Consignia facing £800M pension shortfall
POST Office operator Consignia could face a pension fund shortfall of £800m if it presses ahead with plans to cut 30,000 jobs, it has been claimed.
The company, currently losing more than £1m per day, may have to pump a further £600m into its funds this year to make up a financial black hole. The claims, which have been dismissed as “alarmist” by Consignia, are detailed in a 50-page document by accountant Arthur Andersen.
They are buried in its report for regulator Postcomm on the financial impact of opening up the postal market to competition on Consignia. It said the company’s plans to slash £1.2bn from costs would likely mean it having to make additional contributions to its pension funds.
While admitting these could be zero, Andersen says the contributions may spiral to £800m as laid-off workers decide to take early retirement.
It added, “In the absence of further information, we have assumed addiPRINTING companies in Caerphilly are securing new orders on the back of a tendering support scheme.
The Tenders Alert Service scheme offers information on all tender opportunities in the printing sector in the UK and Europe.
Eleven companies have been using the scheme over the past year as part of a pilot initiative, but will now be able to continue using it thanks to the backing of Caerphilly Business Forum.
Of the 11 printing companies, within the Caerphilly cluster taking part in the scheme, they include Meridian Design and Print Services, Pensord Press, Aurora Colors, Bayliss Walters Associates, Masterfoil, Billy Board Marketing, Tower Print, Colin Robinsons Printers, CPS and McNaughtons Paper Group.
Darren Pole, of Tower Print, said the company has secured new contracts worth £48,500 through the scheme.
tional contributions of £600m in financial year 02-03 in our base case analysis.”
Such a contribution would be a hammer blow to Consignia, given its current high costs.
The claims were, however, rejected as speculation by the company, which is set to rubber stamp exactly how many jobs it needs to cut in the coming weeks. A spokesman said the company lost 20,000 jobs a year through natural wastage and the majority of any cuts would hopefully be taken up in this way.
