Royal Mail pension assets sell-off could generate £25bn

[fishtank]

Royal Mail pension assets sell-off could generate £25bn
http://www.guardian.co.uk/uk/2012/mar/0 ... s-windfall" onclick="window.open(this.href);return false;

Tories urge chancellor to spend windfall from investments to pay postal workers' retirement benefits on infrastructure projects

The government could raise as much as £25bn by selling off assets built up to pay retirement benefits to postal workers from Royal Mail, to which it expects to gain access over the next couple of weeks.

The money has been invested in shares, bonds and property by the Royal Mail Pension Plan but George Osborne is being encouraged by backbenchers to spend it on new priorities such as an infrastructure fund to build new rail and energy networks.

The portfolio of assets will come available under a scheme to make Royal Mail easier to sell off by transferring its pension liabilities – and its credits – to the government once permission under competition rules is granted by Brussels.

"State aid approval is the next critical step in our plans to put Royal Mail on a secure footing. We have been working closely with the European Commission and expect a decision in the coming weeks," said a spokeswoman for the Department of Business, Innovation and Skills.

The BIS would not comment on the level of assets transferring to the government at this stage, nor predict what use might be made of the money.

Treasury officials admitted that the £25bn – still to be valued properly – would reduce public sector debt on the government's balance sheet, but they said it could not be considered a windfall because of ongoing liabilities to retired postal workers.

The publicly owned Royal Mail is currently required to set aside specific financial provisions to pay for its existing 300,000 pensioners and future retirees on a continuing basis, just like a private sector company. The government does not have to do this, and so the £25bn portfolio is counted as a "surplus" while liabilities are treated similarly to the unfunded pension schemes of the NHS or armed forces.

The Royal Mail had been seen as unsellable by the state because of the £4.5bn pension deficit built up after management decided to take a "holiday" and cease paying into the schemes.

The Communications Workers Union said it was pleased that ministers were taking responsibility for the retirement funds and releasing it from the uncertainty of the current system. But it remains strongly opposed to privatisation, which, a spokeswoman said, is "not in the interests of the company, the workers or the customers".

The Royal Mail declined to comment on the pension fund developments but the chancellor will clearly be delighted at the possibility of a windfall, which might be factored into to his thinking for the 21 March budget.

Some backbenchers want any cash to prime the pump on the new road, rail and energy infrastructure that Britain needs at a time when it is trying to introduce a lower-carbon economy.

[fishtank]

The Communications Workers Union said it was pleased that ministers were taking responsibility for the retirement funds and releasing it from the uncertainty of the current system

Excuse me if don't seem too thrilled by this.
Yes it removes the uncertainty of the pension deficit but it replaces it with in my opinion the even greater uncertainty of sitting in a Government run,completely unfunded scheme that we know nothing about and will be completely at the whim of whatever policy makers happen to be in power at any particular time.
You only need to look at what has happened to public sector pensions over the last 12 months for proof of that scenario.
I fear the CWU has snatched at the first available lifeboat without looking to see if there were any holes in it first.

On another related note,doesn't it give you a warm feeling inside to know that your pension assets will be sold off to prop up a Tory Government and probably pay for a cut in the top rate of tax so that Tarquin on £500k a year can send Tarquin Jnr to Eton.

[hubbahubba]

This government is no better than Maxwell,you thought the teachers got sh*t on,wait in see how we end up......

[Budfrog]

I think it's a great idea ... could be used to pay some Royal Bank of Scotland bank bonuses for next year.

[P13]

The Communications Workers Union said it was pleased that ministers were taking responsibility for the retirement funds and releasing it from the uncertainty of the current system

Excuse me if don't seem too thrilled by this.
Yes it removes the uncertainty of the pension deficit but it replaces it with in my opinion the even greater uncertainty of sitting in a Government run,completely unfunded scheme that we know nothing about and will be completely at the whim of whatever policy makers happen to be in power at any particular time.
You only need to look at what has happened to public sector pensions over the last 12 months for proof of that scenario.
I fear the CWU has snatched at the first available lifeboat without looking to see if there were any holes in it first.

