ANNOUNCEMENT : ROYAL MAIL EMPLOYMENT POLICIES (AGREEMENTS) AT A GLANCE (UPDATED 2017)... HERE


Average Joe

28 Jul 2017, 20:46

Just wondered how the hell the average Jo is supposed to decide which of the 2 schemes to go for if forced to accept either.

Both seem pretty complicated so I wonder if there will be any sort of advice or as a minimum much better examples provided.

To my little brain one seems to be taking the place of the AVCs and the other a poor relative of what we currently have.

In the define contribution scheme have they said if we will be able to run any kind of AVCs with this scheme.

They seem to have adopted a strategy to make everything so complicated that many will lose interest and it will be accepted which will be a sad day.

We need to clone Robert and a few others from this board them to every office...LOL


Average Joe

28 Jul 2017, 21:42

I think flexibility is the answer. For me, the DC option looks to be a better choice. Got divorced some years back, so not looking to build up even more widows pension, as there wont be one. With what I have already, including investments of my own, plus money coming to me from my parents when they are gone, and the state pension, I should have plenty. On the other hand, if you've got a misses, then the DB scheme is probably the best option. Having said that, if she went first, when you are gone, there would be nobody to claim the widows pension. Choices choices. :crazy:

Average Joe

28 Jul 2017, 21:49

Hawkey

Until the precise details of the 'final' pensions Proposal are known, no-one is in a position to offer meaningful comment, let alone advice that can be relied upon by the Average Joe. There are contributors on these forums that seek to provide information to help users decide for themselves, what is an appropriate course of action to take. Each and everyone of us has a unique set of financial and personal circumstances that require individual and flexible solutions, hence caution and consideration is always necessary before relying upon the posts on the pensions forum.

More often than not,the relevant information is 'out there' if people take the time and effort to search for it and then seek guidance. I appreciate that identifying 'reliable' sources of free advice is not as simple as it sounds. I have recently used Pension Wise and The Pensions Advisory Service and both are very helpful in providing 'information' but stress that they cannot provide any form of advice!!!!

Personally, I believe that the CWU have RM on the ropes and we have some way still to go before an acceptable solution is presented to the CWU membership on the Pensions Pillar. The PO got their Pensions Proposal implementation date deferred by 6 months and I see no reason why we can't achieve the same result. RM wan't to keep talking to avoid IA and Pensions is the most complex of the 4 Pillars and has the greatest long term financial saving to the business.

Bring it on !

Average Joe

29 Jul 2017, 04:11

In practice everyone is different! And everyone will be in slightly different financial situations despite doing the same job and earning similar wages. So there is no such thing as an Average Joe.

It’s difficult to suggest the best course of action when we have all the information at hand. So answering questions about the choice between CB & DC when we’ve had virtually no info at all, is impossible, because we can only guess what the proposals will say.

I have to say I disagree with nataddick about the CWU having RM on the ropes. The unions stance on pensions is a DB scheme for all. The two parties are miles apart on that front and RM have announced the closure of the current RMPP and have dismissed WinRS out of hand, and are ploughing ahead with their plans. Personally I don’t think IA or the threat of it, is going to make RM change their minds on pensions!

We were discussing the closure of the RMPP on these forums last year, well before it was formally announced. My opinion at the time was the DB scheme is closing and the unions job is to get the best DC deal possible. RM have come up with a variation on a DC scheme and tried to make out it's DB, but ultimately my opinion hasn’t really changed!

The last time I heard the PO pension was closed to future accrual on 31st March 2017 as planned: viewtopic.php?f=19&t=79330

Average Joe

29 Jul 2017, 08:22

The PO pension was originally due to close to future accrual on 31 August 2016 per the undermentioned articles but due to CWU intervention, a stay of execution was achieved until 31 March 2017. I remember seeing a press release but can't find it at the moment.

https://www.onepostoffice.co.uk/secure/ ... proposals/

http://www.pensionsage.com/pa/Post-Offi ... n-2016.php

Robert, I agree it is unlikely that the CWU will secure the WINRs option and I agree that the latest offer from RM has not materially changed from the original except that the employer's pension contribution is now 1% higher and I am therefore happier about that. RM claim that the current RMPP surplus will run out in 2018 - they wan't to close the scheme at the end of March but do we know that will coincide with the the date the surplus is extinguished ? What if it is December 2018 ? Who gets the benefit of any resultant surplus in the 'old plan' ?

