Royal Mail in threat to axe pension fund

[terrace]

Here are a couple of links trying to explain what Barclay's have done,which Drydon says will be considered
http://business.timesonline.co.uk/tol/b ... 426929.ece" onclick="window.open(this.href);return false;
and
http://business.timesonline.co.uk/tol/b ... 423824.ece" onclick="window.open(this.href);return false;
I think you'll find that any final salary pension accrued before it is axed is ringfenced and will not be affected by a new scheme.But their again I wouldn't trust Royal Mail to keep that promise.

[RobertT]

First things first, don't know where you get the idea that it's free money, we earn every sweat soaked ,wind blown ,dog bitten,management bullied,timed ,computer predicted,sort tested penny
Second ,lets have that 30% in our basic wage ,then see how much the buggers could threaten us with taking away money we have already earned

1)It's free money because under current pension rules an employer doesn't have to pay any money into a pension for it's workers at all!

2)If RM's pension contributions were in our basic wage most people would just spend it and they'd end up working a lot longer than they want to and when they do retire they'll be living on state benefits - current max per week = £130.

3)RM can't afford the 30% they are supposed to be paying anyway,hence this thread.

[RobertT]

I think redundancies are just a short term fix that reduces the wage bill and the amount RM have to pay into the pension scheme.

No you get me wrong as less pay in and ever more will take out is this not the beginning of the end of royalmails pension fund as we know it?.

I thought I was agreeing with you! Should have worded it diferently.

This probably is the beginning of the end of the pension scheme as we know it. A new valuation is being carried out at the moment and the deficit is expected to be as high as £10 Billion and changing to the Careeer Average scheme was supposed to reduce it !!!

[k979aaa]

I think redundancies are just a short term fix that reduces the wage bill and the amount RM have to pay into the pension scheme.

No you get me wrong as less pay in and ever more will take out is this not the beginning of the end of royalmails pension fund as we know it?.

I thought I was agreeing with you! Should have worded it diferently.

This probably is the beginning of the end of the pension scheme as we know it. A new valuation is being carried out at the moment and the deficit is expected to be as high as £10 Billion and changing to the Careeer Average scheme was supposed to reduce it !!!

It is not our fault it was royalmail who took the pension holiday and caused all this!.

[RobertT]

It is not our fault it was royalmail who took the pension holiday and caused all this!.

In the past (not sure of the exact dates) pension schemes weren't allowed to have a surplus of funds - this actually applied to RM. So initially they were forced to take a holiday,but I've never understood how they go from having a surplus to being so far in the red and why they were allowed to take the holiday for so long. Someone along the line hasn't done their job correctly and that someone is the trustee.

[k979aaa]

It is not our fault it was royalmail who took the pension holiday and caused all this!.

In the past (not sure of the exact dates) pension schemes weren't allowed to have a surplus of funds - this actually applied to RM. So initially they were forced to take a holiday,but I've never understood how they go from having a surplus to being so far in the red and why they were allowed to take the holiday for so long. Someone along the line hasn't done their job correctly and that someone is the trustee.

Who appoints the trustee?. Who has the most say?.And did they tell us all what they did?.

[RobertT]

Who appoints the trustee?. Who has the most say?.And did they tell us all what they did?.

This is from cwu.org hope it helps :-


Who is the Trustee?
The Trustee of the Plan is a trustee company, Royal Mail Pensions Trustees Limited. The board of directors of the trustee company comprises eleven trustee directors, of whom one is an independent chair, four are nominated by the Unions, one is elected by the Plan’s pensioners, five are appointed by Royal Mail Group of which two are independent trustees and three are selected from Company management. The trustee company is legally responsible for ensuring that the Plan is run properly and that members’ benefits are safeguarded.

What is the Trustee’s role?
Royal Mail Group decides the level of pension benefits it will offer to its employees, including what level of pension benefits is appropriate for its business. Benefits are set out in a legal document called the Trust Deed and Rules; this governs how the Plan is set up and how benefits are calculated. Amongst other things, the Trustee has a duty to make sure that the Plan is run according to the Trust Deed and Rules and that benefits are paid correctly and on time.

The Trustee is not involved in setting the Group’s pension strategy; however, the Trustee must agree any changes to the Trust Deed and Rules.

[belle smith]

Can anybody clarify what this would actually mean ? If this happened would benefits acrrued to date be safe ? Would there be ANY pension entitlement for new members? Is this suggesting that there will be NO pension fund at all (beyond existing entitlements)?

there would still be a pension fund, but a defined contrabution one instead of a defined benifit scheme. all benefits acrrued to date would be protected by law, don't worry your pension is every bit as sfe as Fred Goodwins!!!

