Jane Newell, chairman of the Royal Mail pension trustees, admitted that the company is 'effectively bust' and cannot afford to plug the black hole in its pension fund,which is between £6bn-£9bn depending on what you read.In a letter to the Business Secretary Lord Mandelson, she warned of 'potentially devastating consequences' for the 450,000 Royal Mail pension holders if the Government does not bail out Royal Mail.Even winding-up the Plan it would not even be able to provide as much as 50 per cent of members benefits.
Mrs Newell warned that the Government must press ahead with recommendations made by the independent Hooper report.
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