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Pensions Contribution Pay

25 Jul 2019, 19:09

I have been trying to search for an answer to this on the forum but with no luck.
If my basic pay is £441.58 how is my deduction £21.69 if it's 6% based on the DBCBS scheme.
My payslip also has a Pensions Contribution Pay of £361.42 in the top right hand side.
Am I right in thinking that the contributions are made against a lower rate to that of the basic taxable pay,if so why?

Pensions Contribution Pay

25 Jul 2019, 22:15

My pay is also £441.58. My DBCBS C contribution is £23.28. Firstly you have to remember that if you are a section C member, then you pay a reduced amount into the pension. If you started from 1st April 1987 or later, then that is the case. The reduction in contributions was a cack handed way of trying to keep the Final Salary pension going. Members who are in section C are subject to the LEL. The Lower Earnings Limit is, I believe, £3,328 per year. Or, around £64 per week that is NOT pensionable. I'm in the same boat, as are most of the current staff members, thanks to the greed of those who went before us and didn't give a toss about us. Secondly, allowances, in delivery we have 2 Delivery Supplements. One is for the job we do, the second is instead of Door to Door payments. This is not pensionable. Most lost out in money terms on this, as the money was also given to people who work in delivery offices, but don't actually deliver the stuff, such as Callers office staff. The flip side is that BOTH allowance now go up in line with Basic Pay, so it doesn't have to be negotiated separately. Each function has it's own allowances, which would explain the slight difference between your contributions and mine. I get £15.72 and £9.93. My Pensions Contribution Pay is £387.92 The latter isn't pensionable. So, to recap, my pension contribution is based on my basic, the same as yours, plus the larger of the two Delivery Supplements. That should explain the difference. I hope that explains things, it does take a bit of working out. I've gone through my payslip and checked it. Definitely, the larger allowance is the one you add to basic pay. Then divide that total by 100, and multiply by 6. That gives you your pensions Contribution Pay, the figure in the box, below the Office Code. Hope that explains it, a bit long winded I'm afraid, but the only way to explain it that makes sense.

Pensions Contribution Pay

26 Jul 2019, 02:43

Hi Heapsy. Could you please expand on your assertion of “the greed of those that went before us and didn’t give a toss about us”? Who are you referring to?

Pensions Contribution Pay

26 Jul 2019, 05:40

nickbsmooth wrote:I have been trying to search for an answer to this on the forum but with no luck.
If my basic pay is £441.58 how is my deduction £21.69 if it's 6% based on the DBCBS scheme.
My payslip also has a Pensions Contribution Pay of £361.42 in the top right hand side.
Am I right in thinking that the contributions are made against a lower rate to that of the basic taxable pay,if so why?

The 'pensions. Contrib. Pay' is the amount of your wages that's pensionable. So in your case 6% of £361.42 = £21.69.

The main reason for this is the Lower Earnings Deduction, which is an amount section C and section F members have deducted from their pay before their pension is worked out.

*Section C members will have joined the scheme sometime between 1st April 1987 and 31st March 2008.
Section F members will be those who've joined RM sometime after 1st April 2008, have paid into the RMDCP for at least 5 years and are now paying into the DBCBS.

It is also true that you will have a baseline pensionable pay amount, which you need to know to work things out correctly. It was covered well by nataddick on this thread a while back. His answer is copied below:

nataddick wrote:I have just dug out one of my payslips from April this year as I could not work out my pensionable pay to exactly match what was on my payslip. I phoned HR and made notes from that call which I have kept.

I now recall that when I queried my pensionable pay with HR, I was told that everyone has a 'baseline' pensionable pay amount as at 1 April 2015. I was told this was based on a 2.3% increase from 1 September 2014 that being the annual RPI increase applied under the 'new' pension plan rules that were recently agreed, where RM started to increase pensionable pay by RPI in the previous September rather than actual pay increases in April.

I was given my annual baseline pensionable pay which is after deduction of the LED and then divided by 52.179 weeks. I added my pensionable shift allowance to that and deducted my POAL and it balanced exactly. 

So, really without your baseline pensionable pay figure from HR you will never get the figures to balance exactly! The guy I spoke to in HR was very helpful but it took about 15 mins holding on the line before I got a full explanation.