[stodgy88]

is someone who knows what theyre on about going to tell us what this article means to us, and stop the speculation

[RobertT]

is someone who knows what theyre on about going to tell us what this article means to us, and stop the speculation

It means the pension you have built up to the date of any change is safe,but the pension you build up after that date will be calculated differently,resulting in less pension when the time comes.

[belle smith]

It is not our fault it was royalmail who took the pension holiday and caused all this!.

In the past (not sure of the exact dates) pension schemes weren't allowed to have a surplus of funds - this actually applied to RM. So initially they were forced to take a holiday,but I've never understood how they go from having a surplus to being so far in the red and why they were allowed to take the holiday for so long. Someone along the line hasn't done their job correctly and that someone is the trustee.

Who appoints the trustee?. Who has the most say?.And did they tell us all what they did?.

Pension schemes were allowed to have an existing surplus but were not allowed to pay futher contributions to any scheme that was funded by 105% or more without paying taxes on the futher contrabutions.

this was introduced in 1988 by Nigel Lawson in Shedule 22 of the 1988 tax and corporations act.

The pension scheme moved from surplus to deficit as a result of falls in the stock market between 2000 & 2003. The deficit increased in 2004 as they were requierd to calculate deficit on stricter accontance standards (FRS 17) as a result of the 2004 pension act. the reason the scheme moved so far into the red was there was an unusally high level of equities in the portfollio 81%. this was up considrebly from the 65% in 1990 at the begining of the pension holiday. this movment into equities allowed a longer contributions holiday, as equities deliver higher returns but are riskier.

This was because of Royal Mail management not the trustees, who only gained control of investment strategy in 2004 also as a result of the 2004 pension act.

[k979aaa]

It is not our fault it was royalmail who took the pension holiday and caused all this!.

In the past (not sure of the exact dates) pension schemes weren't allowed to have a surplus of funds - this actually applied to RM. So initially they were forced to take a holiday,but I've never understood how they go from having a surplus to being so far in the red and why they were allowed to take the holiday for so long. Someone along the line hasn't done their job correctly and that someone is the trustee.

Who appoints the trustee?. Who has the most say?.And did they tell us all what they did?.

Pension schemes were allowed to have an existing surplus but were not allowed to pay futher contributions to any scheme that was funded by 105% or more without paying taxes on the futher contrabutions.

this was introduced in 1988 by Nigel Lawson in Shedule 22 of the 1988 tax and corporations act.

The pension scheme moved from surplus to deficit as a result of falls in the stock market between 2000 & 2003. The deficit increased in 2004 as they were requierd to calculate deficit on stricter accontance standards (FRS 17) as a result of the 2004 pension act. the reason the scheme moved so far into the red was there was an unusally high level of equities in the portfollio 81%. this was up considrebly from the 65% in 1990 at the begining of the pension holiday. this movment into equities allowed a longer contributions holiday, as equities deliver higher returns but are riskier.

This was because of Royal Mail management not the trustees, who only gained control of investment strategy in 2004 also as a result of the 2004 pension act.

Thank you both your informed info is good and refreshing too all on here but it not the humble postie that is at fault is must be someones can we not name names!.

[k979aaa]

Sorry we can not so don't post any but i think we all know whose fault it all is!.

[heapsy]

Here we go again! The whole thing started way back with the pension holiday that should never have been! What really pisses me off is this, the government are warning people about the dangers of NOT saving for retirement, but are doing just about evrything THEY can to destroy the very pensions that we will all have to rely on. Just for a moment let's think about the state pension only. It works like this, you pay your money over x amount of years. The number of years buys you credits towards YOUR pension. However, the actual money YOU pay, goes to fund someone elses pension, someone who has already retired. As the number of people in employment is dropping, (take a look at manufacturing for example) there are fewer paying in to the pension pot., making it harder for the government, whoever it is, to fund the future state pensions. None of the governments in recent years has had the bottle to make the one and only truely sensible desicision there is. ie start a state pension whereby you pay for YOUR pension in a personal account. They did this in the baltic states (Latvia, Lithuania, and Estonia) after the collapse of the Eastern Block. They don't pay for those already retired, they pay for themselves. The result, an incentive to work because people know that they wont get state aid. Incidently, a recent survey of EU countries showed the above countries to have some of the best state pensions anywhere. THIS has to be the model of the future, otherwise there will be total meltdown.

[RobertT]

I agree,we as a nation need to take more control of our financial futures,although somehow I can't see it happening in the near future! A lot of people seem to think the state will just pay everything for them - those people will be in for a shock when the time comes.

Many people don't think seriously about their retirement until their 50's and that's too late to achieve a decent pension. Obviously many people have mortgages,children,etc to pay for,and that reduces any money available to put towards their future. The way I look at it is,your pension is your wages in retirement and the sooner you take it seriously,the sooner you will be able to retire and the happier and more prosperous your retirement will be.

You go to work so you can afford the things that you want to do in life - your life doesn't end when you give up work!