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Postal Services Bill [HL]

My Lords, if I had been quicker into the Chamber for the last one I would have got up and welcomed the Government’s help in changing what was there in the beginning. Amendment 33 deals with senior executive staff. Royal Mail sponsors three occupational pension schemes other than the RMPP. First, there is the Royal Mail Retirement Savings Plan, which is the full name of the defined contributions scheme that was created when RMPP was closed to new employees in April 2008. As a defined contribution scheme, it can never have a deficit. We may have strong views about the decision to close RMPP and to set up a defined contributions scheme for new employees, but there is no need for it to become involved in any restructuring of the Royal Mail. Secondly, there is the Royal Mail Senior Executive Pension Plan. This is a defined benefits scheme. The regulatory impact assessment said that there are no plans to change it, but no explanation is given. My noble friend, Lord McKenzie, said the same thing on 20 April, col. 1281 of Hansard, but did not explain why. The valuation of the senior executive scheme, as at 31 March 2006, showed that it had a deficit of £43 million. It costs £5 million each year to pay off the deficit. The cost of providing the scale of benefits in the senior executive scheme for future service, ignoring any question of the deficit, is 48.2 per cent of pensionable pay. I ask the Minister, why is it being treated differently from the RMPP? Its deficit is also a millstone around the neck of Royal Mail, and it ought to be dealt with in the same way. My amendment would mean that if a new public sector scheme is created under Clause 16, the qualifying accrued rights of the senior executive scheme will be transferred to it, just like the RMPP. If there is to be no new public sector scheme, and instead the qualifying accrued rights of the RMPP are transferred to a new government-sponsored section of the RMPP under Clause 17, the past service deficit of the senior executive scheme will be transferred into the new government section, just like the deficit in the RMPP. Administrative savings could be made if the schemes were amalgamated so that the assets and liabilities of the senior executive scheme were transferred into the RMPP. There would be one fewer firm of actuaries, one fewer firm of solicitors and accountants, all of which cost money, and it would be much more sensible to be under one scheme. More importantly, it would also be seen as fairer to the ordinary members of the RMPP if the senior executives were earning their pensions on the same scale as the ordinary members. I beg to move.