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Treasury: Royal Mail £28bn pension assets transfer “not a windfall”

The Treasury insists the transfer of Royal Mail’s pension assets to the Government balance will not be viewed as a windfall by policymakers.

The Government agreed to take on the £28bn assets and £37.5bn liabilities of the pension fund as part of plans to encourage private sector investment in the Royal Mail in June last year.

It followed an independent review of the Royal Mail by Richard Hooper in December 2008 which suggested the historic liabilities of the scheme should be transferred to the state.

If state aid approval is granted by the European Commission the assets and liabilities of the scheme will be transferred to the Government in April this year.

A Treasury spokeswoman says: “This is all about facilitating private sector investment in the Royal Mail. In terms of the public finances, the assets will score to public sector net borrowing so it will appear to be very beneficial to the public finances.

“But we are clear that this is not seen as a windfall for Government. The liabilities are contingent liabilities, so they will not score in our accounts immediately. But we know we are going to have to pay out around £1bn a year.

“In the interests of transparency we will be putting these liabilities into the whole of Government accounts, so they will be visible.”

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