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DCBS Bonus

17 Apr 2019, 12:34

Apologies if i missed it posted already...

I'm a DC member so wouldn't expect to receive any comms on it, but for those in the Cash Balance scheme, has a bonus been awarded this year?

The bonus I'm referring to is the one RMG says is not guaranteed but depends on performance of the CBS and would be applied every 1st April.
Interested to know what I'm missing out on.

DCBS Bonus

17 Apr 2019, 13:19

You're missing out on a big fat nothing, because the first bonus isn't due to be added until 31st March 2020!

You're not likely to have seen it, but for those who are in the DBCBS, the relevant bit in the section A, B & C plan guide states:

Royal Mail (not the Trustee) also sets the policy regarding discretionary increases and may revise it from time to time. The policy is currently to target annual increases in excess of inflation as measured by the Consumer Prices Index (CPI), with such increases capped at a rate of 4% above CPI for each year. Discretionary increases, if awarded, apply each 31 March with the first such discretionary increase expected to apply on 31 March 2020.

DCBS Bonus

17 Apr 2019, 13:31

RobertT wrote:You're missing out on a big fat nothing, because the first bonus isn't due to be added until 31st March 2020!

You're not likely to have seen it, but for those who are in the DBCBS, the relevant bit in the section A, B & C plan guide states:

Royal Mail (not the Trustee) also sets the policy regarding discretionary increases and may revise it from time to time. The policy is currently to target annual increases in excess of inflation as measured by the Consumer Prices Index (CPI), with such increases capped at a rate of 4% above CPI for each year. Discretionary increases, if awarded, apply each 31 March with the first such discretionary increase expected to apply on 31 March 2020.


Ah ok, thanks. Bit cheeky skipping a year.

Not missing much then.
RMG would've paid additional 3.6% pensionable pay (less LED)
The shares in my DC scheme grew 4.8% from Dec 2017 to Dec 2018. CPI over the same period was 2.1%

DCBS Bonus

17 Apr 2019, 13:51

posted wrote:Ah ok, thanks. Bit cheeky skipping a year.

Not missing much then.
RMG would've paid additional 3.6% pensionable pay (less LED)
The shares in my DC scheme grew 4.8% from Dec 2017 to Dec 2018. CPI over the same period was 2.1%

If memory serves me correctly they skipped a year when adding inflationary increases with the previous CARE scheme too.

RM wouldn't have paid anything extra because the DBCBS bonuses are based on investment performance.

The DBCBS pays out a discretionary bonus each year(from 2020), which once added is guaranteed. Your DC investments can go down as well as up.

In my opinion the DBCBS is particularly good for section C members, which relates to most RMPP members up to 2018, because it's there to fund some or all of your lump sum when taking their benefits, meaning a higher index linked pension for life.
I have never really seen the logic in joining the DBCBS if you're already in the RMDCP.
There are also downsides of leaving the RMPP & joining the RMDCP instead.

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