RM Statuatory Pension Scheme

[cyclemech1]

I took early retirement last year so am receiving my monthly pension from the 'new' RMSPS.

A couple of months ago I received a pamphlet from the Pensions Centre saying that all terms, conditions and benefits would remain the same as if I were receiving my pension from the 'old' RM scheme.

Now my question is this (and probably RobertT will know the answer) is there anything that would stop a future Government from saying ' hang on, these benefits are far too generous and are costing far too much so lets slash them', thus cheating me (us) out of what I've paid in for throughout my service?

Not that politicians would ever renage on a deal of course!

[RobertT]

As far as I'm aware there is no precedent for a pension already in payment to be reduced, apart from where it's in the rules of the scheme. For example:

The RM scheme pays out a 'pension supplement' which will be taken away when you reach state pension age. This is also known as 'clawback'.

I hope that helps.

[cyclemech1]

Thanks RobertT that sort of puts my mind at rest.

However, I've already seen some articles in newspapers about how public service pensions (which I understand RMSP is part of) is costing 'every family' £1200 per year and this cost is set to rise dramatically over the next 30 years.

Also, whats been happening in Greece (and Spain as well I think) is that the governments have had to slash public service pensions because of the state of their economy.

I just don't trust politicians of any party!

[stodgy88]

The RM scheme pays out a 'pension supplement' which will be taken away when you reach state pension age. This is also known as 'clawback'. Does everyone taking royal mail pension early get this "pension supplement" and what %of your pension is it -thanks

[RobertT]

However, I've already seen some articles in newspapers about how public service pensions (which I understand RMSP is part of) is costing 'every family' £1200 per year and this cost is set to rise dramatically over the next 30 years.

The exact figures always seem to differ depending on where you read it, but the government took over the RM's pension assets(about £28 Billion) aswell as the total pension liability, which adds up to about £35 Billion, so they're bailing the scheme out to the tune of around £7 Billion. By comparison, the total of all the other public sector liabilities (teachers, firemen, etc) total over £1,000 Billion and they don't have any assets like ours - it's paid for by taxpayers. So our pension deficit is actually quite small in the world of government budgets.

Also, whats been happening in Greece (and Spain as well I think) is that the governments have had to slash public service pensions because of the state of their economy.

There are currently UK laws stopping any changes to a pension scheme being retrospective, they can however, change a pension scheme going forward for contributing members, which is what happened to ours in 2008 when the final salary scheme was replaced by the career average version.

I just don't trust politicians of any party!

I can understand your concern, but as a pensioner I don't think you have anything to worry about.

[RobertT]

The RM scheme pays out a 'pension supplement' which will be taken away when you reach state pension age. This is also known as 'clawback'. Does everyone taking royal mail pension early get this "pension supplement" and what %of your pension is it -thanks

The pension supplement is only paid to Section C members when they leave RM and take their pension. I don't know the exact calculations but it's based on a percentage of the Lower Earnings Deduction.

[cyclemech1]

I know that the government took all of our assets when they took over the scheme, but surely that money has now been absorbed into the exchequer leaving our scheme now not self financing but dependent, as the other public service schemes, on government payments every month?

I fear for my younger ex-colleagues for the future.

[RobertT]

I know that the government took all of our assets when they took over the scheme, but surely that money has now been absorbed into the exchequer leaving our scheme now not self financing but dependent, as the other public service schemes, on government payments every month?

I think when you factor in the deficit, the RM pension hasn't really been self financing for years.
The government took over the scheme on the basis that all existing liabilities would be paid out to current scheme members.
These cannot be changed barring a change in the law, which would be political suicide. So in my humble opinion, we don't need to worry too much.

Plus the assets of the pension weren't just sold off in one go to fund the Chancellors bank account, a large proportion are still invested and growing and will be drip fed into the economy over time, including into public sector pensions.

Personally i think younger posties need to worry more about their pensions going forward, particularly after privatisaton, rather more than how their existing accrued rights will be paid out.

[stodgy88]

joined pension before april 1st 1987 ,so not a member of section c.

[tentionfree]

The RM scheme pays out a 'pension supplement' which will be taken away when you reach state pension age. This is also known as 'clawback'. Does everyone taking royal mail pension early get this "pension supplement" and what %of your pension is it -thanks




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[RobertT]

The RM scheme pays out a 'pension supplement' which will be taken away when you reach state pension age. This is also known as 'clawback'. Does everyone taking royal mail pension early get this "pension supplement" and what %of your pension is it -thanks

Only Section C members get the supplement, so that's employees who started working for RM and joined the pension scheme between April 1987 and April 2008. However if you take your pension and continue working for RM you won't get it.

The amount payable will vary depending on service, so for more info download 'Guide to Benefits (C)' here:
http://royalmailpensionplan.co.uk/55/pensions-brochures" onclick="window.open(this.href);return false;