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Have i worked this out correct?

13 Oct 2020, 18:23

I have both pension statements now and have tried to work them out.
Hopefully someone can say if i've done it correct?

I'm in section C
On my RMSPS my current value of pension is £3910.56 age 60 benefit.
On my RMPP it says to add an extra £71 from final salary pension addition age 60.
Giving total £3982.56. You divide by 52 to get £76.58 per week payable at 60 yrs old?

On my RMSPS my current value of annual pension £796 age 65 benefit
On my RMPP i have age 65 CSDB pension at £1979. I presume that to be annually?
Giving total £2775. divide BY 52 to get £53.36 per week payable at 65?

Obviously if i took 25% lump sum these figures change.

My cash balance fund age 65 has lump sum of 7,764.

Can anyone say if my working outs are about correct?

Have i worked this out correct?

13 Oct 2020, 19:34

Looks good to me! :thumbup

Personally I've typed out a 'joint statement' showing my NRA60 and NRA65 on 1 piece of paper, including the various elements that make them up - supplement, increase amount, etc. So I can easily see my benefits without having to work them out again in the future, and to compare them to future statements.

I've also factored my AVC's into the equation and calculated the approximate lump sums I can expect when taking my pension/s.

Have i worked this out correct?

13 Oct 2020, 20:07

Those figures look correct but don't forget that you will be increasing your pension still further each year you work, I think at the moment full timers, section A to C, are saving between £4-£5 thousand a year into the current pension and will accrue just over £300 per year extra pension under the new CDC scheme when it kicks in.

If you have 10 years to go that would be another 3 grand a year on top of anything that you have been quoted so far (No adjustments for RPI or inflation etc made just raw figures)
You could also have up to about £1,500 added to the new lump sum benefit for each year you continue to work once the new CDC starts. ( 3/80th + 1/80th extra (matched by Royal mail) +1/80th of each years pensionable salary)

No adjustments factored in for inflation or pay rises etc and based on about £25,000 pensionable salary.

Have i worked this out correct?

14 Oct 2020, 07:43

£25k pensionable salary is probably a bit high for the average postie based on current wages, but will be higher for some when factoring in pensionable allowances. So probably an accrual rate of a little less than £300 for an average full timer.

The basic contributions into the DBLSS will provide a lump sum of 3/80ths of pensionable pay per year. The original proposal for us to pay more in, was an extra 1% to be matched by RM. 1% is a lower percentage than 1/80th.

Because of how CDC will work, our pensions could also go down depending on the performance of the investments.

Have i worked this out correct?

14 Oct 2020, 08:01

mr hil. wrote:Those figures look correct but don't forget that you will be increasing your pension still further each year you work, I think at the moment full timers, section A to C, are saving between £4-£5 thousand a year into the current pension and will accrue just over £300 per year extra pension under the new CDC scheme when it kicks in.

If you have 10 years to go that would be another 3 grand a year on top of anything that you have been quoted so far (No adjustments for RPI or inflation etc made just raw figures)
You could also have up to about £1,500 added to the new lump sum benefit for each year you continue to work once the new CDC starts. ( 3/80th + 1/80th extra (matched by Royal mail) +1/80th of each years pensionable salary)

No adjustments factored in for inflation or pay rises etc and based on about £25,000 pensionable salary.

Tell me if I am wrong, but from this table I am led to believe that
Annual pension under CDC would be 1/80 ,So lets say £300 pension added per year
Annual lump sum under CDC would be 3/80 , would equal £900 in a lump sum added each year.
Where does the extra 1/80 come from? This is additional contributions made by the member, matched by Royal Mail (as state above)?
Ah, from re reading the document, it does say the member can increase the cash balance by 1% which as you say is different than an extra 1/80 th.
cdc 2.jpg
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Have i worked this out correct?

14 Oct 2020, 16:43

Oops my error, I read 1% but obviously thought 1/80th matched by RM. 1% of what though....

1% of my £25000 pensionable pay would equal £250 per year so matched by RM would mean £500 per year so not far off the original £1500 I first posted when added to the £900 from the main cash scheme.

The £25000 figure I arrived at came from a spreadsheet I have for my own wages I didn't include all the delivery supplement and some other allowances I get or overtime and Bonuses.
It was rounded to £25000 for ease of calculations.

I am presuming that each year of the new CDC, 1/80th of that years pensionable salary will be added to your "pot" and then be subject to the whims of the investment strategies employed by the schemes administrators. Not like the final salary scheme we enjoyed in section C originally that was a percentage (1/60th per year I think) of your final salary, now defunct of course and now based on some other salary period frozen in time and only increasing by RPI or some other such spurious figure.

If this is correct each years 1/80th will be a different amount but I would hope keeps pace with inflation, although the current models have shown that we should be able to outperform the old final salary schemes of old.

Have i worked this out correct?

14 Oct 2020, 17:27

RobertT wrote:Looks good to me! :thumbup

Personally I've typed out a 'joint statement' showing my NRA60 and NRA65 on 1 piece of paper, including the various elements that make them up - supplement, increase amount, etc. So I can easily see my benefits without having to work them out again in the future, and to compare them to future statements.

I've also factored my AVC's into the equation and calculated the approximate lump sums I can expect when taking my pension/s.


Thanks for confirming that.

I like that idea about keeping working outs and comparing to future years. :thumbup
I am nearly 40 so have plenty more time to keep growing my pot as long as my body will keep going.
Hopefully when i pay my mortgage off in 6 yrs i can divert some of that cash in to my current AVC.
Thanks RobertT

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