What has the union ever done for me !!

[wdo1256]

I hear this often

Two years ago RM wanted to change all our pensions to one where we take all the risk. If this was the case look at what would of happened.

Jan 1st the FT top 100 shares were worth 7,604 yesterday the same shares were worth 5,366, That is around a 30% drop in value, just think, your pension would be worth 30% less and it would be tough luck as RM wanted a scheme where all the responsibility fell on you.

If you retired this week you would be worse off than people who retired before you. And you would find out that someone with less years in the company would of ended up with a better pension with you.

The CWU paid from our funds for experts to come up with a policy that would put some of the risk back onto RM. Thanks to a big yes vote we were able to change things, and to get us all on the same pension regardless of if you had been here one month or 40 years.

That is what the union has done for me.

And to those managers who read this message, your union did nothing on this mattered.

[RobertT]

While I'm broadly in favour of the new proposed CDC pension scheme compared to RM's original proposal of an individual DC scheme. You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.
Any increases or decreases would be made on a yearly basis.

The Defined Benefit Lump Sum Scheme, which will provide tax free cash on commencement of our CDC pension, will be guaranteed by RM, and is quite similar to the DBCBS for those currently in sections A, B or C of the RMPP.

[Trumanity]

While I'm broadly in favour of the new proposed CDC pension scheme compared to RM's original proposal of an individual DC scheme. You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.
Any increases or decreases would be made on a yearly basis.

The Defined Benefit Lump Sum Scheme, which will provide tax free cash on commencement of our CDC pension, will be guaranteed by RM, and is quite similar to the DBCBS for those currently in sections A, B or C of the RMPP.

...and also realise that the proposed CDC scheme is still not in place yet. We still only have the money purchase scheme or the DBCBS.

[wdo1256]

While I'm broadly in favour of the new proposed CDC pension scheme compared to RM's original proposal of an individual DC scheme. You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.
Any increases or decreases would be made on a yearly basis.

The Defined Benefit Lump Sum Scheme, which will provide tax free cash on commencement of our CDC pension, will be guaranteed by RM, and is quite similar to the DBCBS for those currently in sections A, B or C of the RMPP.

Thanks Robert, I didn't realise that it was targeted, i was under the impression that a certain amount was ring fenced. My point was that the CWU did do something rather than accept the original offer.

[k979aaa]

AS to stock markets they go up and down, AS to pensionable pay lots if you were a postman 30 years ago lot's of postmen I worked with worked them self's into an early grave to make their pension up. As to managers they get a pensionable pay on bonuses ie your lapsing and cutting hours but did you really expect them to strike!

[Woody Guthrie]

The CWU paid from our funds for experts to come up with a policy that would put some of the risk back onto RM

There is absolutely no risk or liability for the business from the CDC pension scheme.

That's not opinion, that's a fact.

[Thailand1]

Hi Robert T

You Quote:

You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.

Please tell me how it affects the Retired member who I assume will be already taking the pension?

Thanks in advance.

[k979aaa]

Hi Robert T

You Quote:

You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.

Please tell me how it affects the Retired member who I assume will be already taking the pension?

Thanks in advance.

Once you took your pension it is at the rate you took it thing is I am in three pensions by RM and it's worse have not retired yet!

[RobertT]

Hi Robert T

You Quote:

You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.

Please tell me how it affects the Retired member who I assume will be already taking the pension?

Thanks in advance.

The CDC pension will accrue at the rate of 1/80th of pensionable pay per year. So based on current full time pay of £441.58 per week / £22,962 per year, that would be a pension of £287 for each year worked.

So if you're in the CDC scheme for 10 years, you'll have a pension of £2,870 per year, plus the aim is that it'll also increase by inflation each year.

But that would only be payable if there's enough money in the pot.

Let's say there's 100,000 members all accruing pension at the same rate and the same amount of service in CDC, and with an average life expectancy of 82(NRA of 67). There would need to be at least £4.3 billion in the pot(not counting any inflationary increases), so the maths would look something like this:

287 x 10 x 100,000 x 15 = 4,305,000,000

If the money in the pot is less than what's needed to pay for our pensions, they will go down.

