Pension proposal:myroyalmail.com

[POSTMAN]

https://www.myroyalmail.com/mrm/appnews ... aspx?i=531" onclick="window.open(this.href);return false;

Gerry Degaute, chief executive of the Royal Mail Pension Plan, answers our questions about the pension deficit and the solution offered by the Postal Services Act…

Q. What is the pension deficit?
A. At the last funding update in March 2010, the pension deficit, calculated on behalf of the Trustee, was £8.4 billion. The deficit is, at any point in time, the difference between the value of the Plan’s assets and an independent estimate of how much money it will need to pay out to cover benefits that members have built up.

Q. Why do we have a deficit?
A. The main reason is people are living longer so the Plan has to pay pensions for longer. Investment conditions have also caused the Plan to be in deficit.

Q. How will the Postal Services Act help?
A. The Act, passed in June last year, proposes transferring responsibility for the Pension Plan’s historic liabilities from Royal Mail to the Government.

Q. So it’s not definite?
A. The Government needs approval from the European Commission because of its rules on State Aid. It has submitted a formal application. The transfer of the historic liabilities counts as State Aid because the Government would be relieving Royal Mail from the need to fund the deficit.

Q. How would the solution work?
A. The benefits that Pension Plan members have built up to an agreed date would be transferred to a new pension scheme, backed by the Government, called the Royal Mail Statutory Pension Scheme.

We expect that the agreed date will be 31 March 2012, although this is subject to European Commission approval. Benefits earned after that date would be built up within the Royal Mail Pension Plan, as they are currently.

Q. How will it affect people?
A. Employee members will have benefits in both the Royal Mail Pension Plan and the new Statutory Pension Scheme. There’s no need for members to take any action.

There may be some changes to information they receive – both scheme names appearing on letters for example – but we are working hard to ensure that the changes are as seamless as possible.

For members already receiving a pension, these benefits will in future be paid by the new Statutory Pension Scheme and there may be a change to the scheme name appearing on their bank/building society statements in the future.

There will be no change to the amount of benefits pensioners receive and they do not need to take any action.

Q. So these proposals are a good solution?
A. We are confident the solution is the right one all round. A significant amount of members’ benefits will be backed by the Government rather than Royal Mail, so they’ll be more secure.

In addition, the solution will not affect the value of benefits members have built up and there’s also protection against any changes to the benefits built up under both schemes.

Q. Where can people go if they have questions?
A. See contact details below. Members have been written to over the last 18 months to keep them up-to-date with progress of the Postal Services Act, and that will continue.

You can call the Pensions Service Centre helpline on 0114 241 4545 (staff) and 0845 603 0043 (pensioners).

Or you can send your questions by email
pensions.helpline@royalmail.com

[TrueBlueTerrier]

It kind of nails it on the head what kind of website myroyalmail is, and its not likely to ever change.

Why is there no mention of the other causes of the deficit which have nothing to do with the Pensioners (us), but that did more than we do living longer.

For instance, what about mentioning the Tax Change rules that McBroon introduced - we were running a surplus before he changed the rules.
What about the 13 year pension holiday that Royal Mail took.
Also what about the poor decisions that must have been made by whoever was responsible for deciding where our fund would invest in the stock market.


At least 2 of these had a bigger impact on the deficit than us living longer does, so why no mention.

[fishtank]

Q. Why do we have a deficit?
A. The main reason is people are living longer so the Plan has to pay pensions for longer.

I've yet to see the study that says posties are living longer....

[Cheetah]

Yes, I see the prolonged pension holiday RM took, some 13 years I believe fails to figure in, as TBT says.
It was not only the missed contributions from RM but the interest which the fund didn't get from what was one of the most lucrative times for investors on the stock markets around the world (i.e Tech boom times) and the interest year on year those missed payments would have made since . I'me quite sure there would be no deficit if they had paid their dues....

[PatthePosty]

what? no reply to this question, in TWO YEARS?

[TrueBlueTerrier]

what? no reply to this question, in TWO YEARS?

What question - please clarify - I know I am not the brightest but I am confused. Help.

[Carp]

Although i've heard this spring up a few times.But,what exactly is a thirteen year royal mail pension holiday?[no daft question is a bad one]

[TrueBlueTerrier]

Although i've heard this spring up a few times.But,what exactly is a thirteen year royal mail pension holiday?[no daft question is a bad one]

Surprisingly the Daily Express explains it better than I can from 1 March 2009

http://www.express.co.uk/posts/view/870 ... sion-break" onclick="window.open(this.href);return false;

THE Royal Mail pension scheme took a 13-year contributions holiday, helping to create today’s £8billion deficit in the fund.

And the move was sanctioned by successive governments.

The pensions holiday, from 1990 to 2003, was revealed in a recent response to a Parliamentary question tabled by
Geraldine Smith, the MP for Morecambe and Lunesdale who instigated the current Labour rebellion against the proposed privatisation of the Royal Mail.

Ms Smith said: “Right up to 2003 there was a pensions holiday sanctioned by successive governments. They allowed the Royal Mail to keep the money and ultimately the taxpayer benefited.”

Ministers now plan to part-privatise the Royal Mail in a bid to tackle the pensions black hole and raise funds for modernising the state-owned firm.

The Royal Mail said the reasons for suspending contributions included changes in tax law that would have seen a big surplus taxed.

But failure to pay into the scheme for so many years means it had less “fat” to protect it once the stock market tumbled, experts say.