We haven't even had a ballot yet for IA yet and RM have changed from the original pension proposal. Any improvements that the CWU can secure over and above the current offer will be welcome.

Average Joe

29 Jul 2017, 13:23

Thanks for putting me right on the PO pension closure, it must have gone under my radar.

They did announce in May that the surplus in the scheme had increased by £409 Million, so I think we should be ok until the end of March. But the question of what happens if there’s still a surplus afterwards, is still to be answered as far as I know.
Although some sort of surplus going forward has got to be a good thing and would help to prevent any further pension shocks in the future. It wouldn’t necessarily be given to us or swallowed up by RM.

RM have increased their percentage contributions from the original 10% going into a DC scheme, to 13.6% into either DC or CB. However from the limited info we’ve had so far, it seems that section C members will still have the LED deducted from their pay, which they wouldn’t under the original proposal. So that would be a higher percentage of a smaller amount, but still more in monetary terms.

Anymore percentage increases would obviously be welcome and a strong yes vote, should it come to that, will help.

Average Joe

29 Jul 2017, 16:33

Robert - I may be wrong but I see the proposed new DC scheme definition of pensionable pay as being no different from that contained in the big red 2018 Pension Consultation booklet page 10.

'How would pensionable pay be calculated under the proposed Defined Contribution (DC) scheme?

Currently, pensionable pay is made up of basic pay plus,in some cases, pensionable allowances and pensionable bonuses.

Section C members – who make up the majority of Plan members – then have £3,328 deducted (the Lower Earnings Deduction) every year. Under our DC proposal the Lower Earnings Deduction would not be made when calculating pensionable pay. However, allowances and bonuses would not be pensionable when calculating DC benefits under our proposal.

Overall, we expect the majority of members would have higher pensionable pay under our DC proposal. See Section 3 for more information.'

The above definition of pensionable pay is consistent with the existing RMDCP scheme which is logical.

So, ignoring the 2.6% that is going to provide 'additional benefits' e.g. death in service etc, I see a 1% increase in employer contributions based upon my basic pensionable pay, with no LED deduction. A couple of hundred quid a year until I retire. Not much by way of compensation but a step in the right direction.

When RM announced the new wonderful improvements a new version of the booklet with over 20 examples was to follow within days - I am still waiting to scrutinise it ! It may be wishful thinking but have they decided to abort the print run due to another change in the negotiations?

Average Joe

30 Jul 2017, 08:08

We may be reading the same information a bit differently here! But from the limited info we have been given, the way I see things is:

The original DC proposal was 10% of pay, which as you rightly say, the LED would have no longer been deducted for Section C members. This would be in either the existing Royal Mail Defined Contribution Plan(RMDCP) or in a new section of the RMPP(page 5 of the booklet).

After the consultation period, RM came up with their Cash Balance or DC proposal, which was for 12.6%. Which has since been increased by 1% to 13.6%, plus another 2% for death in service, etc.

The latest info on My Royal Mail is here: https://www.myroyalmail.com/pensions/rm-pension-plan where it says:
Our new proposal

We have proposed a Defined Benefit cash balance scheme, following extensive conversations with our unions over many months.
Every year, the Company would contribute 15.6% of pensionable pay. Within this contribution, we now propose increasing the Company’s contribution to members’ retirement benefits by 1% to 13.6%. The remaining 2% of the Company’s contribution will go to other member benefits, including death in service and ill-health benefits.
Members would also have the choice to join an improved Defined Contribution scheme instead. For some members, this could be a better option.

and:
Members can choose to join an improved Defined Contribution scheme

We are also giving Plan members a choice. You could join a Defined Contribution scheme instead, which would also be set up in a new section of the Plan. We propose increasing the Company’s contribution by 1% to 13.6% compared to when we last updated you.
For some members this could be a better option. It will depend on a range of factors such as your age.

also:
Royal Mail Defined Contribution Plan

In addition, for members of the Royal Mail Defined Contribution Plan (RMDCP), from 1 April 2018, we are proposing increasing the Company standard contribution by 1% in each tier, up to a maximum of 10%.This is very good compared to contributions that other large UK employers make to their Defined Contribution schemes.



So I read that as there will be another DC scheme set up just for existing RMPP members who don’t want to join the Cash Balance scheme. But both will be getting the same 13.6% under the latest proposals. . Although it’s not mentioned if those in the ‘new DC scheme’ would benefit from the extra 2% should they be in the position of receiving death in service or IHR payments.

