Update from Terry Pullinger

[thedonkey]

Excuse my ignorance but what is SWW?

[POSTMAN]

Excuse my ignorance but what is SWW?

Shorter Working Week

[stephen500]

If I even get a sniff they are going to raid what I have already accumulated in my DB scheme (final salary, CSDB) I shall move as fast as I can to take my lump sum and pension out of the scheme. I am too near the finishing post to have the CWU raid my pension.

[RobertT]

If I even get a sniff they are going to raid what I have already accumulated in my DB scheme (final salary, CSDB) I shall move as fast as I can to take my lump sum and pension out of the scheme. I am too near the finishing post to have the CWU raid my pension.

The pension changes relate to after 1st April 2018. Nobody is proposing raiding what you’ve already accrued.

However, there are two theoretical possibilities that could see what you think you’re going to get from your RM FS/CSDB pension reduced:

1. They change the annual increases from RPI to CPI for section C members – possible, but not planned as far as I know, and taking your pension early wouldn’t stop it anyway.

2. The company goes bust and they can’t afford to pay the pension liabilities – possible, but as our pre 2012 benefits are paid by the government and the post 2012 scheme is currently heavily in surplus, that is not likely in the foreseeable future.

[Nige1974gb]

Great news

[Nige1974gb]

Any news on if the current MTSF agreement had been extended?

[Your late today]

2. The company goes bust and they can’t afford to pay the pension liabilities – possible, but as our pre 2012 benefits are paid by the government and the post 2012 scheme is currently heavily in surplus, that is not likely in the foreseeable future.

If the scheme is heavily in surplus why change it.

[Lincox]

One reason is that if we have a sudden downturn in the stockmarkets, the asset value of the pension fund would drop substantially. This might be the inevitability of a no agreement or poor agreement in the Brexit negotiations.
The majority of companies are looking to reduce costs wherever they can. Final salary pension costs are an unknown quantity because you cannot forecast how inflation is going to affect future wage increases. If wage increases are expected to rise and underlying fund assets decrease then a surplus can soon become an under funding. A company is then obliged to make further contributions to offset any future liabilities. Because companies need to retain shareholder confidence and need to invest to maintain company profit and growth they see pensions as the one area which they can change future costs from schemes that they cannot budget for because of unknown costs. (final salary schemes) to money purchase schemes where they can agree a certain level of funding knowing that the costs each year will only grow in line with the wage increases that they agree.

[stephen500]

If I even get a sniff they are going to raid what I have already accumulated in my DB scheme (final salary, CSDB) I shall move as fast as I can to take my lump sum and pension out of the scheme. I am too near the finishing post to have the CWU raid my pension.

The pension changes relate to after 1st April 2018. Nobody is proposing raiding what you’ve already accrued.

However, there are two theoretical possibilities that could see what you think you’re going to get from your RM FS/CSDB pension reduced:

1. They change the annual increases from RPI to CPI for section C members – possible, but not planned as far as I know, and taking your pension early wouldn’t stop it anyway.

2. The company goes bust and they can’t afford to pay the pension liabilities – possible, but as our pre 2012 benefits are paid by the government and the post 2012 scheme is currently heavily in surplus, that is not likely in the foreseeable future.

Thank you Robert.
1. I am in section B
2. A least we are all covered by the pension protection fund for the Csdb pension.
I think for section B members annual rises prior to taking pension are RPI and convert to CPI once the pension is drawn upon.

[RobertT]

If I even get a sniff they are going to raid what I have already accumulated in my DB scheme (final salary, CSDB) I shall move as fast as I can to take my lump sum and pension out of the scheme. I am too near the finishing post to have the CWU raid my pension.

The pension changes relate to after 1st April 2018. Nobody is proposing raiding what you’ve already accrued.

However, there are two theoretical possibilities that could see what you think you’re going to get from your RM FS/CSDB pension reduced:

1. They change the annual increases from RPI to CPI for section C members – possible, but not planned as far as I know, and taking your pension early wouldn’t stop it anyway.

