Pension secure?

[mudmonster]

Hello,Just wondering if the RM pensions would be secure if the worst happened

[RobertT]

What we already have via RM pensions shouldn't really change. But going forward is anyone's guess.

The current schemes:

The RMSPS is paid for by the government/taxpayer.

The RMPP pension element is the trustees responsibility, and is in surplus as of the last report and accounts.
It apparently wasn't too affected by the recent run on the bond markets.
The DBCBS shows on RM's balance sheet and it's up to the company to ensure that money is paid out.

If the company fails and there's a pension deficit, the Pension Protection Fund will pay out the majority of benefits.

The RMDCP is administered by Scottish Widows and an individuals pension value is determined by how much goes in and the success of the investments chosen.

What about the future under a private equity firm, etc:

The proposed CDC plan will be similar to the RMPP. Trustees in charge of the pension, with RM paying the lump sum. But with an expected cost of around £400 million per year, there is some doubt whether it has a long term future. But the company do seem to be ploughing ahead for the time being at least.

The alternative would be an individual DC scheme similar to the RMDCP. Legal minimum contributions are only 3% employer, 5% employee. That would potentially cut RM's pension bill by over 75%.

Worst case scenario for current employees is they get made self employed and then there's no compulsion for an employer to provide a pension at all. But what they already have should be secure!

[mudmonster]

thanks Robert T ,