Cash balance fund

[Hyrrokkin]

When the cash offer for RM was accepted by the board at the end of May, it was announced the CDC/RMCPP would go ahead 'as soon as reasonably practicable, with hopes for the scheme to launch in October 2024.'

https://www.pensionsage.com/pa/EP-UK-bi ... tcable.php

Am I right in thinking there's quite a break in parliamentary proceedings until about October? If so, I can't see it happening to April.

I'm no expert on the law, but my understanding is the legislation that will enable the CDC scheme to start is secondary, which is written by ministers and involves putting the meat on the bones of the primary legislation which is already in place.
Once its been published, MP's then have 40 days to challenge it. If nobody does, it becomes law.

I read somewhere online it was due in May/June but has been postponed due to the election. If RM/CWU are saying October, then perhaps there's a window of opportunity for it to go through?
But then again, there's already been a few false dawns, so who knows?

Well it needs to be this year or some kind of DC scheme - this has gone on too long....and yes i know covid,new laws etc etc

[heapsy]

I know this was asked some time back, but what is the period of notice the company have to give, of their intention to close the current schemes? Cheers in advance.

[RobertT]

I know this was asked some time back, but what is the period of notice the company have to give, of their intention to close the current schemes? Cheers in advance.

Legally they've got to hold a 60 day consultation period before any changes to a pension scheme can take place.

RM did that in relation to the DB scheme back in 2017, when they originally wanted to introduce a normal DC plan for everyone.

We've known for the last 6.5 years the DBCBS is a transitional scheme until CDC starts, so I don't think there's any reason for another consultation.

They've said here(faq's no.8) they'll write about 3 months before CDC is due to start with all the details. I assume that will be shortly after the legislation is sorted?

[heapsy]

Once again, many thanks. Just doing a bit of forward planning.

[billycat]

our union rep told everybody there is going to be an announcement next week regarding the start date of the new pension scheme beginning of october .

[RobertT]

our union rep told everybody there is going to be an announcement next week regarding the start date of the new pension scheme beginning of october .

Which suggests they've been told the legislation is imminent(I don't think it's been published yet), and the scheme can finally start in a few months time.

[claretandblue]

What happens to our 6 years of contributions,does it get invested into the new scheme in October?

[RobertT]

What happens to our 6 years of contributions,does it get invested into the new scheme in October?

The DBCBS is part of the RMPP and used to fund your tax free cash when you take NRA65 benefits - slightly different for section F members. That's always been the case and probably always will be.

[claretandblue]

What happens to our 6 years of contributions,does it get invested into the new scheme in October?

The DBCBS is part of the RMPP and used to fund your tax free cash when you take NRA65 benefits - slightly different for section F members. That's always been the case and probably always will be.

So this money will fund my lump sum, and the scheme that starts in October will be a new pension?

[RobertT]

So this money will fund my lump sum, and the scheme that starts in October will be a new pension?

Yep! Where have you been for the last 6.5 years?
The powers that be(mainly government depts) have taken that long to sort everything out.

The new scheme, the RM Collective Pension Plan, will be completely unrelated to any other RM pension.

A new way of building up benefits, new trustees, new website, etc.

[milly]

What happens to our 6 years of contributions,does it get invested into the new scheme in October?

The DBCBS is part of the RMPP and used to fund your tax free cash when you take NRA65 benefits - slightly different for section F members. That's always been the case and probably always will be.

So this money will fund my lump sum, and the scheme that starts in October will be a new pension?

If Starmer and Rachel Reeves allow you to continue to take the 25% tax free lump sum.

[Jefferson Starfish]

So this money will fund my lump sum, and the scheme that starts in October will be a new pension?

Yep! Where have you been for the last 6.5 years?
The powers that be(mainly government depts) have taken that long to sort everything out.

The new scheme, the RM Collective Pension Plan, will be completely unrelated to any other RM pension.

A new way of building up benefits, new trustees, new website, etc.

Same old posties with no clue about what's going on!

[NWpostie]

Going to be a small pension for me as I have 3 years to 60 unless I carry on a little longer to whenever that's going to be, either leave at 61 or 65 to claim my 65 benefit then the CDC.

[Wullie10]

The Cash Balance/DBCBS is part of the RMPP, and is used to fund the lump sum when taking NRA65 benefits. That will continue to be the case.
It's covered here: https://www.myroyalmail.com/collective- ... t-benefits

It can also be transferred out to a personal pension, independently of taking NRA65.

However, there may be the theoretical possibility of being able to transfer the DBCBS into the new CDC scheme, at some point.
But there is currently no ability to transfer benefits between the existing RM pension schemes, and personally I doubt that will change once CDC is introduced.

That is mentioned here: https://www.myroyalmail.com/collective-plan
Where it states:

7. Can I transfer the benefits I’ve already built up into the new plan?
The decision as to whether transfer values would be accepted by the new Collective Plan will be made in the future.

Is it just the cash balance that can be transferred in to another pension or the whole of NRA65 ? I wish to transfer what is remaining of my AVC . I should be able to do this in October just after it is closed ?

[RobertT]

Is it just the cash balance that can be transferred in to another pension or the whole of NRA65 ? I wish to transfer what is remaining of my AVC . I should be able to do this in October just after it is closed ?

It's possible to transfer all of your RMPP(2012-2024) benefits to a personal pension.

For the pension, you'll have to obtain a Cash Equivalent Transfer Value and if that's over £30k, the agreement of an IFA who's qualified to transfer DB pensions, which a majority aren't. The charges are high and they will only agree if it's in your best interests, as you're giving away a guaranteed inflation proofed income for life in return for a pot of money with options.
CETV's tend to be higher the older you are, but can vary due to interest rates, inflation, bond yields, stock markets and the financial position of the scheme as a whole.
They're currently low!

Transferring the DBCBS also needs IFA approval if it's over £30k, but as it's basically just a pot of money similar to a DC pension, in my opinion it should be easier and more likely to be approved.

Transferring AVC's should be the easiest as you're moving from one DC scheme to another and no IFA's are needed, so the value is irrelevant.
Although I've done that myself and the PSC were absolutely useless and it took far longer than it should have.

The RMSPS can only be transferred to a similar DB scheme such as a final or career average plan.

See the RMPP and RMSPS websites for more info.