PENSION INCREASE

[ireneallanna]

Is the Royal Mail Pension Increased by c.p.i. or r.p.i ?

[heapsy]

Apparently it depends on the scheme you are in. Sections A/B are, I think CPI as this is the government preferred method. Section C I believe, is RPI. This was covered recently somewhere on here.
Robert T seems to be the man in know more than most.

[TrueBlueTerrier]

Is the Royal Mail Pension Increased by c.p.i. or r.p.i ?

if normal pay is anything to go by its an alamagamation of both you can tell because the pay rises are C.R.A.P.

The real answer as far as I can tell from their website http://www.royalmailpensionplan.co.uk/" onclick="window.open(this.href);return false;
Section is C is RPI

Section A and B are Pension Increase Review Orders from the Gov.

As far as I know this is correct as of Apr 2010 - the rules may have changed or be changing for April this year as I believe they may be changing to CPI which is usually lower.

[easter bunny]

The CWU have asked the RM to clarify the position regarding Section A and B Members. CPI will be the favoured rate for the Government so unless the CWU manage to persuade the RM to not change the RPI then the RMPP will become a 2 tied system where Section C has bigger pay increases than A and B in most years.

The Pension Minister scrapped plans to make Private schemes use CPI .


The RPI rate in September 2010 was 4.6%
The CPI rate in September 2010 was 3.1%

Year on Year would become a big loss if the rate became CPI for A and B members.

[heapsy]

The CWU have asked the RM to clarify the position regarding Section A and B Members. CPI will be the favoured rate for the Government so unless the CWU manage to persuade the RM to not change the RPI then the RMPP will become a 2 tied system where Section C has bigger pay increases than A and B in most years.

The Pension Minister scrapped plans to make Private schemes use CPI .


The RPI rate in September 2010 was 4.6%
The CPI rate in September 2010 was 3.1%

Year on Year would become a big loss if the rate became CPI for A and B members.

You are quite right Easter Bunny, however, not as big a loss as the loss suffered by section C members who lose out on pensionable pay to the tune of £3328 every year, this is known as the LEL or lower earnings limit. This was introduced by RM back in April 1987 as a way of watering down the pension scheme. Rather unfair that these members should now be hit with a second watering down of the pension by introduction of a scheme worth even less. Cannot understand how people are supposed to save for their future when these sort of things are going on.

[IcanthelpthewayIam]

You are quite right Easter Bunny, however, not as big a loss as the loss suffered by section C members who lose out on pensionable pay to the tune of £3328 every year, this is known as the LEL or lower earnings limit.

erm think you have wrong end of stick there, we do not lose out on ANY pensionable pay due to the LEL, the LEL basically determines when you start paying national insurance contributions, does not affect the RM pension scheme in any way either A B or C

[RobertT]

erm think you have wrong end of stick there, we do not lose out on ANY pensionable pay due to the LEL, the LEL basically determines when you start paying national insurance contributions, does not affect the RM pension scheme in any way either A B or C

Heapsy has got that right, section C members have £3328 taken off their pay before pension deductions are taken off.

RM actually froze the LEL around 1999/2000, if they hadn't it would now be £5,044.

[IcanthelpthewayIam]

erm think you have wrong end of stick there, we do not lose out on ANY pensionable pay due to the LEL, the LEL basically determines when you start paying national insurance contributions, does not affect the RM pension scheme in any way either A B or C

Heapsy has got that right, section C members have £3328 taken off their pay before pension deductions are taken off.

RM actually froze the LEL around 1999/2000, if they hadn't it would now be £5,044.

Read what heapsy said in his post, we do lose out anything because of the LEL we are on a defined benifit scheme which is based on a career average earning, if the LEL is being deducted before they calculated our contributions then that is good for us, they can increase my LEL anytime, heapsy has it the wrong way around

As for RM freezing LEL they can't its set by the government

[RobertT]

Read what heapsy said in his post, we do lose out anything because of the LEL we are on a defined benifit scheme which is based on a career average earning, if the LEL is being deducted before they calculated our contributions then that is good for us, they can increase my LEL anytime, heapsy has it the wrong way around.

With the career average scheme we effectively have a separate pension for each year of pensionable employment, so for example, if we earn £20k this year the LEL is taken off leaving pensionable pay of £16,672.
If RM had continued to increase the LEL along government guidelines then pensionable pay would be £14,956.
Only a basic level of maths ability will tell you that your pension will be less.

As for RM freezing LEL they can't its set by the government

RM did freeze the LEL in April 1999, I still have the leaflet saying so. For current LEL level see here:
http://www.hmrc.gov.uk/paye/rates-thresholds.htm" onclick="window.open(this.href);return false;

You may also like to see this:
http://royalmailpensionplan.co.uk/29/what-you-pay" onclick="window.open(this.href);return false;