LTB 304/24 – Royal Mail Group – The Collective Plan

[POSTMAN]

LTB 304/24 – Royal Mail Group – The Collective Plan
No. 304/24

11th September 2024

Dear Colleague

Royal Mail Group – The Collective Plan

Further to LTB 282/24 dated 23rd August.

As previously reported, there are two key attributes to the new Collective Plan that if members wish to activate in time for the commencement of the scheme on the 7th October, will need to be done by this Friday 13th September. This date is required in order for payroll to process the necessary arrangements.

Specifically, this applies to both the Lump Sum Booster and Additional Voluntary Contributions (AVC’s) which can be activated via the People App.

Lump Sum Booster: Members can pay an extra 1% of pensionable pay into the guaranteed lump sum and Royal Mail will match this 1% making an extra 2% going into your lump sum. There is also an extra benefit as you will get tax relief on your 1% by paying via Pension Salary Exchange (PSE).

Additional Voluntary Contributions (AVC’s): Members can also pay AVC’s into the scheme and this will also be subject to tax relief by paying via Pension Salary Exchange (PSE). It should be noted, if members are currently paying an AVC into another Royal Mail pension scheme, this will stop once The Collective Plan is introduced. Members will therefore need to restart the AVC for The Collective Plan.

We are pleased to report that over 20,000 people have already registered to pay the 1% Lump Sum Booster and very nearly 4,000 AVC’s have been applied via the People App. We fully expect these numbers to continue to rise, however to make this happen in time for the commencement of the scheme, applications must be logged on the People App by this Friday. Members can of course apply after this date; it just means these attributes will start at a later date.

A helpful slide that amplifies these benefits has been produced by Royal Mail and is attached.

Branches are encouraged to bring these benefits to the attention of our members and to remind them that to activate either of these attributes in time for the commencement of the scheme will need to be done by this Friday via the People App. More information on The Collective Plan can be found at http://www.myroyalmail.com/collective-plan

Your sincerely,

Martin Walsh

Deputy General Secretary (P)

Andy Furey

Assistant Secretary

[Rommagic]

Should lower the age too 65.

[yubin282]

Are we gonna get any info about...

1. What to do with our RMDCP pot ?

2. The NEST scheme, and can we join both schemes ?

Will we receive any paperwork (not online stuff) in regards to the above ?

Had none so far.

[SMS1969]

AFAIK you cannot join both schemes, the Nest pension anyway is far inferior to the new scheme.

Your RMDCP pot will remain invested.

[RobertT]

Should lower the age too 65.

For that to happen one of three things need to change:

1. More money going in.
2. Investments need to increase more than expected.
3. A reduction in accrual rate.

[RobertT]

Are we gonna get any info about...

1. What to do with our RMDCP pot ?

It's your choice.
Keep it where it is or transfer to your own personal pension.
Or access your money if you're over 55.
https://www.moneyhelper.org.uk/en/pensi ... on-schemes

2. The NEST scheme, and can we join both schemes ?

No!
RM aren't going to pay two lots of employer contributions!

Will we receive any paperwork (not online stuff) in regards to the above ?
Had none so far.

I would guess there's far more info available online than they'd be willing to print and post to 140,000(?) people.

[Gary55]

Is the current pension to remain invested by Royal Mail. If so can we draw down from it directly if over the minimum age to do so thanks. By current pension I'm referring to the new one after privatisation

[Rommagic]

Should lower the age too 65.

For that to happen one of three things need to change:

1. More money going in.
2. Investments need to increase more than expected.
3. A reduction in accrual rate.

Pension surplus too lower age?.

[yubin282]

Are we gonna get any info about...

1. What to do with our RMDCP pot ?

It's your choice.
Keep it where it is or transfer to your own personal pension.
Or access your money if you're over 55.
https://www.moneyhelper.org.uk/en/pensi ... on-schemes

2. The NEST scheme, and can we join both schemes ?

No!
RM aren't going to pay two lots of employer contributions!

Will we receive any paperwork (not online stuff) in regards to the above ?
Had none so far.

I would guess there's far more info available online than they'd be willing to print and post to 140,000(?) people.

Is there anything official to say we can't join both schemes, I didn't see anything in the info we received.

Why wouldn't they send out information to 140,000 people ? Sounds unprofessional to me.

[RobertT]

Should lower the age too 65.

For that to happen one of three things need to change:

1. More money going in.
2. Investments need to increase more than expected.
3. A reduction in accrual rate.

Pension surplus to lower age?.

The union want to use the RMPP surplus to reduce the RMCPP NRA down to 65.

Personally I think RMPP members only should benefit from that. Their contributions have helped to create it afterall!

[RobertT]

Is there anything official to say we can't join both schemes, I didn't see anything in the info we received.

The info I've seen online says you have a choice of RMCPP or Nest, or else opt out of RM pensions altogether.

Why wouldn't they send out information to 140,000 people ? Sounds unprofessional to me.

Most people are online these days, so they provide a certain amount of info by post and more in depth stuff on a website.
It's cheaper, quicker and makes more common sense. Not unprofessional at all in my opinion.

[RobertT]

Is the current pension to remain invested by Royal Mail. If so can we draw down from it directly if over the minimum age to do so thanks. By current pension I'm referring to the new one after privatisation

The DBCBS?
That started in 2018.

It's usually used to fund the lump sum with NRA65 or can also be transferred out to a personal pension for drawdown or annuity.
That will continue to be the case.

[sweepster70]

I believe we can use part of the DBCBS to fund a lump sum in our final salary. Does anyone who is receiving their pension know what percentage this is?
I do have avc's but this will only account for around a third of my lump sum.
As this has dragged on far too long, my DBCBS was just under £41,000 as of 31st March, with another 6 months to be added. What would be the best way to avoid paying too much tax?

[RobertT]

I believe we can use part of the DBCBS to fund a lump sum in our final salary. Does anyone who is receiving their pension know what percentage this is?
I do have avc's but this will only account for around a third of my lump sum.
As this has dragged on far too long, my DBCBS was just under £41,000 as of 31st March, with another 6 months to be added. What would be the best way to avoid paying too much tax?

There isn't a set percentage as far as I'm aware and the amount you can take can vary to some degree. But however much it is, it's not going to be a massive amount.
You'll be informed of the amount, if any, at the point of claiming your NRA60.

In theory you can transfer the DBCBS out to a personal pension for more flexibility, which should at least enable you to avoid paying tax at 40% on any of it.
If your pot is worth more than £30k you'll need an IFA to sign off any transfer, but as a few recent threads on here have shown, it's not that easy to find one that wants to do it or at a reasonable cost.

[sweepster70]

Thanks Robert, informative as always.