tycoon Daniel Kretinsky has built up a 23 per cent stake in Royal Mail. He is rumoured to be plotting a break-up that would involve splitting the profitable European packages division from the loss-making parcels and letters.

The pension liabilities of the largest public sector schemes exceed £2trillion – almost as much as the total annual output of the UK economy. 'All of this will have to be paid by future taxpayers,' said Record.

Government spokesman said: 'The decision to assume responsibility for the Royal Mail Pension Plan successfully secured the safety of the fund for employees and facilitated private sector investment.'

[pieoftheday]

Is this the beginning of government eventually saying that our pensions are no longer viable in their current form? The pre 2012 part at least?

[NWpostie]

Is this the beginning of government eventually saying that our pensions are no longer viable in their current form? The pre 2012 part at least?

The government already used the pension fund to pare down government debts, they essentially done a Maxwell, the taxpayers will be footing the bill as a consequence.

[pieoftheday]

Well quite, I can just see it in the not too distant future, that this is unaffordable for taxpayers

[RobertT]

The overall public sector pension liabilities total around £2.4 trillion.

The RMSPS share of that is £51 Billion, which is about 2%.

Other public schemes have already changed from final to average salary accrual for current employees, and increased NRA's, which will reduce the cost going forward. Some of those NRA's are state pension age!

There are also plans to change annual increases from RPI(where it applies) to CPIH, for private sector DB schemes, which will include the RMPP.
That may also include the RMSPS.

CPIH is generally lower than RPI.

[deltaforce]

It was well known at the time that the Goverment would take on the pension deficit to make the sell off viable It’s not as if it is a never ending liability

[pieoftheday]

It was well known at the time that the Goverment would take on the pension deficit to make the sell off viable It’s not as if it is a never ending liability

As long as that liability dosnt before I get mine

[renrag40]

Amen brother!!!

[pieoftheday]

And now there's talk of moving the state pension age to 68, fxxks sake!!

[aiden01]

And now there's talk of moving the state pension age to 68, fxxks sake!!

Really s**t if your 54 or less nitemare ffs.

[TrueBlueTerrier]

And now there's talk of moving the state pension age to 68, fxxks sake!!

It already is https://www.gov.uk/state-pension-age

My retirement age is 67 and I am 59 this year if you were born in 2000 it's already 68. The link will tell you what your retirement age is, at the moment.

[pieoftheday]

I realise the government have a time frame for it but I ws meaning that they're thinking of bringing forward

[pieoftheday]

And now there's talk of moving the state pension age to 68, fxxks sake!!

Really s**t if your 54 or less nitemare ffs.

Worked mine out on the government website 67 for me, I'm 52 at the moment . I think that's too high, but the powers that be like to use ' oh we're all living longer ' mean while back in the real world..