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Pension choices 2018

04 Mar 2018, 20:24

Hi
I am in section C of pension. Have about 34 years of pension because transferred in some additional years many years back.Age 57.5 .Probably retiring at 60 due to exhaustion!! :sad: Any hints on the best way to proceed under the new proposals.I appreciate must make up my own mind ,just interested to know any opinions. Thankyou

Pension choices 2018

04 Mar 2018, 21:05

You might finish before the cash balance scheme actually ends. All depends on whether you want to lose some pension, or wait until 65. I intend to go at 60. Just under 10 years from now. I'll wait for the NRA65 and possibly do a part time job. I know some would say take your pension early. However, THAT depends on how much cash you have. If that runs out too early, and you are relying on your pension, which is a guaranteed income for life, you may have got it wrong. A reduced pension will increase by a smaller amount throughout your retirement. Remember that a section C member doesn't normally have the luxury of a lump sum, so can you afford to take one?

Pension choices 2018

05 Mar 2018, 21:49

Thanks for the response and opinion it's good to talk :Very Happy Have paid my mortgage, have a small family inheritance so luckier than some.Will retire at 60 take pension, leave NRA 65 pension in place for further accruel. I thought most people took the maximum lump sum when retiring regardless of financial circumstance, or am I missing something?

Pension choices 2018

05 Mar 2018, 23:17

thewayforward wrote:Thanks for the response and opinion it's good to talk :Very Happy Have paid my mortgage, have a small family inheritance so luckier than some.Will retire at 60 take pension, leave NRA 65 pension in place for further accruel. I thought most people took the maximum lump sum when retiring regardless of financial circumstance, or am I missing something?


As a section C member of the RM pension you have the LED or Lower Earnings Deduction to account for. Roughly £64 a week of your pay is non pensionable. This was introduced on 1st April 1987 as a way of keeping the Final Salary pension open.
Of course it was voted in as the members at the time didn't give a stuff about their future colleagues, such as you and me. Instead, a pension supplement was introduced for such members, which is only payable from the date of retirement, up to the date you receive your State pension. The problem is that RM have now got wise to the fact that this will cost them money, as the State pension age is being put back, so will be paid for longer. Hence the reason they want to scrap future accrual of it. To top it all, CWU have also agreed to RM breaking the link of your pension from your pay. In other words, you only get cost of living increases to you pension. Whereas section B members, those who voted to shaft the likes of you and me, get to keep their pension increases linked to pay. They will of course argue that WE get RPI increases to our pension, whereas, they only get CPI, which is usually lower. Complete disgrace if you ask me, but hey, as a section C member, who cares because the CWU certainly don't. :no no

Pension choices 2018

06 Mar 2018, 16:40

thewayforward wrote:Hi
I am in section C of pension. Have about 34 years of pension because transferred in some additional years many years back.Age 57.5 .Probably retiring at 60 due to exhaustion!! :sad: Any hints on the best way to proceed under the new proposals.I appreciate must make up my own mind ,just interested to know any opinions. Thankyou

thewayforward wrote:Thanks for the response and opinion it's good to talk :Very Happy Have paid my mortgage, have a small family inheritance so luckier than some.Will retire at 60 take pension, leave NRA 65 pension in place for further accruel. I thought most people took the maximum lump sum when retiring regardless of financial circumstance, or am I missing something?

To answer your questions:

In my opinion the DBCBS is probably the best way to go for existing RMPP members and particularly section C’ers, because they don’t get a lump sum as standard and the DBCBS will be providing one. Potentially enabling you to take a full pension and a full lump sum, although that will obviously depend how long the transitional period lasts.

Most people do take the maximum lump sum, although whether it’s the best financial move is debatable. Lump sums tend to get spent relatively quickly – new car, nice holiday, treat the grand kids, etc. But based on averages, the larger pension usually provides more income over time and is index linked too, which the lump sum obviously isn’t.

Ultimately it’s your choice based on your circumstances!

Pension choices 2018

07 Mar 2018, 06:12

I'm utterly bamboozled by all the current and proposed pension schemes and their various acronyms.

All I know is I joined in 2001 and have been in 'the' pension scheme since then, can someone tell me just what pension scheme I'm currently in for starters!!

And which is generally considered the best option for someone in my pension scheme?

Pension choices 2018

07 Mar 2018, 11:46

I suspect you are not alone in your confusion . I would point you in the direction of posts by Robert T on this pension forum. Also the Q & A live facebook session from Terry Pullinger & Ray Ellis on the 4 pillars forum give their answers & opinion.

Being relatively new I do not know all the history of the pension.

From myroyalmail;

The Royal Mail Pension Plan closed to new entrants with effect from 1 April 2008 (except for some employees who worked for the company and were under age 18 on 31 March 2008).

The Royal Mail Pension Plan (RMPP) will close to future accrual in its current form
Sections B and C of the Plan will close to future accrual on 31 March 2018.

Pension choices 2018

07 Mar 2018, 14:21

The following is edited from the this site.
https://www.royalmailpensionplan.co.uk

Who pays my pension?
Your pension may be paid in two parts, depending on your circumstances.

Your pension benefits come from two different schemes. One is the Royal Mail Statutory Pension Scheme (RMSPS), which was set up by the Government in April 2012, and is responsible for paying the benefits you earned before that date. The other is the Royal Mail Pension Plan (RMPP), which covers any benefits you earned after that.

