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Govt to take on £37.5bn Royal Mail pension liabilities

The assets and liabilities of Royal Mail’s pension fund will be transferred to the Government next month, according to reports.

Subject to EU approval, the Government will take on £28bn of assets in the deal which would provide a quick windfall for the Government coffers. But it will also take on £37.5bn of liabilities which will only show up in the Government’s books over the next 20 or 30 years.

The move is seen as a step towards privatisation of the service.

According to the BBC, the pension liabilities are treated similarly to the unfunded pension schemes of the National Health Service or armed forces, and are not considered an immediate Government debt for accounting purposes.

The European Commission is considering whether the move would break state aid rules and is expected to announce a decision this week.

The transfer has been backed by the Communication Workers Union.

The Institute of Economic Affairs says the move is dangerous and short-sighted. Editorial director Philip Booth says: “The assets will be used immediately to reduce the Government’s debt whilst the liabilities – made up of future pensions to workers – will no longer be funded and will have to be met by future generations of taxpayers.”


Towry non-exec chairman Glyn Jones quits

Towry non-executive chairman Glyn Jones has left the firm after more than five years in the role. Jones, who was appointed in November 2006, will be replaced by non-executive director Gerald Corbett. In October, Towry head of risk and compliance Nick Anderson quit after 13 years at the firm. Towry chief executive Andrew Fisher says: […]


NAPF says pension funds will not go for 100-year bonds

The National Association of Pension Funds says the Government’s proposal to launch 100- year bonds is unlikely to be of interest to pension funds, which tend to prefer 30 to 50-year index-linked debt. Last week, the Treasury floated the idea of issuing “superlong gilts” which would enable the Government to borrow money over the long […]


Large AR firm quits Openwork over costs

Blueprint, one of Openwork’s largest ARs, is quitting the network after the firms failed to agree an ongoing cost structure. Blueprint has around 85 advisers, making it one of Openwork’s biggest firms. Openwork proposition and marketing director Philip Martin says: “It has become clear from numerous contract negotiations with Blueprint that our relationship has resulted […]


FSA’s conduct of business unit costs increase by 25 per cent

The budget for the FSA’s conduct of business unit is set to rise by 25 per cent from £147.6m in 2011/12 to £183.3m in 2012/13 as the regulator prepares for the introduction of the twin peaks regulatory model. From early next year, the FSA’s conduct of business unit will become the Financial Conduct Authority and […]


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