On another related note,doesn't it give you a warm feeling inside to know that your pension assets will be sold off to prop up a Tory Government and probably pay for a cut in the top rate of tax so that Tarquin on £500k a year can send Tarquin Jnr to Eton.

You are right fishtank, what happens in 10 years time or so when some toffee nosed tory twats start asking why are we paying for those lazy posties pension ?

[claretandblue]

The Communications Workers Union said it was pleased that ministers were taking responsibility for the retirement funds and releasing it from the uncertainty of the current system

Excuse me if don't seem too thrilled by this.
Yes it removes the uncertainty of the pension deficit but it replaces it with in my opinion the even greater uncertainty of sitting in a Government run,completely unfunded scheme that we know nothing about and will be completely at the whim of whatever policy makers happen to be in power at any particular time.
You only need to look at what has happened to public sector pensions over the last 12 months for proof of that scenario.
I fear the CWU has snatched at the first available lifeboat without looking to see if there were any holes in it first.

On another related note,doesn't it give you a warm feeling inside to know that your pension assets will be sold off to prop up a Tory Government and probably pay for a cut in the top rate of tax so that Tarquin on £500k a year can send Tarquin Jnr to Eton.

correct me if im wrong but isn't the government only taking over our pensions upto march 2012 and royal mail will start afresh with no deficit
for the rest of our pension ? so what weve already earned can't be touched.

[TrueBlueTerrier]

The Communications Workers Union said it was pleased that ministers were taking responsibility for the retirement funds and releasing it from the uncertainty of the current system

Excuse me if don't seem too thrilled by this.
Yes it removes the uncertainty of the pension deficit but it replaces it with in my opinion the even greater uncertainty of sitting in a Government run,completely unfunded scheme that we know nothing about and will be completely at the whim of whatever policy makers happen to be in power at any particular time.
You only need to look at what has happened to public sector pensions over the last 12 months for proof of that scenario.
I fear the CWU has snatched at the first available lifeboat without looking to see if there were any holes in it first.

On another related note,doesn't it give you a warm feeling inside to know that your pension assets will be sold off to prop up a Tory Government and probably pay for a cut in the top rate of tax so that Tarquin on £500k a year can send Tarquin Jnr to Eton.

correct me if im wrong but isn't the government only taking over our pensions upto march 2012 and royal mail will start afresh with no deficit
for the rest of our pension ? so what weve already earned can't be touched.

Unless they change the law. So to put it in perspective, the Government is taking over the Pension Liabilities and assets, and only the Government can change the law which protects earned pension benefits.

So if in say 20 to 30 years or so we have another financial crisis will the pensions for former Royal Mail workers be affordable according to the government of the day. I don't think they will change the law just to punish us, but I also think its naive to expect that it won't be under pressure at some point in the future, or that some unscrupulous politician won't use the pension benefits as a Damocles sword if Industrial Action is threatened. You can imagine the Daily Wail headline "Posties with Gold Plated Pensions hold the Public to ransom"

[fishtank]

correct me if im wrong but isn't the government only taking over our pensions upto march 2012 and royal mail will start afresh with no deficit for the rest of our pension ? so what weve already earned can't be touched.

What will actually happen is not set in concrete yet but the idea that any part of our pension can be protected to an extent that it "can't be touched" is the stuff of dreams.
Clause 19 provides protection against RMPP members’ benefits being adversely affected but we will be paid on an aggregate system so that final pension cheque will depend very much on how much you have built up before the cut off date,how long you have to go and what benefits the new Royal Mail Statutory Pension Scheme offers.
At the end of the day the only protection is a government bill and the government are picking up the bill so at some point there may/will be pressure to reduce one bill by amending another.

[Budfrog]

I believe that future VR payments are threatened more than the pension itself. RM, and definitely a Private RM, will no longer be paying up to 2 years pay when they can get away with £11k.

[disheartened]

This government is no better than Maxwell,you thought the teachers got sh*t on,wait in see how we end up......

