Is the Pre 2008 Pension unchanged?

[fly-catchers]

With all this current woes about the pension (the plan) from April 2012, will the old final salary pension that was stopped in 2008 be affected by this? Will that part of my pension be based on my actual final salary when I retire, or is it likely to be altered to an earlier date? Also I am still in the added years scheme where I am topping up my pension by about 10 years. How will that be affected?

Even before all these "issues" with pensions I was confused about what you could realistically expect to get when you retired at 60 or 65- now I am completely baffled and lost!!

[2old4this]

My understanding is anything paid in up to April 2010 was taken on by the government. Again its my understanding that they can't change that part of the pension retrospectively. what you would of got is what you will still get from that part of the pension. Its any future contributions and what you'll receive from them that they're disusing.

[Martin Walsh]

Not correct Royal Mail still fund all service Pre 2008 which is still paid based on your final salary when you take your pension. This is the element which Royal Mail are proposing to change and replace with RPI with a cap of 5%. By doing this the pension fund will have a 2 billion surplus which can fund a new owners pension contributions.

Royal Mail are only guaranteeing no further changes for 5 years !!!!

[2old4this]

Not correct Royal Mail still fund all service Pre 2008 which is still paid based on your final salary when you take your pension. This is the element which Royal Mail are proposing to change and replace with RPI with a cap of 5%. By doing this the pension fund will have a 2 billion surplus which can fund a new owners pension contributions.

Royal Mail are only guaranteeing no further changes for 5 years !!!!

So if inflation went over 5% our pensions would be worth much then. I thought the whole point of giving the government our pension was to safe guard anything paid in up to 2008 / 2010.

[2old4this]

Just watched the Safeguarding your pension video. Is our pension that we paid into safe or not. Seems to me they're saying that part won't change its from April 2012 they're looking at changing. 36 years on delivery just over 3 years left to I'm 60 I'm knackerd and confused.

[2old4this]

Not correct Royal Mail still fund all service Pre 2008 which is still paid based on your final salary when you take your pension. This is the element which Royal Mail are proposing to change and replace with RPI with a cap of 5%. By doing this the pension fund will have a 2 billion surplus which can fund a new owners pension contributions.

Royal Mail are only guaranteeing no further changes for 5 years !!!!

OK the more I look into this the more confusing it is to me. Can I ask Dingo a straight question here if he's still on line.

At 56 should I be looking at taking my pension now instead of waiting till I'm 60 and suffer the 20% or so loss. 36 years in the job on deliveries I'm wondering what the hell is going on. Some information seems to be saying anything pre 2008/2010 is as was some is saying its not. The more I look into this the more confused I am.

[taxi4leighton]

dingo cant answer that
if the inflation rate is less that 5%,then it should be ok
the people i feel sorry for are those with many years to go
posties younger than 50 will have to work longer pay bigger contributions for a smaller pension

[nataddick]

There is a lot of confusion around this topic - hence my earlier post under the forum 'The Union were right - "An open letter"

The situation regarding your service prior to 2008 is relatively straightforward as per the latest preliminary accounts of Royal Mail which mention that RMSPS are liable for this subject to the following:-

– benefits accrued under the final salary arrangements to 31 March 2008 (based on number of years in scheme and respective salary at 1 April 2012). The RMSPS rules increase this final salary benefit by RPI each year for active membership

So this means that your pension prior to 31 March 2008 is based on your service as at this date, BUT using your salary as at 1 April 2012. I have no issue with this as the RMSPS are liable for paying your pension based on these 2 dates. The Government have therefore 'capped' there liability at this point and know precisely how much they need to fund it.

The complication arises going forward AFTER 1 April 2012. I don't think Dingo is 100% right - Royal Mail through the RMPP have to fund all pensionable service since 31 March 2008 but based on your salary since 1 April 2012 (which is the same at the moment as we have had no pay award in 2013). Royal Mail want to change the promises that they had previously made and remove the link to final salary from 1 April 2012 and replace this with a less generous RPI link with a cap of 5%. Realistically, OPG's wages are unlikely to rise above 5% in the foreseeable future. Managers are more likely to earn above 5% pay rises and will be hit harder. I have no sympathy for them.

Lots of staff nearing retirement are starting to panic over pensions are are now considering taking their benefits early due to a fear of losing out. Benefits already accrued are afforded considerable security through legislation and Royal Mail are trying to 'con' staff with this latest proposal. Why not just be honest and mention that 25 of the FTSE top 100 companies have closed their final salary schemes as they can't afford them any more? Don't forget that pensions are simply deferred pay and we should not let them rob us of the benefits accrued for past service.

The 5 year guaranteed has been mentioned in various forums but not in the letter members got from Jon Millidge ? Not sure is this is still on the table?

