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New Pension Question.

20 Jan 2020, 19:38

Hi, I have recently joined the royal mail and opted in to the scottish widow pensions scheme. For the last 3 weeks I have paid in to the pension scheme

On the 3/1/2020
I paid 3.66 in to RMDCP MIN
I paid 3.66in o RMDCP MIN AVc
On the 10/1/2020
I PAID 18.25 IN TO RMDCP MIN
I PAID 18.25 in to rmdcp min avc

On the 17/1/2020
I paid 20.36 in to rmdcp min
I paid 20.36 in to rmdcp min avc

When I then logged in to my scottish widdow account the total pension savings showed as £57.06

Then the breakdown shows as
Payments direct from salary £3.66
Additional voluntary contributions 3.66
My employments payments £49.66


Could someone explain where the 80 odd pound has gone that I have had deducted has gone?

New Pension Question.

20 Jan 2020, 19:47

RobertT

New Pension Question.

20 Jan 2020, 20:05

My maths suggests the first 2 weeks have gone in:

Week 1

3.66 + 2.19 off RM + 3.66 AVC = 9.51

Week 2

18.25 + 10.95 off RM + 18.25 AVC = 45.45

Week 1 + week 2 = 54.96 + a bit of investment growth?

So perhaps RM are a bit slow in giving SW weeks 3 money?
Once they have it should be a total of about £89.60

New Pension Question.

20 Jan 2020, 20:29

RobertT wrote:My maths suggests the first 2 weeks have gone in:

Week 1

3.66 + 2.19 off RM + 3.66 AVC = 9.51

Week 2

18.25 + 10.95 off RM + 18.25 AVC = 45.45

Week 1 + week 2 = 54.96 + a bit of investment growth?

So perhaps RM are a bit slow in giving SW weeks 3 money?
Once they have it should be a total of about £89.60


Hi, thanks for the response. That maths does make sense.

Could u explain to me the difference between the rmdcp and rmdcp avc?

Also, when I check transaction history on SW it shows as employer payment as £47.75. Does this about add up with that you said above?

New Pension Question.

20 Jan 2020, 20:57

As a new member, you're paying 5% of pay and RM is paying 3%. I also assume from your post you're choosing to pay an additional 5%(the AVC) which isn't matched by RM.

You might find that the payments vary from week to week to some degree because with the RMDCP you pay a percentage of your basic pay plus any overtime upto full time hours. So if you're on a 30 hour contract and you do 10 hours OT, the first 8 are pensionable.

We also benefit from PSE which is also known as salary sacrifice, which in practical terms means RM are actually paying our contributions instead of us.
In money terms, it's a saving on National Insurance contributions for both us and RM. Meaning each £1 of gross contributions(the amount on our payslip) only reduces our take home pay by £0.68. The government pay the rest!

There may also be a week or two of 'bedding in time' where payments might fall in or out of PSE. You may have noticed a slight change on some of your payslips? That might also be mirrored on the SW site.

You'll find that working for RM isn't necessarily like working for any other company and that is certainly true of the pensions, as it's a bit of a minefield. But i hope I've gone some way to helping you understand things.

New Pension Question.

20 Jan 2020, 22:35

RobertT wrote:As a new member, you're paying 5% of pay and RM is paying 3%. I also assume from your post you're choosing to pay an additional 5%(the AVC) which isn't matched by RM.

You might find that the payments vary from week to week to some degree because with the RMDCP you pay a percentage of your basic pay plus any overtime upto full time hours. So if you're on a 30 hour contract and you do 10 hours OT, the first 8 are pensionable.


We also benefit from PSE which is also known as salary sacrifice, which in practical terms means RM are actually paying our contributions instead of us.
In money terms, it's a saving on National Insurance contributions for both us and RM. Meaning each £1 of gross contributions(the amount on our payslip) only reduces our take home pay by £0.68. The government pay the rest!

There may also be a week or two of 'bedding in time' where payments might fall in or out of PSE. You may have noticed a slight change on some of your payslips? That might also be mirrored on the SW site.

You'll find that working for RM isn't necessarily like working for any other company and that is certainly true of the pensions, as it's a bit of a minefield. But i hope I've gone some way to helping you understand things.


Thank you very much mate I appreciate it. So I put in 5% to which royal mail put in extra 3%. Then at the moment I'm putting in an extra 5%which h isnt matched at all.

Once I have been hear a year or whatever does the amount that royal mail match increase?? And by how much?

New Pension Question.

21 Jan 2020, 05:37

After 1 year there will be 3 contribution levels to choose from, the highest of which is 6% you, 10% RM.
Any addition contributions you make on top of whichever level you're on don't qualify for any extra off RM.

Full info can be found in the plan guide which is available to view on the Scottish Widows RMDCP website, along with other info you might find useful.

New Pension Question.

10 Feb 2020, 21:34

RobertT wrote:After 1 year there will be 3 contribution levels to choose from, the highest of which is 6% you, 10% RM.
Any addition contributions you make on top of whichever level you're on don't qualify for any extra off RM.

Full info can be found in the plan guide which is available to view on the Scottish Widows RMDCP website, along with other info you might find useful.



Hi RobertT great helps as always. The scheme I'm paying in to is scottish widows 10 Year Royal Mail Lifecycle Strategy. Is that what everyone who has recently started will be paying in to (10 year royal mail lifetime strategy) and could you explain what that actually means.

New Pension Question.

11 Feb 2020, 05:11

The following is taken from the plan guide:

How the Default Lifecycle option works

The Lifecycle option makes investing easier because you do not need to make any decisions about where you invest your Member Account. The Default Lifecycle option uses an investment strategy which changes depending on how many years away from retirement you are. It has two aims:

• the first aim is to give your Member Account high potential for growth, and
• the second aim is to protect the value of your Member Account closer to retirement.

The intention is to achieve higher returns in your earlier years, when your savings can afford to ride the ups and downs of the stock market. As you move to middle-age, your savings are gradually moved from the Blended Equity Fund (which aims for long-term growth) to the Diversified Assets Fund (which aims for stable growth). These two stages form the accumulation phase. Then, as you near retirement and need greater certainty the Default Lifecycle option gradually moves your Member Account to lower risk funds that aim to protect its value.

The move into the protection phase will start ten years before your Selected Retirement Age. This is the ‘switching period’. The Default Lifecycle option is designed for those people planning to take all of their Member Account as a cash sum.

There is no guarantee that returns from the Default Lifecycle option will be better than choosing the Do It Yourself option for investing your Member Account.

If you find you have to retire early, the Default Lifecycle option may not have started moving your Member Account to lower risk funds. Should you be planning to retire earlier or later than the Normal Retirement Age of 65, you can choose a Selected Retirement Age that suits you.

The Default Lifecycle option will start to switch your Member Account ten years before the age you choose. The Plan’s Normal Retirement Age of 65 applies if you do not choose a Selected Retirement Age.


Basically you can choose the default option as explained above or make your own investment choices, of which there are 11. See pages 11-14 of your plan guide for more info.

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