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MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 15:17

If you are aged 55 buy shares and retire at aged 60 you are classed as a good leaver you can then cash them in without penalty. Can anyone confirm this is right as the info as provided in the booklet.

TIA

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 15:37

postie2007 wrote:If you are aged 55 buy shares and retire at aged 60 you are classed as a good leaver you can then cash them in without penalty. Can anyone confirm this is right as the info as provided in the booklet.

TIA

Look on page 10 where it says:
What happens if i leave RM?......
You retire in line with our current policy on retirement for the purposes of the SIP (see frequently asked questions)


And then on page 13, where it says:
How do you define ‘retirement’ for the purpose of tax exemption when leaving Royal Mail?
This is currently defined as ‘resignation aged 60 or over’. Please check with HR Services for the latest definition of retirement, if you are planning on retiring soon.


It's basically the same rules as with the free shares!

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 15:45

postie2007 wrote:If you are aged 55 buy shares and retire at aged 60 you are classed as a good leaver you can then cash them in without penalty. Can anyone confirm this is right as the info as provided in the booklet.

TIA

The FAQs say that retirement "is currently defined as resignation aged 60 or over. Please check with HR services for the latest definition of retirement if you are planning on retiring soon".

This suggests to me that they are planning on (or at least considering) changing that retirement age. This would make it risky for someone aged 55 planning to retire at 60 as they won't have held any of the shares long enough when they retire if in 2 or 3 years Royal Mail decide to redefine retirement as resignation aged 65 or over.

I'm in a similar position and due to that risk am going to give this one a miss.

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 15:49

postie2007 wrote:If you are aged 55 buy shares and retire at aged 60 you are classed as a good leaver you can then cash them in without penalty. Can anyone confirm this is right as the info as provided in the booklet.

TIA


That's how I read it - retire at 60+ and it's all good ( doesn't matter if you are 59 when you start buying, at 60 you are a good leaver and keep Matching Shares and pay no Tax/NI ).

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 15:57

posted wrote:The bit I don’t get is on the green table on page 7 of the booklet.

It refers to rollover and unused allowance matching shares.
Some months there’s less than 5 shares bought but still allocated a 1 matching share and 9 bought but allocated 2 matching.
Also reference to 4 matching rolling over.
I’ll ring helpline Monday but wondering if anybody has any thoughts


The way I see it, they've set up a 'rolling' entitlement to matching shares, so that you aren't deprived of your matching shares if Royal Mail's share price goes above 500p

Think about it...

The maximum number of matching shares anyone can get in any one month is 2.

If Joe is paying in £50 per month, and the share price is exactly 500p when Equiniti buy the partnership shares on the market, the maths are simple.
Joe gets 10 shares for his money, which automatically entitles him to 2 matching shares.

So let's say in month 2, the share price is 512p. Equiniti buy 9 partnership shares on the market, costing £46.08 but he only gets 1 matching share because although he bought more than 5 new shares, he didn't acquire the ten that triggers 2 matching shares.

Let's say in month 3, RM have released some good results, and the share price has risen to 550p. Equiniti have Joe's £50 plus the unused £3.92 from last month. They can still only buy 9 shares that month, however, because he doesn't have the £55 in their accounts that are needed to purchase 10 shares at this higher price

BUT...

Because he has now purchased 28 shares (10+9+9) in total, and was allocated only 3 matching shares so far, he gets allocated 2 matching shares this month (despite only 9 partnership shares being purchased that month), simply because ownership of 25 or more shares entitles him to be the recipient of 5 matching shares in total.

If they hadn't set things up as described in page 7 of the booklet, then any time the share price is above 500p when the it comes to the 15th of the month, people could be disadvantaged, as it will only be possible to buy 9 (or fewer) shares with that £50. [You cannot buy anything other than whole shares]. In that scenario, they can only give you 1 matching share, because less than ten shares were purchased. People would miss out on a heck of a lot of matching shares if they only got 2 when the share price happened to be 500p or lower !!!

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 16:10

So, if you stay in for the full 5 years, am I right in thinking I’d need to wait till Oct 2028 to sell the FULL 5 years worth of shares tax/NI free? As each month allocation starts a new 5 year period. So 10 years!