Pensions Contribution Pay

26 Jul 2019, 05:46

renrag40 wrote:Hi Heapsy. Could you please expand on your assertion of “the greed of those that went before us and didn’t give a toss about us”? Who are you referring to?

If I may answer that, or at least put my two penneth in?

I assume Heapsy is referring to the closure of sections A/B(formerly POSSS) in 1987 and the creation of section C(formerly POPS).

I wasn't an employee of RM at the time(I started shortly afterwards), so have no personal experience of the exact reasons, and going back to what happened 32+ years ago is pointless anyway in my opinion.

But the RM decided to change the way pensions accrued for anyone starting employment after 1st April 1987 and subsequently up to 31st March 2008. Which meant they built up benefits slightly differently.
Section A/B accrued pension based on 1/80ths of pensionable pay and a guaranteed lump sum.
While section C built up a pension of 1/60ths, and no lump sum, but with the option to give up some pension to get one. Plus they have the Lower Earnings Deduction taken off their pay to make their pensionable pay.

The finances of the scheme were all in order at the time and the change had nothing to do with trying to keep the final salary scheme open. In fact in 1990 it was deemed necessary for RM to take a pension payment holiday, which went on for a massive a 13 years! Which was far too long and was one of the main reasons the FS scheme closed in 2008.
These articles will explain more:
https://www.thisismoney.co.uk/money/new ... -Mail.html
https://www.express.co.uk/news/uk/87061 ... sion-break

Pensions Contribution Pay

26 Jul 2019, 20:51

renrag40 wrote:Hi Heapsy. Could you please expand on your assertion of “the greed of those that went before us and didn’t give a toss about us”? Who are you referring to?


The members at the time voted in favour to protect their own interests. Shafting their future colleagues. Something the CWU were complicit in. A disgrace if ever there was, to create a two tier pension, and therefore a two tier workforce.

Pensions Contribution Pay

26 Jul 2019, 21:14

As Robert T mentions above my post was accurate at that time and the principle holds good but I do have a subsequent written reply somewhere that I will dig out over the weekend and post. It is a common question that I am regularly asked in the workplace and yet the issue has never been addressed by RM in any publicly available material I have ever seen !

Pensions Contribution Pay

27 Jul 2019, 01:32

Hi Heapsy, as Robert T says it was 32 years ago. What was the alternative if the traitors of 87 had voted no to RMs demands..... if they actually got a vote...... any ideas?
You must be racked with guilt over the people who are in the RMDCP, an inferior pension to the section C? I take it you apologise to them every day because you didn’t prevent the pension C from being closed to new entrants.
In the final analysis RM hold all the cards, they decide what pension provision they are going to provide and we just have to like it or lump it.

Pensions Contribution Pay

27 Jul 2019, 02:17

Well we are where we are the only way most of us will see the shining light of a pension now is with a reduction in the working week with the same pay!

Pensions Contribution Pay

27 Jul 2019, 07:33

I don’t ever remember getting a vote in 1987 nobody really took much interest in pensions then,I don’t suppose members in 1970 will ever remember voting to close down section A to new members either

Pensions Contribution Pay

27 Jul 2019, 08:36

Below is an extract of the very helpful response I had from the Pensions Service Centre last year, following my decision to go part-time.

'Your WREN (the amount you pay into your Pension per year) is £xx,xxx. That is for a Full Time employee on your Grade.

Divide it by 52.179 (the .179 is due to the leap year) to then work out the weekly amount.

As this is for FT employees, divide that figure by 39 and then times it by 31.

You need to add your Evening Shift to that amount and then deduct the POAL.

This figure is off what is listed on your Pensionable Contribution by 28p. That is because not all of the POAL is Pensionable.'

The resultant figure matches my pensionable pay allowing for rounding.

Without knowing your actual WREN figure (don't ask me what it stands for) it is impossible to get the numbers to balance exactly. However, it is quite easy roughly balance your weekly pension contribution to your pay by reversing the calculation, not forgetting to use an LED of £3753 !

Hope this helps.

Pensions Contribution Pay

27 Jul 2019, 15:51

Thank you for all your replies and answers, it's a little clearer now.

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