UPDATE ON ROYAL MAIL'S 2018 PENSION REVIEW

[idpickering]

"Royal Mail plc (RMG.L) is today providing an update on its 2018 Pension Review in respect of the future of the Royal Mail Pension Plan (the Plan).

The member-wide consultation phase ended on 10 March 2017. Royal Mail has reviewed the consultation feedback received from members and its unions, the Communication Workers Union (CWU) and Unite/CMA. This includes a proposal put forward by the CWU. Sustainability, affordability and security are the principles the Company employed when reviewing the consultation feedback.

The Plan is currently in surplus but we expect the surplus will run out in 2018. The Company's annual pension contributions are currently around £400 million. If no changes are made, the contributions could more than double to over £1 billion in 2018. We have concluded that there is no affordable solution to keeping the Plan open in its current form. Therefore, the Company has come to the decision that the Plan will close to future accrual on 31 March 2018, subject to Trustee approval"

Full item here;

http://www.investegate.co.uk/royal-mail ... 00083896C/

One of mine, so impressed with the 1.5% rise in SP on a down day thus far in the general market.

Ian.

[monabri]

Not a good day for Pat though!

It will be 'interesting' to see how this pans out. I can see postie downing delivery sacks on this one.

I hold Royal Mail Group (they'll be dropping the "Royal" next!). Will this be a long term buying opportunity to add to a HYP or as a top up?

[monabri]

"Defined Benefit Scheme of the Year"

well, that's what is says on it's website !

http://www.royalmailpensionplan.co.uk/

they might want to rethink that?

[idpickering]

Will this be a long term buying opportunity to add to a HYP or as a top up?

I tend to try to ignore the SP of my holdings, if humanly possible lol? But I can say that it is my intention to top up my RMG holdings soon. My initial purchase was on 22 Oct 2015 @ 445p, and I've topped up twice since. I am down with regards to capital returns with them though. Not that that matters.

Ian.

[monabri]

The Royal Mail Group has ~160,000 employees. According to the papers, the pension proposals will affect ~90,000 employees.

Of the 90k employees, how many will be in the union and will be voting on industrial action?

There is the possibility that perhaps half the workforce will be in favour (vote for) of industrial action and the other half will not.

So, in the meantime the tabloids will stir it up. This might present a good top up opportunity for HYPers. I would sit tight for the moment.

[mao44]

I work part time for RMG and union membership is apparently 95%.

[monabri]

The Royal Mail Defined Benefit Pension scheme seems to be in surplus by ~200% (assets/liabilities) ! Where is the justification in stopping the scheme ?

[link below - courtesy of 77ss - see the posting on Phoenix Group Pension Fund)

https://www.jltemployeebenefits.com/~/m ... f?la=en-gb

Is there really a need to do this to our posties? (and, yes, I do hold shares in RMG).

[Dod1010]

The Royal Mail Defined Benefit Pension scheme seems to be in surplus by ~200% (assets/liabilities) ! Where is the justification in stopping the scheme ?

Well they say in their announcement that the surplus will disappear by 2018 and the annual contributions will need to increase to £1 billion per annum from the current £400 million. In other words, like most other final salary schemes, it is just becoming too expensive to maintain.

Dod

[monabri]

The pension assets being £7374 Million versus £3815 Million liabilities.

A surplus of ~£3.6 Billion will vanish in 1 year? (actually, they will be expending nearer £4 billion if they were to also count the £400M per year contribution) - are they thinking of laying a load of people off on early retirement?

If the calculations previously indicated that they were ~200% fully funded versus pension liabilities (long term) - the method of calculation of liabilities must have changed dramatically or the benefits have substantially increased (doubtful) or possibly (forced) early retirement is on the cards?


ps no, I'm not a postie!