LTB334/16 Post Office: Defined Benefit Pension (DB) Scheme - Update

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LTB334/16 Post Office: Defined Benefit Pension (DB) Scheme - Update

No.334/2016

26th May 2016

POST OFFICE: DEFINED BENEFIT PENSION (DB) SCHEME - UPDATE

Dear Colleagues

Further to LTB 239/16 dated 15th April. The Post Office has confirmed that the formal consultation on its proposal to close the DB pension scheme will end on 31 May 2016. Scheme Members have this week been sent further propaganda from the Post Office via an information pack and video link.

The Surplus in the Scheme - Unsubstantiated Claims from the Post Office

The Post Office by its own admission is “Using a different set of assumptions in 2015 which have less risk but which we think are more suited to a company in Post Office’s financial position”. They have consequently arrived at an estimate of a current surplus in the scheme of around £60m. It is important to note, this estimation or assumption is the view of one of the Post Office’s actuaries, who they are employing (presumably at great expense) to arrive at a different view.

Has the surplus run out? NO

The latest available update on the financial position of the Post Office DB scheme (section of the RMPP) as at 31st December 2015 puts the surplus at £126.3m, on the Trustee’s last valuation basis. The assets were 50% more than the amount the Trustee thinks is needed to pay the benefits. This surplus is currently expected to last beyond 2020 – sufficient to allow accrual to continue on the current employer contribution of 17.1% of pensionable salaries for another 4 years.

Will Members be Worse-Off in Their Retirement? YES – Look at your Personal Projection Letter

Members of the DB pension scheme received a personal projection letter, which tells them how much worse-off they will be in their retirement. We have received numerous emails and messages via social media from members who were outraged after receiving this letter and shocked at the true scale of the proposals on their future income. Members if they haven’t already MUST let the Post Office know what they think about this unsubstantiated attack on their future livelihood and wellbeing.

The consultation does not close until next Tuesday and it is not too late to participate. Branches / Representatives are therefore urged to encourage members to participate in the consultation.

Email: postofficepensions@willistowerswatson.com
Write to: Pension Consultation Feedback, Post Office, HR Service Centre, 120 Bark Street, Bolton, BL1 2AX

Next Steps

We will be submitting a “Body of Evidence” which is in the process of being completed with the assistance of our advisors, First Actuarial. This will be sent to both the Post Office and the Pension Trustee prior to the consultation closing on of 31st May. Further detail in this regard will be provided.

Yours sincerely


Andy Furey
Assistant Secretary