So if the investments are only worth £3.5 Billion for example, our pension would only be around £2,330 per year instead. But if there's more, then our pensions will increase.

In practice everyone will have a proportional slice of the cake depending on their pensionable pay and length of service in CDC. And everyone will be affected in the same way, including those that have already retired and drawing their pension.

The Defined Benefit lump Sum Scheme(DBLSS) will sit alongside CDC to provide the tax free cash, and that will accrue at the rate of 3/80ths of pensionable pay.
The value of the contributions going in is guaranteed by RM, with the aim of inflationary increases each year, which are also guaranteed once added.

There is no risk to RM with the CDC scheme whatsoever and they will not be liable to pay any deficits, because there won't be any – our pensions will go down instead!
But there is some risk to RM with the DBLSS, because if that pot of money isn't worth enough to pay out everyone's cash, they'll have to dip into the coffers to pay it.

The current DBCBS is very similar to the DBLSS, and the last annual reports stated there was a deficit in that scheme, which the company will have to pay unless the investments increase accordingly.

[wdo1256]

Hi Robert T

You Quote:

You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.

Please tell me how it affects the Retired member who I assume will be already taking the pension?

Thanks in advance.

The CDC pension will accrue at the rate of 1/80th of pensionable pay per year. So based on current full time pay of £441.58 per week / £22,962 per year, that would be a pension of £287 for each year worked.

So if you're in the CDC scheme for 10 years, you'll have a pension of £2,870 per year, plus the aim is that it'll also increase by inflation each year.

But that would only be payable if there's enough money in the pot.

Let's say there's 100,000 members all accruing pension at the same rate and the same amount of service in CDC, and with an average life expectancy of 82(NRA of 67). There would need to be at least £4.3 billion in the pot(not counting any inflationary increases), so the maths would look something like this:

287 x 10 x 100,000 x 15 = 4,305,000,000

If the money in the pot is less than what's needed to pay for our pensions, they will go down.

So if the investments are only worth £3.5 Billion for example, our pension would only be around £2,330 per year instead.

In practice everyone will have a proportional slice of the cake depending on their pensionable pay and length of service in CDC. And everyone will be affected in the same way, including those that have already retired and drawing their pension.

The Defined Benefit lump Sum Scheme(DBLSS) will sit alongside CDC to provide the tax free cash, and that will accrue at the rate of 3/80ths of pensionable pay.
The value of the contributions going in is guaranteed by RM, with the aim of inflationary increases each year, which are also guaranteed once added.

There is no risk to RM with the CDC scheme whatsoever and they will not be liable to pay any deficits, because there won't be any – our pensions will go down instead!
But there is some risk to RM with the DBLSS, because if that pot of money isn't worth enough to pay out everyone's cash, they'll have to dip into the coffers to pay it.

The current DBCBS is very similar to the DBLSS, and the last annual reports stated there was a deficit in that scheme, which the company will have to pay unless the investments increase accordingly.

Robert T Thank you very much for the information, you have explained things that all the RM leaflets and magazines couldn't.

From what you have said we have two schemes running parallel from April 18. One CDC which pays a yearly pension and DBCBS which will pay a lump sum. I take it that with the DBCBS scheme we have to invest the lump sum ourselves once we retire.
Also can you take less lump sum to increase your pension or are locked into two separate schemes.

[Dindin]

Hi Robert T
CDC isn't even legal yet
You Quote:

You do realise the benefits it provides are only targetted, and a fall in stock markets that we've seen recently would almost certainly mean our pensions being reduced.
That would apply whether you're an employee, deferred member or retired.

Please tell me how it affects the Retired member who I assume will be already taking the pension?

Thanks in advance.

The CDC pension will accrue at the rate of 1/80th of pensionable pay per year. So based on current full time pay of £441.58 per week / £22,962 per year, that would be a pension of £287 for each year worked.

So if you're in the CDC scheme for 10 years, you'll have a pension of £2,870 per year, plus the aim is that it'll also increase by inflation each year.

But that would only be payable if there's enough money in the pot.