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 16:28

dazer0070 wrote:So, if you stay in for the full 5 years, am I right in thinking I’d need to wait till Oct 2028 to sell the FULL 5 years worth of shares tax/NI free? As each month allocation starts a new 5 year period. So 10 years!

The 5 years relate to how long after you've bought your shares and got your matching ones, that you can sell them tax free. There is currently no timetable as to how long the scheme will be open for to buy them.

As per the FAQ's:
How long will the Company run Partnership & Matching?
There is no formal timeline for the Plan. This is something that we will keep under review. If we decide to close or alter the Plan, we will notify you.


Personally I think the matching shares are ones that have been surrendered by 'bad leavers' and when they run out, the scheme will close.

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 16:59

RobertT wrote:
dazer0070 wrote:So, if you stay in for the full 5 years, am I right in thinking I’d need to wait till Oct 2028 to sell the FULL 5 years worth of shares tax/NI free? As each month allocation starts a new 5 year period. So 10 years!

The 5 years relate to how long after you've bought your shares and got your matching ones, that you can sell them tax free. There is currently no timetable as to how long the scheme will be open for to buy them.

As per the FAQ's:
How long will the Company run Partnership & Matching?
There is no formal timeline for the Plan. This is something that we will keep under review. If we decide to close or alter the Plan, we will notify you.


Personally I think the matching shares are ones that have been surrendered by 'bad leavers' and when they run out, the scheme will close.

So instead of us receiving any allocation they will offer us them at cost price minus taxes but you will be gambling that you could recoup the cost as the the shares could go down in time!

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 17:25

k979aaa wrote:
RobertT wrote:Personally I think the matching shares are ones that have been surrendered by 'bad leavers' and when they run out, the scheme will close.

So instead of us receiving any allocation they will offer us them at cost price minus taxes but you will be gambling that you could recoup the cost as the the shares could go down in time!

That's just my personal opinion and you can argue that if that is the case, they should be re-allocated to everyone.

The shares you buy with this scheme are bought on the open market at whatever the price is on the 15th of each month. There are also preferential tax breaks with the government effectively paying for 32% of each share bought.
You don't pay for the matching shares off RM.

You have to hold them for 5 years to get full tax free status or until you leave after age 60, just like the free shares.

Any share purchase is a gamble!

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 18:11

So, ideally, we should start rumours of strike action on the 14th of every month then we can buy on the resultant dip! :Very Happy

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 18:36

wandle wrote:
posted wrote:The bit I don’t get is on the green table on page 7 of the booklet.

It refers to rollover and unused allowance matching shares.
Some months there’s less than 5 shares bought but still allocated a 1 matching share and 9 bought but allocated 2 matching.
Also reference to 4 matching rolling over.
I’ll ring helpline Monday but wondering if anybody has any thoughts


The way I see it, they've set up a 'rolling' entitlement to matching shares, so that you aren't deprived of your matching shares if Royal Mail's share price goes above 500p

Think about it...

The maximum number of matching shares anyone can get in any one month is 2.

If Joe is paying in £50 per month, and the share price is exactly 500p when Equiniti buy the partnership shares on the market, the maths are simple.
Joe gets 10 shares for his money, which automatically entitles him to 2 matching shares.

So let's say in month 2, the share price is 512p. Equiniti buy 9 partnership shares on the market, costing £46.08 but he only gets 1 matching share because although he bought more than 5 new shares, he didn't acquire the ten that triggers 2 matching shares.

Let's say in month 3, RM have released some good results, and the share price has risen to 550p. Equiniti have Joe's £50 plus the unused £3.92 from last month. They can still only buy 9 shares that month, however, because he doesn't have the £55 in their accounts that are needed to purchase 10 shares at this higher price

BUT...

Because he has now purchased 28 shares (10+9+9) in total, and was allocated only 3 matching shares so far, he gets allocated 2 matching shares this month (despite only 9 partnership shares being purchased that month), simply because ownership of 25 or more shares entitles him to be the recipient of 5 matching shares in total.

