The Post Office pension fund is running dangerously low and may collapse.
Letter from Jane Newell, Chairman, Royal Mail Pensions Trustees to Business Secretary Lord Mandelson:
Further to our meeting of 13th February, perhaps I could confirm the Trustee's views in respect of the Hooper Report, in so far as it affects the Royal Mail Pension Plan.
Let me reiterate the Trustee's position. The Trustee has a fiduciary duty to protect the benefits of the 450,000 members of the Royal Mail Pension Plan. The Trustee's prime concerns, therefore, are security of members' benefits and the strength of the covenant of the plan sponsor.
As you know, Royal Mail's position is weak in respect of its covenant and there is a significant pension fund deficit, which is a long-term drain on the company's cash. Royal Mail is already balance sheet insolvent.
If the recommendations of the Hooper Report were not implemented, the consequences could be very severe indeed for the Royal Mail Pension Plan and for Royal Mail itself.
In particular, in light of the weakness of Royal Mail, the Trustee would consider it necessary to seek to significantly strengthen the funding basis for the 2009 actuarial valuation.
On a self-sufficient basis this would value the liabilities far higher, resulting in a deficit that would be significantly larger than the £5.9bn quoted in the Hooper Review, which is on the existing ongoing basis. The law gives the Trustee and Royal Mail until 30 June 2010 to agree this valuation.
Whatever its precise amount, the deficit resulting from a strengthened funding basis for the 2009 valuation is highly unlikely to be affordable by Royal Mail, with potentially devastating consequences.
If this were the case, the Plan's financial resources would not be sufficient to provide the full value of benefits, which would need to be very significantly reduced.
At present, in a winding-up the Plan would not even be able to provide as much as 50% of members' benefits.
In theory the Pension Protection Fund would act as a safety net for members, but I would not like to speculate on its ability in practice to absorb the Plan without putting an intolerable levy strain on remaining UK pension schemes.
Consequently, the Trustee of the Royal Mail Pension Plan, subject to obtaining satisfactory guarantees from Government, is in favour of the Hooper Report's recommendations.
We very much look forward to these being implemented, as soon as possible, for
the benefit of all concerned.
Got that? 450,000 people who generally knock off at 1pm and spend the rest of the day down the pub are not going to get 72 virgins when they retire, as promised by the Unions/Zanu
So now we see Mandy desperate to pump billions into the “vote Labour” fund at OUR expense. Of course he’s going to flog off whatever he can to plug the leaks. He can’t risk half a million pissed up street walkers getting angry can he? The fact that it’ll cost you and me yet more billions is irrelevant .
Let’s break down some figures for a laugh.
Firstly, as it stands, the employees would be lucky to get half of the promised virgins. 2006 figures put the deficit at £5.9 Billion and that has grown considerably. No one actually knows by how much. The Post Office made a profit of £255M last year but is committed to paying in £284M for the next 15 years just to try and catch up the deficit. Opps.
At present, every man woman and child in the UK is going to have to find £983 just to fund the pension fund of Postman Pat. £983 each to make sure that 450,000 keep voting labour.
I suspect the Post Office is the tip of a fucking enormous iceberg that Captain Gordon of the Titanic hasn’t even spotted yet.
(Public Sector Pensions to cost £1 TRILLION, currently 80% undervalued).
I can’t wait to see the faces of 7 million public sector drones when they realise there ain’t no money in the pot after all. I predict a riot.