This means that if you were an active member (still paying contributions to the Plan) on 1 April 2012, you usually receive two payments when you receive your pension – one from the RMPP and one from the RMSPS. If you left employment, opted out of the Plan, or started to receive all of your benefits before 1 April 2012, then all of your benefits will come from the RMSPS.

The Pensions Service Centre calculates the split between the pension you earned in the RMSPS and the RMPP. They will explain exactly who pays what when they tell you how much your pension will be, shortly before it starts to be paid.


This area is for members who joined on or after 1 April 1987. There's a separate area for members who joined before 1 April 1987.

Could some people be in a different pension scheme?
Yes. Our original pension scheme closed to new members on 31 March 2008. So, if you started paying into a pension after this point, you will have joined the Royal Mail Defined Contribution Plan instead
Last edited by rogersh on 07 Mar 2018, 16:01, edited 1 time in total.

Pension choices 2018

07 Mar 2018, 14:44

I would hesitate to offer pension advice to anyone on here but I will say one thing. Whatever scheme you choose....don't rely on it.

None of the schemes will pay you anywhere near enough to live on as your only form of income.

Pension choices 2018

07 Mar 2018, 15:39

Totally agree F.T. ... I think many are in the dark as far as pensions are concerned & are looking for advice & somebody to clarify what is a complex situation.

As has been pointed out by Robert T "But ultimately as with all things pension, it will come down to individual circumstances and choice"

I have decided to stay in RMDCS having been in for just over 5 years & qualify to join the DBCB scheme.
I cannot see the point, assuming CDC is implemented in a 18 months or so ??, as everyone will automatically be transferred into CDC & those contributions (if I joined DBCB) cannot be transferred into that scheme.
Edit. I am unclear if DBCBS contributions can be transferred to CDC.
Last edited by rogersh on 08 Mar 2018, 13:47, edited 2 times in total.

Pension choices 2018

07 Mar 2018, 16:38

rambodave wrote:I'm in POPS.... I use to get a yearly statement saying I'd get a lump sum when I retire.... has this changed ?

Also does POPS... mean section c ?

POPS(post office pension scheme) began in April 1987 and was re-named section C somewhere along the way! The pension before than was known as POSSS(post office staff superannuation scheme), which is now section A/B.

You should be getting an annual statement every year. Have you moved house and not told the pensions dept?

As a section C member you don’t get a lump sum as standard, but have the choice to give up some pension to get one. The aim of the DBCBS is to generate a lump sum, so you don’t have to give up as much or possibly any pension to get it.

Pension choices 2018

07 Mar 2018, 16:49

By what I have read the CDC scheme will be one scheme for everybody, with the DBLSS alongside. Subject to the necessary legislative and regulatory changes.
What concerns me he is why have we been given such a short space of time to choose the DBLSS of which I can't see that you can transfer this if they then move you into the CDC scheme.
The whole thing just looks like a complete cock up to me. They should get the necessary changes for the CDC scheme first and then come to us with this.
Reading the RMDCP and DBLSS in this booklet doesn't really put us in the picture as it should do. The pro's and con's of each one would off helped more in making a choice, but with the CDC scheme in the air, what the hell do we do.
I know by reading on this forum I am not the only one lost in all this.
Royal Mail and The CWU to me haven't done the best for us here and this looks like this was done in a pub over a few beers.

Pension choices 2018

07 Mar 2018, 17:31

I think it is ridiculous asking members to choose a pension option(RMDCS) without official clarification whether there are plans to close that pension scheme in the near future.

Surely that's a basic piece of information needed to make an informed choice that the employer has no right to withhold?

Pension choices 2018

07 Mar 2018, 17:34

Rich2002 wrote:By what I have read the CDC scheme will be one scheme for everybody, with the DBLSS alongside. Subject to the necessary legislative and regulatory changes.
What concerns me he is why have we been given such a short space of time to choose the DBLSS of which I can't see that you can transfer this if they then move you into the CDC scheme.
The whole thing just looks like a complete cock up to me. They should get the necessary changes for the CDC scheme first and then come to us with this.
Reading the RMDCP and DBLSS in this booklet doesn't really put us in the picture as it should do. The pro's and con's of each one would off helped more in making a choice, but with the CDC scheme in the air, what the hell do we do.
I know by reading on this forum I am not the only one lost in all this.
Royal Mail and The CWU to me haven't done the best for us here and this looks like this was done in a pub over a few beers.

It's another kick the can down the road solution given that the government has not fully passed this legislation is a guessing game with our futures well do you feel lucky punk was that five pensions or six!

Pension choices 2018

07 Mar 2018, 18:08

Got this off the MY Royal Mail site and great answer if the Government say's NO.
How likely is it that the Government will enable CDC schemes?

We believe there is a strong case for CDC schemes and are working with CWU to make that case to Government.

How are you going to convince Government to make the required legal and regulatory changes?

There is no certainty that Government will make these changes. But, we and CWU believe there is a strong case for the introduction of CDC. We’re already lobbying Government to make the necessary changes. We’re committed to doing everything we can to enable the introduction of CDC, but it won’t happen overnight. Royal Mail and the union will keep you updated.

What happens if Government says no?

We are focusing on lobbying Government – with CWU – to make the necessary legal and regulatory changes. We believe there’s a strong case. We have committed with CWU to review progress after 12 months.

I am pretty sure these people have their pensions elsewhere and couldn't give two monkey's what happens to ours.

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