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Pension and coronavirus

23 Mar 2020, 12:21

Probably a silly question but anyway here goes...
What effect would the current crisis have on the Rm pension?
For example could the sums quoted in an illustration of a year ago be less now given all the instability of the market etc?
Or if you were receiving your pension already could that go down as a result of all this?

Pension and coronavirus

23 Mar 2020, 14:54

Anything is technically possible, but all your RMSPS and RMPP pension benefits up to 31st April 2018 are defined benefit, so they're based on your pay and length of service.
The Cash Balance is also DB.

The RMSPS is backed by the government/taxpayer.
The RMPP is RM's responsibility and although some of the investments have probably gone down, it's up to RM to make up any shortfall. The last I heard the RMPP had a fairly large surplus.

So in theory none of our DB pensions should be affected by Covid-17, but in a 'world war 3 scenario', who knows?

If you're in the RMDCP or have AVC's, then you've probably already noticed a reduction in your savings.

Pension and coronavirus

23 Mar 2020, 19:29

Thank you Robert.

Pension and coronavirus

24 Mar 2020, 01:18

I'm in the rmdcp pension. My pot has gone down 25% in the last month, shame really it was doing well this year. So now it works out that I have paid £4000 into it in the last year and it's worth exactly the same as it was this time last year! :arrrghhh But I do have a couple of decades for it to recover and unless you are retiring in the next year it should bounce back!

Pension and coronavirus

25 Mar 2020, 20:52

Judgee wrote:I'm in the rmdcp pension. My pot has gone down 25% in the last month, shame really it was doing well this year. So now it works out that I have paid £4000 into it in the last year and it's worth exactly the same as it was this time last year! :arrrghhh But I do have a couple of decades for it to recover and unless you are retiring in the next year it should bounce back!

Don't worry. The markets will recover over the next 5 yrs, although it's a bit unknown what effect the virus will have as it's really only just getting going. There will be recession worldwide no doubts and all this money the nations are pumping to prop up the economy will have to be accounted for somehow, sometime. If you have 20 yrs I'm sure you'll be ok, Don't get too hung up on looking at it for a while. £4k may seem alot but believe me we've seen ten times that in losses over the last 3 weeks in our shares isa. Investing is risky but if you invest in large well run companies, should pay in the long term.

Pension and coronavirus

26 Mar 2020, 09:46

I did a bit of research on the state of the RMPP and according to the plan, the RMG section of the plan has assets of £7,134 million and liabilties of £5,710 million, giving us a surplus of £1,424 million (2017).
Also the mix of investments showed that 63.7% were invested in "Hedging assets, derivatives and collateral".
A basic google search of these terms appear to confirm that all of these types of investments are designed to protect the fund from wild swings, particully "hedging assets".
Robert T could prob enlighten us more.
But having read from the web page below on the surplus and then types of investments they make, I am reasonably happy that our RMPP pensions are protected.
The RMSPS is also paid directly by government.
[url https://www.royalmailpensionplan.co.uk/ ... counts.pdf /url]

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