As for the LED reduction for current Section C members it is mentioned in the same link, in the Q&A’s:
6. How would pensionable pay be calculated under the proposed Defined Benefit cash balance scheme?

Under the new Defined Benefit cash balance scheme proposal, there would be the same definition of pensionable pay as under the current Plan.
Pensionable pay is made up of basic pay plus, in some cases, pensionable allowances and pensionable bonuses. Section C members – who make up the majority of Plan members – then have £3,328 deducted (the Lower Earnings Deduction) every year.


Whether those current Section C members who choose to join the ‘new DC plan’ would also continue to face the LED reduction is unclear. But I would assume they probably would do.

Average Joe

30 Jul 2017, 10:12

Thanks Robert - I was unaware of the sneaky change to the pensionable pay definition that has been proposed under the DC Cash Balance option !

I was working on the assumption that the definition of pensionable pay was still per the original proposal and the existing RMDCP. I have learnt something new ! As you say, let's see if Section C members who opt to join the new DC scheme face the LED or not. It is by no means clear.
Last edited by nataddick on 30 Jul 2017, 16:59, edited 1 time in total.

Average Joe

30 Jul 2017, 16:02

Question Robert T. I have 30 years pension contributions so on a basic of about £33000 and £31000 pensionable will I receive a pension of 20/60 as final salary? This is the way I see it as I paid 20 years up until 2008. So in my assumption I will receive £10000 per year on my first part of pension if I complete 40 years service and take it at 60 years old?

Average Joe

30 Jul 2017, 17:19

cloherty1976 wrote:Question Robert T. I have 30 years pension contributions so on a basic of about £33000 and £31000 pensionable will I receive a pension of 20/60 as final salary? This is the way I see it as I paid 20 years up until 2008. So in my assumption I will receive £10000 per year on my first part of pension if I complete 40 years service and take it at 60 years old?

Your NRA60 relates to service up to 31st March 2010, so that includes the first two years of the CARE/CSDB scheme aswell as the final salary scheme post 2008. What you’ve accrued to date is shown on your annual statement!

With 30 years service you’re on the cusp of being in section B or C! Under the original DC pension proposals section B would continue to increase/decrease with wages, while section C would increase with inflation. But those proposals may still change.

Average Joe

31 Jul 2017, 12:11

RobertT wrote:
cloherty1976 wrote:Question Robert T. I have 30 years pension contributions so on a basic of about £33000 and £31000 pensionable will I receive a pension of 20/60 as final salary? This is the way I see it as I paid 20 years up until 2008. So in my assumption I will receive £10000 per year on my first part of pension if I complete 40 years service and take it at 60 years old?

Your NRA60 relates to service up to 31st March 2010, so that includes the first two years of the CARE/CSDB scheme aswell as the final salary scheme post 2008. What you’ve accrued to date is shown on your annual statement!

With 30 years service you’re on the cusp of being in section B or C! Under the original DC pension proposals section B would continue to increase/decrease with wages, while section C would increase with inflation. But those proposals may still change.

Thanks for the reply and started in 88 so in C. So I take it's not the same final salary as when I started for the first 20 years.. I thought by my calculations I would say be on £50000 by then and get 1/3 of the 60% pension . In my terms £16666 + whatever you get for the rest of my pension.

Average Joe

31 Jul 2017, 21:23

bloody hell are you sure your a postie 33 grand

Average Joe

02 Aug 2017, 17:03

cloherty1976 wrote:Thanks for the reply and started in 88 so in C. So I take it's not the same final salary as when I started for the first 20 years.. I thought by my calculations I would say be on £50000 by then and get 1/3 of the 60% pension . In my terms £16666 + whatever you get for the rest of my pension.

If the RMPP was staying open, then your assumptions may well have been correct. But it’s closing, and the proposals going forward are as I stated above, unless something changes before April 2018.

The pension review booklet can be viewed here: https://www.myroyalmail.com/pensions/rm ... nsultation

Full details of how the current RMPP works can be found on the pensions website: http://www.royalmailpensionplan.co.uk/

Average Joe

02 Aug 2017, 18:32

Which ever scheme it is you chose only royalmail will win so fight this this company is not bankrupt financially only morally in the way it treats its customers and staff non of us should suffer while jet set MOYA is at the helm she did the very same to the Canadian postal workers ten years ago!

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