Pension fund trustees 'could sink Royal Mail'

Post by **TrueBlueTerrier** » 25 Mar 2008, 13:38

http://business.timesonline.co.uk/tol/b ... 613500.ece

Christine Buckley, Industrial Editor

Royal Mail fears that its finances are so bad that its pension fund trustees could put it into liquidation to pay off a Â£3.4 billion deficit.

The postal group has told unions in private that it is possible that the trustees could be legally obliged to demand that Royal Mail be wound up to pay the bill.

Executives are painting a bleak picture of Royal Mail's health, at a time when the company is embroiled in a row with unions over its plan to close its final-salary pension scheme, raise the retirement age from 60 to 65 and cut its contributions.

Unions have also been told that Royal Mail's profits for 2010-11 could be as low as Â£50million if present conditions continue. Executives say that the letters business has declined, with volumes dropping in competition with e-mails, internet advertising, other operators and customers trading down for services.

That is short of the amount envisaged a few years ago when Allan Leighton, the chairman, was trying a partial privatisation of the business by bringing in outside investment and giving the workforce a stake. He had predicted that the business would be worth Â£4 billion in that financial year.

Royal Mail's trustees, who meet on Thursday, are expected to back the proposed changes to the pension scheme from April 1, under which the business will cut its contributions from 30 per cent to 21 per cent, comprising 10 per cent for the deficit and 11 per cent for future pensions. At present the total annual cash contribution is Â£850 million.

However, the threats have yet to have any impact on employees. Postal managers have voted already by 85 per cent to oppose the changes in a consultative ballot and more than 150,000 postal workers are in the process of voting. It is expected that postal workers will reject the pension changes in a ballot that is due to close the day before the trustees' meeting. With unions and management seemingly at a stand-off, postal services are likely to be crippled by industrial action again, only months after the last wave of national strikes over pay ended.

Royal Mail has twice delayed the usual reporting of its financial figures. The latest figures published relate to the year ending in March last year and they show a profit fall of 34 per cent to Â£233 million. Since then the business has been hit by the worst industrial action in decades.

Paul Reuter, national official with Unite, the union that represents postal managers, said: â€œThe unions actually want this business to be managed. We are very concerned about the state of it. We don't think that Royal Mail has the capacity or the will to work in a competitive environment.â€

BELIAL · Post by **BELIAL** » 25 Mar 2008, 14:11

Could'nt really give a monkeys what RM executives fears are.They don't seem to be able to run the service day to day so I'm hardly going to set much store by their abstract fears for what the future might hold,silly sods forget xmas every year for christssake.
Tis encouraging that they've gone so far over the top in their attempted scare tactics, must be really worried about something

Big Daz · Post by **Big Daz** » 25 Mar 2008, 14:20

Has PR of CMA/UNITE been reading this site?

Laural and Hardy seemsa very familar term for Al and Adam!!!!!!!!!!

Post by **TrueBlueTerrier** » 25 Mar 2008, 14:23

Save themselves a small fortune if they stopped sending out the scourier.

jemima · Post by **jemima** » 25 Mar 2008, 14:25

I looked at the pension fund investments and I don't think it's quite that bad. There's no denying that there's a problem, though.

We (and, presumably the government) were being told until recently that RM pensions were secure and that there was no need to change the pension scheme. Adam and Allan weren't doing their jobs properly. If they had made even a rudimentary inspection of the pension fund they would have seen the scale of the deficit. Talk about negligence and dereliction of duty....

DGP1 · Post by **DGP1** » 25 Mar 2008, 14:41

The story is only put out to scare the unions into not rocking the boat. Royal Mail going under would be a bigger disaster than Northern Rock (how about 180000 people suddenly on the dole? Does anyone really believe the government would allow it to happen??)

Post by **TrueBlueTerrier** » 25 Mar 2008, 14:43

disgruntledpostie1 wrote:How about 180000 people suddenly on the dole? Does anyone really believe the government would allow it to happen

Would be a good topic for a what if thread

DGP1 · Post by **DGP1** » 25 Mar 2008, 14:51

Plus who'd deliver all the mail?? The DSA companies won't do it because it'll cost too much (maybe only the large towns/cities but no USO) and if they can't get their product delivered they wouldn't be able to take the work then it would have to end up back with a government service designed to deliver the post to every address in the UK just like it is now (oh hell!!!! now I've really confused myself)

norbert · Post by **norbert** » 25 Mar 2008, 14:55

BELIAL wrote:Could'nt really give a monkeys what RM executives fears are.They don't seem to be able to run the service day to day so I'm hardly going to set much store by their abstract fears for what the future might hold,silly sods forget xmas every year for christssake.
Tis encouraging that they've gone so far over the top in their attempted scare tactics, must be really worried about something

RM are known for "creative accounting " and lot's of hype and spin from our beloved Laurel & Hardy . They've been aware of a potential problem for a while but haven't been inclined to deal with it , translate Leighton speak -"The legacy from the past ",

I believe the Police found a large bomb outside RM HQ 148, Old Street , they told the Public not to worry as they have now managed to push it inside.

Darren Bent · Post by **Darren Bent** » 25 Mar 2008, 16:11

It is probably scare stories to make us accept their offer/plans for pension. There might be a problem, but it could be overreacting as we doesn't know what will happens in 10 years time.

sevenandseven · Post by **sevenandseven** » 25 Mar 2008, 16:27

I think it is an insult to compare AL and AC to Laurel and Hardy. Stan and Ollie were both very intelligent and knew what they were doing in deliberately making people laugh. Whereas AL and AC are ------ Oh, fill in your own opinion. Just leave Stan and Ollie out of it.

k979aaa · Post by **k979aaa** » 25 Mar 2008, 16:42

sevenandseven wrote:I think it is an insult to compare AL and AC to Laurel and Hardy. Stan and Ollie were both very intelligent and knew what they were doing in deliberately making people laugh. Whereas AL and AC are ------ Oh, fill in your own opinion. Just leave Stan and Ollie out of it.

But oh what a fine mess they have gotten us into this time :cfo & :lfo

BELIAL · Post by **BELIAL** » 25 Mar 2008, 16:46

k979aaa wrote:
sevenandseven wrote:I think it is an insult to compare AL and AC to Laurel and Hardy. Stan and Ollie were both very intelligent and knew what they were doing in deliberately making people laugh. Whereas AL and AC are ------ Oh, fill in your own opinion. Just leave Stan and Ollie out of it.
But oh what a fine mess they have gotten us into this time :cfo & :lfo

pinstripe · Post by **pinstripe** » 25 Mar 2008, 17:08

jemima wrote:I looked at the pension fund investments and I don't think it's quite that bad. There's no denying that there's a problem, though.

We (and, presumably the government) were being told until recently that RM pensions were secure and that there was no need to change the pension scheme. Adam and Allan weren't doing their jobs properly. If they had made even a rudimentary inspection of the pension fund they would have seen the scale of the deficit. Talk about negligence and dereliction of duty....

And if we have any degree of negligence what happens? Do we get a huge bonus and a pat on the back? Guess not.

Darren Bent · Post by **Darren Bent** » 25 Mar 2008, 17:28

How likely Royal Mail to be closed down / sold off / or lose lot of post delivery person and when it might happens ?

ROYALMAILCHAT

Pension fund trustees 'could sink Royal Mail'

Pension fund trustees 'could sink Royal Mail'

Permanent Crisis Mode