workplace pension scheme

[Jynxx]

Hi.

I've been with royal mail since 2002/3 I didn't expect to stay for any length of time but been here for a few years now, when i was employed one of the first things i did was cancel my contributions to the pension scheme. (the final salary scheme)
I've had a letter about the workplace pension scheme with Zulrich ( <.< i think), does anybody know anything about this scheme? I've read i will be paying 1% then 3% in 2017 and RM will also be paying x amount into the scheme, think i will be paying roughly 30 years into it (if i'm still here in 30 years >.<)
Is it worth keeping? what can I expect to be paid out at the end of it regarding the pension?

Any help would be greatly appreciated.

Many Thanks :)

[fishtank]

http://www.zurich.co.uk/royalmaildcplan ... uction.htm" onclick="window.open(this.href);return false;

[RobertT]

I've been with royal mail since 2002/3 I didn't expect to stay for any length of time but been here for a few years now,

I started in the late 80's and didn't expect to stay longer than a few months!

when i was employed one of the first things i did was cancel my contributions to the pension scheme. (the final salary scheme)

Probably one of the worst financial decisions you will ever make!

Is it worth keeping? what can I expect to be paid out at the end of it regarding the pension?

By not signing up to the pension scheme you are effectively saying no to 'free money'.
At those rates of contribution you won't get a huge pension come retirement age but everything over the basic state pension amount will mean a slightly better old age.

[Jynxx]

Ty for the replies and the link =D

[egor110]

I've been with royal mail since 2002/3 I didn't expect to stay for any length of time but been here for a few years now,

I started in the late 80's and didn't expect to stay longer than a few months!

when i was employed one of the first things i did was cancel my contributions to the pension scheme. (the final salary scheme)

Probably one of the worst financial decisions you will ever make!

Is it worth keeping? what can I expect to be paid out at the end of it regarding the pension?

By not signing up to the pension scheme you are effectively saying no to 'free money'.
At those rates of contribution you won't get a huge pension come retirement age but everything over the basic state pension amount will mean a slightly better old age.

There's no guarantee you'll get back what you've paid into your pension though.
It's invested, if the stocks they purchased didn't do well you loose out, if you stuck the same in a isa the worse that would happen is you'd get back exactly what you paid in.

[RobertT]

There's no guarantee you'll get back what you've paid into your pension though.
It's invested, if the stocks they purchased didn't do well you loose out,

The pension that Jynxx opted out of when he started work with RM in 2002/3 was and still is based on final salary, so the payout is 'guaranteed' to a certain extent. The post 2008 pension for new starters and the auto enrollment pension IS based on stocks investments!

I agree there is always a degree of risk because of the nature of the investment, but pensions are long term investments of anything up to 50 years, stock markets will go up and down but because you're buying shares at different prices and at different times(potentially every week for those 50 years) the returns should average out. Plus most investors with any sense, will slowly reduce their riskier holdings as they get closer to retirement to safeguard the value of their pot. They may also be a 'lifestyle' option that does that automatically.

if you stuck the same in a isa the worse that would happen is you'd get back exactly what you paid in.

If you put the same amount in an ISA instead of a pension you wouldn't get any tax relief or employer contributions and if you mean a cash ISA, your money may well be slowly eroded by inflation over the years and would effectively give you less than you paid in.

[Jynxx]

The pension that Jynxx opted out of when he started work with RM in 2002/3 was and still is based on final salary, so the payout is 'guaranteed' to a certain extent. The post 2008 pension for new starters and the auto enrollment pension IS based on stocks investments!

I thought the final salary scheme what royal mail provides has changed to a new pension scheme that wasn't as good as the original? can you still join the original final salary scheme?

I realise this may sound a little negative but I expect by the time (if) i reach retirement age i will be around 80 (with how the goverment keeps raising the age) I would also be surprised if i reach 70 I have a few health problems so what appealed to me was the x4 wages payout that comes with the workplace pension so at least my family will have something if i go, instead of the x2 what they would receive if i'm not in one.

Thanks for the replies.

[TrueBlueTerrier]

I thought the final salary scheme what royal mail provides has changed to a new pension scheme that wasn't as good as the original? can you still join the original final salary scheme?

Sorry you cant. The scheme itself is now closed.

IIRC since the 80s there are 3 final salary schemes A B C which have all closed.

The only open ones are the one started in 2008 which closed to new members in 2010 (IIRC) and the new one which started this year.

I predict that the 2008 will probably close either just before or just after privatisation, which is why I am bunging in as much money as I can afford.

[RobertT]

In April 2008 the final salary scheme(sections A, B & C) closed to existing members and was replaced with a career average version for those members.
At the same time(or possibly slightly later) a new 'money purchase' scheme was started for new employees, who could join after 12 months in the job.
Auto-enrolment, a government backed initiative, in the money purchase scheme is due to start very soon, which you can opt-out of if you wish.

I predict that the 2008 will probably close either just before or just after privatisation, which is why I am bunging in as much money as I can afford.

I agree that there's a good chance the career average scheme will probably change come privatisation, but you can't put any more money into that scheme on top of your basic contributions. If you're talking about AVC's, then they are built up separately.

[TrueBlueTerrier]

If you're talking about AVC's, then they are built up separately.