Royal Mail's £3bn pension aid
The government has agreed to give Royal Mail a package worth £3 billion to help tackle its pension fund deficit, according to reports.
The postal service, which employees 180,000 workers through the Post Office and Parcelforce Worldwide delivery operations, currently has a £5.5 billion pension deficit.
Trade and industry secretary Alistair Darling said the government would provide a £900 million loan to help Royal Mail improve its business and it would also release £850 million of Royal Mail's previously restricted funds to be invested into the pension fund.
"This financing framework will give Royal Mail the right basis from which to take forward an ambitious modernisation programme, helping to deliver a world class service," Mr Darling said.
The decision came as the postal service announced a surge in profits - a boost of 17.5 per cent to £355 million last year - which will result in workers across the country being offered a £418 bonus payment.
Despite criticism from rival companies that the government was 'bailing out' the service, the Communication Workers Union said both the government and Royal Mail have a moral obligation to fund the pension deficit.
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