Royal Mail pension deficit is an estimated £6bn

[TrueBlueTerrier]

http://www.qrops.net/royal-mail-pension ... mated-6bn/" onclick="window.open(this.href);return false;

The latest news about the Royal Mail’s pension scheme may be a news the trustees do not want to hear.

Royal Mail’s annual accounts have revealed a black hole of 6 billion pounds in its pension funding. Despite some significant action taken by Royal Mail bosses to plug the gap in the scheme in the past including cash injections and funding commitments, the firm’s accountants have still arrived at this spectacular figure.
In fact, when the official actuaries’ (three yearly) valuation of the scheme is published in the next couple of months, the deficit is expected to be even bigger.
Some commentators report that the deficit may even be as large as £10 billion.

Like most final salary pension schemes, this one has been closed to new members for a while. It has also been partially replaced with a “career average” scheme which typically entitles members to a lower pension than they would have received under the final salary arrangement. In a further step to curb the deficit, the Royal Mail also raised its retirement age to 65 a couple of years ago.

The accounts show that Royal Mail paid in £867 million into the scheme during its last financial year. Whilst a large sum, this amount seems like a drop in the ocean compared to the huge deficit.

Yesterday the coalition government announced plans for the partial privatisation of Royal Mail, but the business is not an attractive proposition for outside investors given this enormous deficit. Some commentators have said that the pension deficit even threatens the viability of the business itself.
Given that Royal Mail has a legal obligation to close its pension funding gap, no doubt the government will be looking at alternative ways to fund the scheme. Will taxpayer’s money be poured into the scheme?

If the deficit continues to grow in this manner, there may be no alternative, no matter how unpalatable that may seem to a cash strapped Treasury.

[chunk]

What offends me the most is the newspaper or politician spin put on this.
The organization is not viable so it needs a public hand out!
Royal Mail has been profitable for 300 years and still is.
employees have paid their lifetimes worth of contributions into in the pension scheme.
the reason it needs government money now is because the government helped itself in the past
by raiding the pension pots of its own workers.
we were daylight robbed and yet for the government to replace what they have taken is portrayed as a handout.
it adds insult to injury when they also try to portray us as their lame duck.
when we have always been their cash cow.

[Spedley]

http://www.qrops.net/royal-mail-pension ... mated-6bn/
The accounts show that Royal Mail paid in £867 million into the scheme during its last financial year. Whilst a large sum, this amount seems like a drop in the ocean compared to the huge deficit.

I'd call £867 million 14.5%. Not really a drop in the ocean is it.

Also, I thought it was about £13 billion so it's all good news to me.

[Chopstix]

quite a big amount

[belle smith]

Royal Mail’s annual accounts have revealed a black hole of 6 billion pounds in its pension funding.........
Some commentators report that the deficit may even be as large as £10 billion.

It's probably both. £6 billion or there abouts using SSAP24 accountancey standard.
and £10 billion using FRS17 accountancey standard.