If they hadn't set things up as described in page 7 of the booklet, then any time the share price is above 500p when the it comes to the 15th of the month, people could be disadvantaged, as it will only be possible to buy 9 (or fewer) shares with that £50. [You cannot buy anything other than whole shares]. In that scenario, they can only give you 1 matching share, because less than ten shares were purchased. People would miss out on a heck of a lot of matching shares if they only got 2 when the share price happened to be 500p or lower !!!

You would expect they would make that clear if it was the case. They’ve just left it to a reader to make their own understanding.

The only thing they’ve been clear on is that you get a maximum 2 free shares in any given month. That too has conditions that you get 1 for every 5 bought.

MRM.COM : New employee share plan opens Friday 27 July

28 Jul 2018, 22:53

I've thought about it a lot and I'm going to give it a miss. I'm not in a position to make plans 5+ years ahead of now and the £15 per week is more important to me at the moment.
If it were a 5 year deal and I got all the shares in 5 years then I'd probably go for it but in 5 years I'll only be able to take a months worth, to get the 5 years worth would take 10 years etc.
As a very long term investment it is quite good but not excellent, you will always lose 3 years free shares and have money tied up for 5 years. Selling early will only be worthwhile if the shares significantly jump up in value.

Not for me.

MRM.COM : New employee share plan opens Friday 27 July

29 Jul 2018, 09:41

Spedley wrote:As a very long term investment it is quite good but not excellent...


If I had young children, I'd see this as an excellent way to save up for their futures.
Each monthly £100 investment only costs £68, and the dividends on each batch, over five years, could amount to about £26*. The share price would have to be below 200p in 2023 for me to lose money overall (and you'd have to think a bidder would try to buy-out Royal Mail if the price got anywhere significantly close to or below the flotation price)

*obviously, if the share price were to reach £10 by 2023, then you'd only get 5 shares + 1 matching share for your monthly investment. Not a worry, as your first month's batch (22 shares) would by then be worth £220 - more than treble what you'd paid for them

Like RobertT, however, I suspect this scheme will not run for as long as five years

MRM.COM : New employee share plan opens Friday 27 July

30 Jul 2018, 12:59

New share scheme , good or bad ?

MRM.COM : New employee share plan opens Friday 27 July

30 Jul 2018, 23:06

petsco wrote:New share scheme , good or bad ?

4 pages of opinions and you're still asking? :arrrghhh

MRM.COM : New employee share plan opens Friday 27 July

30 Jul 2018, 23:16

I spoke to somebody on helpline today (Equiniti?) and even he was surprised at lack of info on the roll over.

So here's how he explained it.
If in any given month you buy shares, but not enough to trigger 1 or 2 matching shares, the residue is carried over to the following month.
So month 1, 4 shares bought, 0 given in matching.
Month 2, 1 share bought, plus the 4 you bought previous month, get's you one matching share.

Also, month 3, 12 shares bought, 2 given in matching.
Month 4, 3 share bought, plus the 2 extra you bought previous month, get's you one matching share.

MRM.COM : New employee share plan opens Friday 27 July

31 Jul 2018, 17:25

Sorry might have missed it but what happens to the money if your short? Does it roll over to next month?

MRM.COM : New employee share plan opens Friday 27 July

31 Jul 2018, 22:00

Jambomatt1874 wrote:Sorry might have missed it but what happens to the money if your short? Does it roll over to next month?

Correct

MRM.COM : New employee share plan opens Friday 27 July

02 Aug 2018, 12:34

Be careful if you are maxing out on AVCs, you'll probably drop out of PSE.

MRM.COM : New employee share plan opens Friday 27 July

02 Aug 2018, 20:36

They should have opened a new SAYE scheme, that was genuinely more helpful and rewarding to staff as some used it like a saving scheme but had the option to invest in shares IF they wanted to.

This new scheme has far too many hoops to jump through, and unless you are realistically planning on staying with Royal Mail for 10 years, and are very confident about the shares increasing or remaining the same, and you have disposable income then I wouldn't recommend it.

BT ran multiple successful SAYE schemes, why can't RM do the same instead of trying to reinvent the wheel every time?? :arrrghhh :arrrghhh

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