Royal Mail boss stamping down on pension hopes

[POSTMAN]

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Royal Mail boss Moya Greene today brushed off hopes that the UK’s buoyant bond yields will rescue the FTSE 100 firm’s teetering pension scheme, saying the cash needed was “still simply unaffordable”.

The Canadian added she is still hoping to avoid strikes, despite a threat from the Communication Workers Union, which represents most of Royal Mail’s 140,000 staff.

The 500-year-old postal giant has warned its defined-benefit pension scheme is facing closure as the costs to maintain it are set to more than double by 2018.

Despite stronger bond yields providing a boost, Greene hit back: “the cash contribution required is just so huge that whether it’s £1.4 billion or £1.25 billion a year doesn’t make that much difference. It’s simply unaffordable.” She added: “We’re having productive, cordial discussions with our unions. Strikes don’t help anybody.”

Pension charges meant half-year, pre-tax profit fell 5% to £110 million.

Although underlying revenues for the six months to October grew 1% to £4.6 billion, that was thanks entirely to growth at its European parcels arm as Royal Mail’s central UK mail business declined by 1%.

The number of letters in posties’ sacks fell 4%. The shares lost 4%, or 20.8p, to 478.1p.

The company hopes to cut costs by £600 million a year, up from a previous target of £500 million. Ahead of Christmas, it has hired an extra 19,000 staff to help with the rush, the same number as last year.

[fly-catchers]

Bet Moya's pension is safe...

[jetblack]

Analysts are saying that the US is likely to face inflationary pressures in the light of Trumps proposed infrastructure spending - this in turn will lead to higher interest rates in the US. The UK, as sure as night follows day, will follow.

QE and 0% interest rates can not continue forever - and there seems to be a growing awareness that it is an unacceptable political/economic policy choice hurting millions of people.

So yes Moya - it definitely will be affordable again in the near future. I know the institutional shareholders would have us believe otherwise - but they, and you, are talking out of your Royal arses.

[k979aaa]

More Canadian bacon anyone more overdone than anything before burnt to a crisp just like the postal workers in good old Canada by her for herself yet again best not let this her f**k us over like she did with them!

[Surreypostie]

I agree with Moya, strikes don't help anybody. However, they are not supposed to be helpful.