not on facebook
ANNOUNCEMENT : ALL OF ROYAL MAIL'S EMPLOYMENT POLICIES (AGREEMENTS) AT A GLANCE (UPDATED 2017)... HERE


ANNOUNCEMENT : BALLOT RESULT : 97.1% YES 75.9% TURNOUT... HERE



what benefits are there of changing from RMDCP to DBCBS

27 Sep 2019, 16:34

Dear Terry T,

A colleague at work asked me what benefits are there of changing from RMDCP to DBCBS, if any.
I would be grateful, if you have an opinion on this, if you could offer it!
Pros and cons?
Thanks, in advance.
Plus I presume for limited period until new pension scheme kicks in.

what benefits are there of changing from RMDCP to DBCBS

27 Sep 2019, 17:47

Well the higher contribution rate from RM is the main draw, 13.6% vs 10% on the DC scheme. Yes the pensionable pay is slightly higher on the DC plan but nowhere near enough to outweigh it.

Plus on the DBCBS you're guaranteed what you've paid in the DC plan could in theory give you nothing.

what benefits are there of changing from RMDCP to DBCBS

27 Sep 2019, 18:18

Did your colleague receive 2018 Pension Review: Members of the Royal Mail Defined Contribution Plan. February 2018?

I suggest you can visit "myroyalmail" site - me at work - pensions - pensions review Q&A 2018, which gives information on the transitional arrangements & information on the different schemes.

what benefits are there of changing from RMDCP to DBCBS

27 Sep 2019, 18:46

There isn't really a definitive answer to which is best because they've both got there pros and cons, and a lot will depend on the individual. But here's my observations:

RMDCP pros:

No Lower Earnings Deduction
Access from age 55 at whatever it's value is at the time.
More investment choices.
More flexibility.

RMDCP cons:

No allowances are pensionable.
Lower contributions as a percentage of pensionable pay.
Investment returns will vary.

DBCBS pros:

Your guaranteed at least the contributions going in.
Annual bonuses are guaranteed once added.
Higher contributions as a percentage of pensionable pay.
Pensionable allowances included.
You can pay into Bonusplan and get a little more off RM.

DBCBS cons:

The Lower Earnings Deduction.
Low targetted annual increases.
No choice of investments, unless you also pay into Bonusplan and/or Flexiplan.
NRA of 65 with the ability to take it beforehand, but with a reduction.

*The pros and cons for RMPP members(sections A, B & C) building up a lump sum via the DBCBS, choosing to switch to the RMDCP are going to be different to the above.

*The plan is for CDC to replace both the DBCBS and the RMDCP.

The info rogersh suggests you read is all available here: https://www.myroyalmail.com/pensions
Also look in the RMPP plan guides for more info, available in the library sections of the RMPP website: https://www.royalmailpensionplan.co.uk/
And the RMDCP website: https://www.scottishwidows.co.uk/save/royalmaildcplan/

what benefits are there of changing from RMDCP to DBCBS

29 Sep 2019, 15:52

Thank you so much for all your replies

what benefits are there of changing from RMDCP to DBCBS

29 Sep 2019, 16:48

Don't forget, the CDC will have an NRA of 67. This will have implications such as reduction of benefits, should you wish to retire early. How people are affected will depend on how much of their pension they have in that scheme.

Previous page Next page


Page 1 of 1