This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6342031.stm
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Royal Mail in pension plan talks | Royal Mail in pension plan talks |
| (10 minutes later) | |
| Royal Mail has said it is consulting on closing its final salary pension scheme to new entrants, to help tackle its pensions deficit which had hit £6.6bn. | |
| It is also going to look at how it can safeguard the final salary scheme for existing members. | |
| Royal Mail said payments made into the pension fund were hitting profits, which, it revealed, had fallen 86% to £22m for the six months to September. | |
| Losses at the Post Office network had also doubled, it said. | |
| Royal Mail also announced it had agreed a refinancing package involving a government loan of £1.2bn to modernise the business. | |
| Fears | |
| Royal Mail has lost a string of big contracts since the opening up of the postal system last year. | Royal Mail has lost a string of big contracts since the opening up of the postal system last year. |
| [Business customers] should not have to pay for the increased cost of our pensions Adam Crozier, Royal Mail chief executive | [Business customers] should not have to pay for the increased cost of our pensions Adam Crozier, Royal Mail chief executive |
| These include one worth £12m from the Department for Work and Pensions - leading to fears that other government bodies could follow suit. | |
| About 167,000 of Royal Mail's 190,000 workers are currently paying into its pension scheme, while the company itself is trying to plug the gap with payments of £730m a year. | |
| Chief executive Adam Crozier said that these payments were damaging competitiveness, because Royal Mail was having to increase the price of products and services to help cover the cost. | |
| "Around 93% of our mail volumes come from business customers and they should not have to pay for the increased cost of our pensions - and if we ask them to do so, more of them will simply go to the competition," Mr Crozier said. | "Around 93% of our mail volumes come from business customers and they should not have to pay for the increased cost of our pensions - and if we ask them to do so, more of them will simply go to the competition," Mr Crozier said. |
| Phantom shares | |
| A six-month consultation on replacing the final salary pension scheme for new recruits with a defined contributions scheme would now begin, he said, as well as the firm looking at how to keep an affordable final salary scheme for existing staff. | A six-month consultation on replacing the final salary pension scheme for new recruits with a defined contributions scheme would now begin, he said, as well as the firm looking at how to keep an affordable final salary scheme for existing staff. |
| This would "ensure the problem does not get worse for the company or our pension fund members," Mr Crozier added. | This would "ensure the problem does not get worse for the company or our pension fund members," Mr Crozier added. |
| Royal Mail also unveiled plans to give "phantom" shares to its employees - said to be worth £5,300 per worker over five years. | Royal Mail also unveiled plans to give "phantom" shares to its employees - said to be worth £5,300 per worker over five years. |
| In a scheme similar to that at John Lewis Partnership, about a fifth of the value of Royal Mail would be set aside for workers which could see up to £1bn redistributed if the business meets modernisation targets. |