This money has actually derived from our pensions contributions but is held separate to the Pension Plan
No it wasn't.
It was set up as a separate escrow account, you can't just remove contributions from a pension fund.
That money won't now be there if there are any future emergencies.
The company is liable for any "emergencies".
Pension fund trustees were probably very unwilling to release this escrow money
Probably?
You're just guessing now.
The company did set up a separate escrow account to help shore up the pension scheme. However, I'm absolutely convinced some or even all of our money has derived from our pension contributions because the trustees and pension regulator would only sign off this sum if it applied to all grades which the pension scheme covered. That is why managers are also getting the £900 lump sum. It doesn't cover senior managers.
The fact is the money has been in this escrow account since 2017. If the business was really struggling, why hasn't it just taken this money and put it towards offsetting the negative financial statement this year? I'll tell you why. The Union has been asking for this money as part of the deal to give to its members. However, it is on the expectation that Royal Mail will make decent profits in the years to come which this deal helps to provide by reducing our terms and cons. I am 100% certain about that we will only get the lump sum on the 29th September once the deal has been ratified.
On the face of it, shareholder value is the dumbest idea in the world.
Everyone on here repeatedly honking on about "protect our terms and conditions for future staff" don't seem to have noticed that every few months for the past decade, people have started on worse contracts .
In my DO everyone who started in the last 4 years has to work 1/3 Sundays, newer members have to accept being told to go to a different DO, or have their hours moved to suit RM (3 of us are now on 1pm-7pm on the 30 hour contracts, every other week.)
What you think you're fighting for you let go without a fight years before this dispute even started
It's not money from the pension.
How many times does this need explained?
Oh wait there are still people who think we get paid for D2D so the answer is probably at least for the next 15 years.
Not pension money.
Nothing to do with contributions.
Royal Mail's money.
Probably would have been spent on something completely useless at some point in the future like electric unicycles or a vest to fit your D2D into or some wacko Japanese continous improvement program.
Genuinely I would rather some of it went to members even if managers get it than see it spaffed up the wall on some uni grad's next great idea.
This money has actually derived from our pensions contributions but is held separate to the Pension Plan in an escrow to shore up the pension scheme if it was ever in trouble. That money won't now be there if there are any future emergencies. And these could be emergencies that are totally unrelated to the company's performance. Do you remember chancellor Kwasi Kwarteng's mini budget last year that sent the market tanking? Well, IDS was reported to have rushed forward its payment into the pension scheme to help prevent a cash crunch.
Pension fund trustees were probably very unwilling to release this escrow money (valued at £196 million in March 2023) unless they fully expect Royal Mail to be profitable in the next two years on the back of profits made via this deal. Trustees always monitor the resilience of their investments, have good solid risk management practices and will have funding arrangements in place so it wouldn't surprise me that this money will need to be paid back sometime particularly as the Royal Mail pension scheme covers 124,000 members with liabilities of around £11 billion.
What they are definitely not going to allow Royal Mail to use this money on is electric unicycles or to be spaffed up the wall!!
If the fund is £11B then it's very unlikely they'll miss the odd £200m any time soon, as that's less than 2% of the present fund value, the fund probably fluctuates by that on a weekly basis.
As I understood it, it was money RM put aside in case of difficulty in the pension fund so was the firms money not money people paid in.
Happy to be proved wrong though.
But the pension fund was in difficulty in October. Exactly the reason this money should not be used as a bribe to get a pay deal through.
This money has actually derived from our pensions contributions but is held separate to the Pension Plan in an escrow to shore up the pension scheme if it was ever in trouble. That money won't now be there if there are any future emergencies. And these could be emergencies that are totally unrelated to the company's performance. Do you remember chancellor Kwasi Kwarteng's mini budget last year that sent the market tanking? Well, IDS was reported to have rushed forward its payment into the pension scheme to help prevent a cash crunch.
Pension fund trustees were probably very unwilling to release this escrow money (valued at £196 million in March 2023) unless they fully expect Royal Mail to be profitable in the next two years on the back of profits made via this deal. Trustees always monitor the resilience of their investments, have good solid risk management practices and will have funding arrangements in place so it wouldn't surprise me that this money will need to be paid back sometime particularly as the Royal Mail pension scheme covers 124,000 members with liabilities of around £11 billion.
What they are definitely not going to allow Royal Mail to use this money on is electric unicycles or to be spaffed up the wall!!
Not disagreeing with your comments re the intended use of the surplus but as Woody has said the money was RM's,
actually from RM employer contributions not our pension contributions, see RM Annual Report 2017-2018:
2018 Pensions Review
.....................
An agreement has been made with the Pension Trustee to ringfence certain employer contributions in an escrow arrangement in order to give the Trustee and the Company more flexibility over how these assets are best used for the benefit of members in future.
This money has actually derived from our pensions contributions but is held separate to the Pension Plan in an escrow to shore up the pension scheme if it was ever in trouble. That money won't now be there if there are any future emergencies. And these could be emergencies that are totally unrelated to the company's performance. Do you remember chancellor Kwasi Kwarteng's mini budget last year that sent the market tanking? Well, IDS was reported to have rushed forward its payment into the pension scheme to help prevent a cash crunch.
Pension fund trustees were probably very unwilling to release this escrow money (valued at £196 million in March 2023) unless they fully expect Royal Mail to be profitable in the next two years on the back of profits made via this deal. Trustees always monitor the resilience of their investments, have good solid risk management practices and will have funding arrangements in place so it wouldn't surprise me that this money will need to be paid back sometime particularly as the Royal Mail pension scheme covers 124,000 members with liabilities of around £11 billion.
What they are definitely not going to allow Royal Mail to use this money on is electric unicycles or to be spaffed up the wall!!
Not disagreeing with your comments re the intended use of the surplus but as Woody has said the money was RM's,
actually from RM employer contributions not our pension contributions, see RM Annual Report 2017-2018:
2018 Pensions Review
.....................
An agreement has been made with the Pension Trustee to ringfence certain employer contributions in an escrow arrangement in order to give the Trustee and the Company more flexibility over how these assets are best used for the benefit of members in future.
From the 2018 pension review, so the money is in some way connected to RM pension?
What is a fact is that Royal Mail are legally obliged to fully fund the DB pension so the escrow as an emergency funding measure would only be of any use if the company went bust.
Even then with a large pension fund the escrow account would be a sticking plaster solution in any major pension crisis. It's not a large amount of money in pension fund terms.
What is a fact is that Royal Mail are legally obliged to fully fund the DB pension so the escrow as an emergency funding measure would only be of any use if the company went bust.
Even then with a large pension fund the escrow account would be a sticking plaster solution in any major pension crisis. It's not a large amount of money in pension fund terms.
I'm not going to disagree with you that it does appear like a small amount relatively to overall pension fund but the pension escrow was set up for a good reason and they are determined that this money won't be paid out until the end of September when the deal is ratified. There must be a good reason for this.
We can look to how the company dealt with the pension deficit before privatisation when Royal Mail had a massive issue with the defined benefit pension scheme. They took huge risks with our pension fund when it channelled over £5 billion of it to place bets on the stock market. This was hidden from all of us and there was no mention of the potential liability from its annual report and accounts. That was before the company was eventually sold off and ended up with future taxpayers being liable for the pension scheme's liabilities.
On the face of it, shareholder value is the dumbest idea in the world.