Dingo - the CWU need to get a briefing out quickly to members on the subject of pensions to prevent them making hasty irreversibale decisions. Pensions are of course a valuable and important benefit to members and people should seek independent advice, rather than rely on what their mates at work think or are doing. My advice is not to rush into anything prior to the details of the consultation are known (assuming it goes ahead) and the CWU have responded both to members and Royal Mail.

The fight is on and I am up for it as I will be eligible to take my NRA 60 in just over 3 years - A personal opinion but I don't think I will unduly affected in view of my unambitious career aspirations and proximity to retirement.

[heapsy]

I'm slightly confused here. I thought the pension was already capped at a 5% limit, or am I wrong? Either way, has anybody got idea of the historical figures, as regards cost of living? I mean, how often has the cost of living risen by more than this?

[RobertT]

The way I understand it is that the government are now responsible for all pension liabilities up to April 2012 including the final salary link up to that date. While RM are responsible for all liabilities after April 2102 including the final salary link from then onwards. The only problem is, they say they can't afford it and I suspect it's also got something to do with the fact that pay rises can be a bit hit and miss in terms of percentages. While having an inflation link, they can budget in advance a bit more accurately.

I'm slightly confused here. I thought the pension was already capped at a 5% limit, or am I wrong?

The 5% limit applies to the pension when it's in payment, the proposed changes relate to how your pension will build up before you that.

Either way, has anybody got idea of the historical figures, as regards cost of living? I mean, how often has the cost of living risen by more than this?

http://www.swanlowpark.co.uk/rpiannual.jsp" onclick="window.open(this.href);return false;

[fishtank]

It's difficult to understand the thinking behind the move.
Going forward with the company in private hands it's difficult to see how wages would outstrip RPI in the long term so I can't see how it would save the estimated extra £300 million a year in employer contributions,in fact I'm struggling to see where the £300 million figure comes from at all.
Surely just putting a cap on pensionable pay increases would have produced more savings because you would benefit from the years when pay increases were poor,If I was a company looking at a row over pensions anyway that's what I would have done.

I understand that some members artificially boost the final salary figure in the last 3 years of service but the impact of this is probably minimal.

I can also see where getting your hands on £2 billion of assets and using some or all to boost the balance sheet would be an advantage to a company about to sell itself but I'm not convinced by that either,It's too simplistic.

Looking at it,this should hardly affect those with just a few years to go,should hardly affect those with just a few years in the pre 2008 scheme but will mostly affect the 15-25 year service people around the 40-50 age range who have a substantial amount invested in the pre-2008 scheme but also a substantial number of years until they can take their pension.
Me...really.

[2old4this]

Well I'm still none the wiser just how safe our pension is pre 2012. I thought the government taking it over was to safe guard what we'd already paid in. asked the union this morning they don't know anything or if they do they're keeping it to themselves.

rang the pension up they're sending me paper work to fill in. If I take it now it'll mean a 20% hit. and I'd always looked at my pension as something for when I retire. Looks to me like the pension holiday taken by Royal Mail for some 14 years is now coming home and bitting people like me in the butt.

[RobertT]

Well I'm still none the wiser just how safe our pension is pre 2012. I thought the government taking it over was to safe guard what we'd already paid in.

It is!

asked the union this morning they don't know anything or if they do they're keeping it to themselves.

I asked my union rep about it a few couple of months ago when things first appeared on this forum and he said it was wrong and we've since had it confirmed by both the union and RM!

rang the pension up they're sending me paper work to fill in. If I take it now it'll mean a 20% hit. and I'd always looked at my pension as something for when I retire.

That's what it is for!

Looks to me like the pension holiday taken by Royal Mail for some 14 years is now coming home and bitting people like me in the butt.

The pension holiday certainly didn't help anybody, but please don't take it early without taking proper advice. It may well be a bad move.

[2old4this]

Well I'm still none the wiser just how safe our pension is pre 2012. I thought the government taking it over was to safe guard what we'd already paid in.

It is!

asked the union this morning they don't know anything or if they do they're keeping it to themselves.

I asked my union rep about it a few couple of months ago when things first appeared on this forum and he said it was wrong and we've since had it confirmed by both the union and RM!

rang the pension up they're sending me paper work to fill in. If I take it now it'll mean a 20% hit. and I'd always looked at my pension as something for when I retire.

That's what it is for!

Looks to me like the pension holiday taken by Royal Mail for some 14 years is now coming home and bitting people like me in the butt.

The pension holiday certainly didn't help anybody, but please don't take it early without taking proper advice. It may well be a bad move.

I'd rather not take it till I'm 60. Last thing I want is to take 5% hit for every year I'm under 60.

All I really wanted to know is is the money we've paid in pre 2012 still going to be paid out at the rate we were told.

Getting a simple yes or no has more more confused then ever.

[RobertT]

All I really wanted to know is is the money we've paid in pre 2012 still going to be paid out at the rate we were told.
Getting a simple yes or no has more more confused then ever.

Changes to pension scheme can't be retrospective, so all accrued benefits are safe.