2. The company goes bust and they can’t afford to pay the pension liabilities – possible, but as our pre 2012 benefits are paid by the government and the post 2012 scheme is currently heavily in surplus, that is not likely in the foreseeable future.

Thank you Robert.
1. I am in section B
2. A least we are all covered by the pension protection fund for the Csdb pension.
I think for section B members annual rises prior to taking pension are RPI and convert to CPI once the pension is drawn upon.

Up to a point, yes.
But if a scheme is put into the PPF, there is no ability to take your pension early & only 90% of what you would have got is payable. Unless you’ve already reached NRA and are taking your pension, in which case you would get 100%.

It’s a decent scheme to fall back on if the worst happens, but it won’t provide the same benefits and flexibilities as a fully funded RMPP.

Let’s hope we’re never in a position to need it.

[stephen500]

If I even get a sniff they are going to raid what I have already accumulated in my DB scheme (final salary, CSDB) I shall move as fast as I can to take my lump sum and pension out of the scheme. I am too near the finishing post to have the CWU raid my pension.

The pension changes relate to after 1st April 2018. Nobody is proposing raiding what you’ve already accrued.

However, there are two theoretical possibilities that could see what you think you’re going to get from your RM FS/CSDB pension reduced:

1. They change the annual increases from RPI to CPI for section C members – possible, but not planned as far as I know, and taking your pension early wouldn’t stop it anyway.

2. The company goes bust and they can’t afford to pay the pension liabilities – possible, but as our pre 2012 benefits are paid by the government and the post 2012 scheme is currently heavily in surplus, that is not likely in the foreseeable future.

Thank you Robert.
1. I am in section B
2. A least we are all covered by the pension protection fund for the Csdb pension.
I think for section B members annual rises prior to taking pension are RPI and convert to CPI once the pension is drawn upon.

Up to a point, yes.
But if a scheme is put into the PPF, there is no ability to take your pension early & only 90% of what you would have got is payable. Unless you’ve already reached NRA and are taking your pension, in which case you would get 100%.

It’s a decent scheme to fall back on if the worst happens, but it won’t provide the same benefits and flexibilities as a fully funded RMPP.

Let’s hope we’re never in a position to need it.

Thanks for the info:
So if I ever think it is in real danger, I will need to take it asap.
Hopefully I could take it before the scheme had a chance to be put into the PFF.
I think once I ask for it, I can get it within a couple of months.
The good news appears to be (for me anyway) that the final salary part is protected by government and the CSDB once it is closed in 2018 appears to be solvent.
I will only have three years in a new pension for all scheme, so what ever happens to that should have minimal impact on my financial planning or options.
-------------------
One last question (Please) Robert T: Is it actually worth building up three years in a new scheme? Am I better off investing my pension contributions in something else? Can I take those three years 2018 to 2021 as a lump sum?

[RobertT]

I don’t think there’s any danger of the RMPP going into the PPF anytime soon and certainly not within the 3 years that apply to you!

We don’t yet know what the new scheme will look like. But it seems likely that the first year(2018/19) at least will be the ‘transitional’ Cash Balance scheme(with DC option?). In which case, you will be giving up a lot of free money by not signing up to it.

Remember, we get the benefit of tax relief and PSE which means a gross contribution of £10 only actually costs us £6.80, plus RM’s contributions on top. Anyone who opts out would be giving up a considerable amount of money, even over 3 years!

That money could be used to help fund your tax free lump sum, or you could treat it as a separate pot, transfer it and use it under normal DC pension rules.

As there is no current UK legislation concerning a Collective Defined Contribution, we don’t yet know how such a scheme would work, let alone if we could take all the money invested as a lump sum.

[antcpfc]

When they say no lump sum does that mean no back dating of pay rise?

[JKSmudge]

When they say no lump sum does that mean no back dating of pay rise?

it means the x% rise will apply as of April 2017, rather than having a lump sum and pay rates remaining unaltered.... we will still get a 'lump' of money when the backdated rise is applied :)

[dvbuk55]

Do I smell a new "Deal of the Century" which will end up as beneficial to the members as the last one. I'm sure someone will correct me and I know that this is not concluded yet but has these negotiations taken longer this time?