Let's say there's 100,000 members all accruing pension at the same rate and the same amount of service in CDC, and with an average life expectancy of 82(NRA of 67). There would need to be at least £4.3 billion in the pot(not counting any inflationary increases), so the maths would look something like this:

287 x 10 x 100,000 x 15 = 4,305,000,000

If the money in the pot is less than what's needed to pay for our pensions, they will go down.

So if the investments are only worth £3.5 Billion for example, our pension would only be around £2,330 per year instead.

In practice everyone will have a proportional slice of the cake depending on their pensionable pay and length of service in CDC. And everyone will be affected in the same way, including those that have already retired and drawing their pension.

The Defined Benefit lump Sum Scheme(DBLSS) will sit alongside CDC to provide the tax free cash, and that will accrue at the rate of 3/80ths of pensionable pay.
The value of the contributions going in is guaranteed by RM, with the aim of inflationary increases each year, which are also guaranteed once added.

There is no risk to RM with the CDC scheme whatsoever and they will not be liable to pay any deficits, because there won't be any – our pensions will go down instead!
But there is some risk to RM with the DBLSS, because if that pot of money isn't worth enough to pay out everyone's cash, they'll have to dip into the coffers to pay it.

The current DBCBS is very similar to the DBLSS, and the last annual reports stated there was a deficit in that scheme, which the company will have to pay unless the investments increase accordingly.

Robert T Thank you very much for the information, you have explained things that all the RM leaflets and magazines couldn't.

From what you have said we have two schemes running parallel from April 18. One CDC which pays a yearly pension and DBCBS which will pay a lump sum. I take it that with the DBCBS scheme we have to invest the lump sum ourselves once we retire.
Also can you take less lump sum to increase your pension or are locked into two separate schemes.

[Meloned1]

Robert T you are the best pension expert I know and your generosity in giving us mere mortals the easy to understand down to earth information you know is astounding ! Thanks again for taking the time to do this

[Lincox]

Robert t.
I assume that members will have the opprtunity to transfer the benefits of these new schemes at retirement to something like a retirement annuity which will provide a guaranteed income in retirement. I appreciate that it would depend on annuity rates at the time as to whether this may be a better route to take or not, and of course the rates of inflation and predictions of these over the following 20 years or so.

[RobertT]

Robert T Thank you very much for the information, you have explained things that all the RM leaflets and magazines couldn't.

From what you have said we have two schemes running parallel from April 18. One CDC which pays a yearly pension and DBCBS which will pay a lump sum. I take it that with the DBCBS scheme we have to invest the lump sum ourselves once we retire.
Also can you take less lump sum to increase your pension or are locked into two separate schemes.

At the moment, if you're in sections A, B or C of the RMPP you'll be paying into the DBCBS and have been since April 2018. That will provide a lump sum to take with the benefits you accrued up until then.

When the CDC scheme starts(it hasn't yet!), we'll be paying into the CDC scheme itself to provide a targeted pension and the DBLSS to provide a tax free lump sum. It will be a totally separate scheme all other RM pensions!

CDC is a brand new concept in the UK, although some other countries already have them, and there needs to be legislation passed before it's allowed to be implemented. As I understand things, there are 12 stages to the legislative process and they've only completed 2 so far.

When you take your lump sum at retirement, whether it's from the DBCBS or the DBLSS, it'll be yours to do with what you want.

When taking your RMPP(NRA60 & NRA65) / DBCBS lump sum there is some scope to have a bigger or smaller amount. Although it's not possible to commute the DBCBS itself to more pension. See page 12 of the plan guide for more info: https://www.royalmailpensionplan.co.uk/ ... ages_0.pdf" onclick="window.open(this.href);return false;

I don't think there will be any ability to commute any of the DBLSS lump sum to more CDC pension. But in the original literature we were sent about 2 years ago, it said we would be able to pay in an extra 1% of pay(matched by RM) to increase the lump sum.

[RobertT]

Robert T you are the best pension expert I know and your generosity in giving us mere mortals the easy to understand down to earth information you know is astounding ! Thanks again for taking the time to do this