Royal Mail pension news and discussion.Please note the advise given in this forum is unofficial, please use the links we have for a more detailed response or see an independent financial adviser.
fishtank wrote:I cannot see how either option would save Royal Mail any money,In fact linking pensions to inflation(CPI or RPI) would probably cost RM more since our basic(pensionable) pay rises usually come in well below both figures.
It wouldn't save or cost RM anything, the government are responsible for all pension we've built up to 31 March 2012,RM is owned by the government, therefore it's the government who want to remove the link to final salary.
In my opinion, any changes will see our final salary pensions effectively deferred in the same way as if we were to leave the company.
RobertT wrote:It wouldn't save or cost RM anything, the government are responsible for all pension we've built up to 31 March 2012.
(47) The on-going RMPP scheme will immediately after the pension relief consist of approximately £ 2 100 million of liabilities and a matching amount of assets remaining with RMG. RMG will continue to bear all future service costs, including liability for any current obligations under the RMPP to maintain a continuing final salary link together with certain enhancements (for example on early retirement) in respect of the historic pension benefits.
This means that after the pension relief, RMG will continue to bear the risk that the historic liabilities for deferred members may increase by reason of any salary increases, which exceed price inflation, as the pension benefits have to be linked to the current final salary level
If i'm reading that right the Government are liable for the basic historic pension costs plus CPI pre-2012 but any salary increases above CPI will be borne directly by RMG basically leaving RMG with the final salary link to maintain as well as any costs relating to enhancements/early retirement..
I can now see why they are trying to weasel out of it giving them a completely clean slate with regards to historic liabilities.
What do you think Robert?
Am I reading it right?
Fair play to you Fishtank, I hadn't realised that RM still had to maintain that link with final salary and not the government.
fishtank wrote:I can now see why they are trying to weasel out of it giving them a completely clean slate with regards to historic liabilities.
What do you think Robert?
Am I reading it right?
Yes I think you are reading it right! And I don't think there's ultimately much we can do about either, other than by negotiation.
But i'm pretty sure that the final salary link will still need to apply from the date of any change and not be backdated to 2008. Our pensions should continue to go up each year by inflation, presumably paid for by the government?
dingo wrote:Yes it will . This is why it pensions was discussed at last weeks briefing . Royal Mail are nervous as there were meant to announce the consultation this week and has now been pushed back a couple of weeks Easter is a good time to bury bad news .
I think it might be a good idea if the union let members know about this Dingo. If it weren't for the fact that I look in here most days I wouldn't of known anything about this.
If I've over 30 yrs service in and I'm over 55 do you think I should consider taking my pension now and swallow losing the 5% reduction I'll lose for every year I'm under 60.
Does seem to me I've worked all my life and now some buggers not only moved the goal posts they've run of with them.
With the final salary pension - if after pravatisation are wages take a race to the bottom to match our competitors, does that bit of the pension drop aswell. In that senario would CPI be better ? I have about 26 years in final salary + the new one.
Brains wrote:With the final salary pension - if after pravatisation are wages take a race to the bottom to match our competitors, does that bit of the pension drop aswell. In that senario would CPI be better ? I have about 26 years in final salary + the new one.
As far as I'm aware Brains (CPI or RPI or RPI+1%...not sure which one applies here,I think it depends if you're section A/B or C) is the default position,the link to final salary is an added benefit/protection.
2old4this wrote:If I've over 30 yrs service in and I'm over 55 do you think I should consider taking my pension now and swallow losing the 5% reduction I'll lose for every year I'm under 60.
That's something only you can answer really, but as a general rule and in my opinion, it's financially a wrong move in the majority of cases.
Brains wrote:With the final salary pension - if after pravatisation are wages take a race to the bottom to match our competitors, does that bit of the pension drop aswell.
If i understand these proposals properly, our pensions would effectively be deferred in the same way as someone who leaves. So they would increase each year with inflation. If the current link to final salary remains our pension could well go down if our wages do.
Brains wrote:In that senario would CPI be better ? I have about 26 years in final salary + the new one.
The current inflation rates are 3.2% for RPI and 2.8% for CPI. If you were given a choice for your pension (or your wages) to increase by either, which one would you choose?
Dingo/Fish/Robert any news yet on the consultation? or any breaking news!!! I've a lot riding on the pre-2008 final salary scheme as I transfered in a lot of years from previous employment
Glenno wrote:Dingo/Fish/Robert any news yet on the consultation? or any breaking news!!! I've a lot riding on the pre-2008 final salary scheme as I transfered in a lot of years from previous employment
I've not heard anything yet, but am keeping my eyes and ears peeled.
fishtank wrote:Are you saying that Royal Mail are planning to retrospectively remove the link to final salary from pensions accrued up to 2008 dingo?
When the final salary pension scheme closed it was decided that when we take our FS pension it will be paid out on the basis of what our final salary is at the time. So if i were to take mine today it would be based on what I earn today.
However if this is to change there could be a couple of possible outcomes:
1) All pension built up to April 2008 will be paid based on what we were actually earning in 2008.
2) All pension built up to April 2008 will be paid based on what we are earning when the change happens, presumably later this year or early 2014.
i think both options should then uprated by inflation each year.
As far as I'm aware, retrospective changes to pension schemes are against the law, so option 2 is far more likely.
The Pec discussed the pension changes on Tuesday. It is expected that Royal Mail will formally announce the consultation before the end of April. There has been a couple more meetings on this issue and it will effect everyone who has service pre 2008 and are still employed in either Post Office counters , Royal Mail or Parcelforce. The Cwu is expected to submit an emergency motion to conference on the pension consultation and proposed changes. When the pension change consultation is announced the CWU will be holding a policy forum of all effected reps.
I hadn't realised that RM still had to maintain that link with final salary and not the government.