You beat me to it,as soon as i read the original post the name MAXWELL sprung to mind,my old Dad worked at the Sun Printers in Watford for over 30 years,he loathed the man,the people affected by the Maxwell pension fiasco did'nt see it happening,it looks as we'll have the pleasure of watching our goverment pull our pants down and give us a right old rogering

[johno47]

Lets be honest, the only reason this Goverment wanted to sell RM was to get its hands on our pension assets, ive been saying this for a long time now, i emailed the pension people ages ago now and asked if the Goverment would be selling off our assets over a period of time and was told in a very roundabout way that this was correct, the business might not be worth much but our pension assets are, and as for the VR payments ime fairly sure that due this goverments change in the redundancy law that from 2013 workers will only get a maxium of 20 weeks severence pay from companies, so about £6000, so watch out for mass redundancys then, RM wont miss a chance to get rid of us on the cheap.

[red1968]

I've left RM ,would I be wise to transfer my pension now?

[borders]

what pisses me off is this money is our deferred wages . its not money that any Government can nick/borrow whatever, to fund their latest project.
its our money for christs sake
i agree with TBT , how can we trust any politician further down the line ? have we not learnt anything from all the stories that have come out over the last couple of years ?
read this article regarding the Miners Pension and this was under a Labour Government


New Labour scroungers fiddle £4Billion from the hard working miners pension fund.

Thousands of Hard working miners, Tens of thousands of old retired men and widows of miners killed by the Coal Board have been robbed by New Labour of £4 Billion which was intended for Miners pensions.

The government which has never paid one penny piece into the scheme has grabbed the cash surplus which should have been used to increase the pathetically poor pensions, some as little as £1 per week.

The surplus accumulated from Miners invested funds should have been used to bring in retirement and a full pension at 50 for all miners, working and redundant. It should have been used to make up existing pensions to modern rates, instead New Labour the Pension Fund Scroungers and Fiddlers have taken it .

They attempt to justify the crime by saying, they underwrite the fund ! The richest Pension fund in the world, get f....d off ! The fund has such a range of investments it cannot be in deficit and in any case a portion of the fund in held in reserve each surplus to pay for such a contingency be it ever so remote. The government "underwrites" nothing it is simply a lie.

Some liberal pillocks have requested that the government use the surplus to regenerate the blighted coalfield areas. Well bollocks to that, this is not their money, its the miners money and is intended for pensions not bailing out governments or propping up crumbling pit villages, which by the way ought to be done from the massive taxes already taken from the backs of the miners for generations in taxes and NI contributions. Its a bit like being broken into and having your savings stolen and some fool suggesting perhaps the thief might use some of the stolen money to buy you some new windows !Its not their money !!

The latest MPS circular informs us , that despite protests and suggestions from the MPS Trustees, the government "doesn't think it would be useful" to give us back the money governments have already taken or not to take any more out of this latest surplus. Can anyone think of anything "useful" to do with this government ? Pensioners should not be fobbed off, write to your MP, Tory Blair and Mr Brown and the MPS demanding they stop taking our money and that they refund the money taken so far.

This Government had already continued a nasty legacy of robbing the miners, taking disablement pensions from men crippled with lung diseases and mining injuries, and giving them a poxy £10 a week instead . Robbing the Reduced Earnings Allowance and Hot Meal Provision from men because they had reached 65.

The robbery of the miners suffering chest diseases is a disgraceful story in its own right and is covered elsewhere, it is utterly despicable.

NEW LABOUR, YOU'VE BEEN CAUGHT FIDDLING THE PENSION FUND !

WE DEMAND YOU REPAY THE £4 BILLION YOU'VE NICKED YOU ROBBING B.......’S !

[RobertT]

I've left RM ,would I be wise to transfer my pension now?

No! Assuming you started with RM before April 2008, your pension is linked to your final/average salary and is increasing each year by inflation(CPI). Transferring it to a personal/stakeholder scheme won't give you that same level of security and would probably be one of the worst financial decisions you will ever make.

[hubbahubba]

I've left RM ,would I be wise to transfer my pension now?

No! Assuming you started with RM before April 2008, your pension is linked to your final/average salary and is increasing each year by inflation(CPI). Transferring it to a personal/stakeholder scheme won't give you that same level of security and would probably be one of the worst financial decisions you will ever make.

Would any possible change to the terms of our pensions only apply after the date of any changes?
In other words,are the monies paid in so far safe from any changes down the line?