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Royal Mail trustees 'agnostic' about part-privatisation

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  • Royal Mail trustees 'agnostic' about part-privatisation

UK - Trustees of the Royal Mail Pension Scheme have written to all 450,000 members to confirm it "has no position" on government plans for the part-privatisation of Royal Mail.

The letter from Jane Newell, chair of the Royal Mail pension trustee board, told members that suggestions the trustee board supports part-privatisation is untrue, as the trustee "has no political agenda, it has no position, ideological or otherwise, for or against matters such as the change in regulator and public versus private ownership, etc". 

In the letter, Newell also reassured members that pensions in payment would not be "suddenly cut back" and rejected reports that benefits will be cut by 50%, adding this is only "what could happen in the extremely unlikely event that Royal Mail ever had to be wound up".

It follows an earlier letter from Newell to Lord Mandelson, secretary of state for business and enterprise (BERR), in February in which she warned if the recommendations of the Hooper Report - a review of the postal system - were not implemented "the consequences could be very severe indeed for the Royal Mail Pension Plan and for Royal Mail itself".  (See earlier IPE article: Royal Mail trustees back Hooper measures)

The Hooper Report's three packages of recommendations included the government taking responsibility for the pension deficit, estimated at £5.9bn (€6.36bn) in December 2008, but also recommended finding investment through a "strategic partner", a move which has angered trade unions. (See earlier IPE article: Royal Mail pension may become new public scheme)

Newell's earlier letter, released ahead of the second reading of the Postal Services Bill in Parliament, had been used to suggest trustee support of all of Hooper's measures yet according to trade unions apparently the board had not all agreed to the letter and some did not know it existed. 

In the latest letter, agreed by all trustees, Newell told members "the very significant deficit in the plan has to be addressed. The pension aspects of the Hooper Report, subject to satisfactory government guarantees, do this - that is what the trustee supports".

She emphasised the trustee is "focused entirely" on securing and protecting member benefits and highlighted its key concern "is the strengthening of the covenant and the financial strength of the plan sponsor. The trustee is agnostic about how this may be achieved".

Billy Hayes, general secretary of the Communication Workers Union (CWU), said: "The chair should never have written or sent her letter in February which, as is now clear for all to see, is not the position of the board. This calls into question her ability and authority as chair of the scheme."

"We welcome the trustees' new statement which rightly confirms they have no political agenda and neither support nor reject privatisation."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com
 

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