Thursday, May 18, 2006
Postman Pat's Pension
Postman Pat is such a nice chap that it feels wrong to jib at stumping up for his pension fund. Even if the cost of first class stamps has doubled in twenty years. And even if service standards are still "patchy". And even if the head postman gets paid £2.55m pa. And even if some of Pat's thieving colleagues do nick bits of our post.
Today, Alastair Darling has given the Royal Mail another £850m of our money to offset some of that £5.6bn crater in the their pension fund. Darling doesn't say "given" of course. No, he says it's only "the release of £850 million of the Royal Mail Reserve for the company to transfer into a pension escrow account that may be drawn on by the pension trustees in the unlikely event that the company should fail."
First, whatever the technical accounting entries may say, that Reserve belongs to us, the taxpayers: even if it does represent past operating profits, as he claims, we still own the business. So it's "given". Second, no private sector company would be able to offset its pension fund deficit with an escrow account of this kind, and you have to wonder what's really going on: its probably yet another play from the Enron Book of Accounting Wheezes.
As we've blogged before, the reality is that we taxpayers are on the line for all of the public sector's pension liabilities- funded and unfunded alike. Indeed, as we recently discovered, we're even on the line for tens of billions of pension liabilities in companies that were privatised twenty years ago.
Our total liability for public sector pensions is now put at around £1 trillion, or £40,000 for every household in Britain.
I just wonder if Ted Glenn and Mrs Goggins know about all this.
Posted by Mike D at 1:22 pm