Rmdcp Vs dbcbs

leeroy5312 · Post by **leeroy5312** » 28 Feb 2018, 14:44

I've just got a pension review booklet through the door and I can't make heads or tales of what would be the better option.

Can anybody give me some advice on which would be the best scheme for somebody who is currently in the DC scheme, would I be better off switching to the dbcbs?

shepherdess · Post by **shepherdess** » 28 Feb 2018, 15:09

Totally agree very confusing, if you do nothing will you automatically be enrolled into the pension which has been developed by the union

jetblack · Post by **jetblack** » 28 Feb 2018, 16:34

Was initially thinking to go for the DC scheme - more flexibility, and later transfer it (the fund) out to a sipp. But the total contribution to the cash balance scheme is way bigger + you are still able to contribute to Bonusplan if you are already doing so (this will stop if you choose the DC scheme)(Flexiplan also - but you can do this with the DC scheme also).

Not so sure now. Given that the choice of funds and investments with the DC are no doubt prohibitive, its looking like a lot to make up/claw back - even once in a sipp.

Dunno.

Robert ? Nat ? Fish? Anyone else ?

Post by **RobertT** » 28 Feb 2018, 16:42

jetblack wrote:Dunno.

Robert ? Nat ? Fish? Anyone else ?

Personally I plan to go for the DBCBS! The two main reasons being: higher contributions and it will enable me to transfer my Bonusplan out to help fund early retirement, while still having the maximum 25% tax free lump sum.

regalia25 · Post by **regalia25** » 28 Feb 2018, 16:56

jetblack wrote:Was initially thinking to go for the DC scheme - more flexibility, and later transfer it (the fund) out to a sipp. But the total contribution to the cash balance scheme is way bigger + you are still able to contribute to Bonusplan if you are already doing so (this will stop if you choose the DC scheme)(Flexiplan also - but you can do this with the DC scheme also).

Not so sure now. Given that the choice of funds and investments with the DC are no doubt prohibitive, its looking like a lot to make up/claw back - even once in a sipp.

Dunno.

Robert ? Nat ? Fish? Anyone else ?

Having a had a quick read through, I'm not sure the contributions are way bigger in the CBS ? Based on £25000, and 6% employee, the DC plan is a total of £77 PW and the CBS is £80 PW. Personally, I'm not sure whether that is worth giving up flexibility, pension freedom, and having more control on where the money is invested ?

You can still make AVCs with the DC plan (top of page 4)

I'm sure others with more knowledge will enlighten us !

NWpostie · Post by **NWpostie** » 28 Feb 2018, 17:12

I'll have to sit down study it, not happy about NRA67.

Post by **RobertT** » 28 Feb 2018, 17:15

In practice I think the decision for current RMPP members is probably an easier one to make. As they are already in the RMPP all the DBCBS is doing is building up a lump sum so they don’t have to give up any pension to get one, which is particularly useful for section C members.
So they will be getting a better outcome from the RMPP benefits they’ve already accrued!

The choice for current RMDCP members is probably more a case of, do I want to give up the freedoms I currently have in favour of a higher contribution off RM?

But ultimately as with all things pension, it will come down to individual circumstances and choice.

blakeyboy · Post by **blakeyboy** » 28 Feb 2018, 17:22

Am I right in thinking if you are currently in the dc pension and you transfer to the new dbcbs scheme your funds from your dc pension are not transferred over? If this is the case what happens with these funds in the dc pension? I’d presume we have then theoretically got 2 separate pensions?

regalia25 · Post by **regalia25** » 28 Feb 2018, 17:26

blakeyboy wrote:Am I right in thinking if you are currently in the dc pension and you transfer to the new dbcbs scheme your funds from your dc pension are not transferred over? If this is the case what happens with these funds in the dc pension? I’d presume we have then theoretically got 2 separate pensions?

Only for a couple of years.......at which point we may have three !!

k979aaa · Post by **k979aaa** » 28 Feb 2018, 17:40

What is this bit on page 12 "ILL HEALTH BENEFITS 50% of basic pay less ESA for up to three years, Plus lump sum payment at the end of the three years. Pre-2018 benefits paid from date of leaving without reduction." What is this all about?

Post by **rogersh** » 28 Feb 2018, 18:01

regalia25 wrote:
jetblack wrote:Was initially thinking to go for the DC scheme - more flexibility, and later transfer it (the fund) out to a sipp. But the total contribution to the cash balance scheme is way bigger + you are still able to contribute to Bonusplan if you are already doing so (this will stop if you choose the DC scheme)(Flexiplan also - but you can do this with the DC scheme also).

Not so sure now. Given that the choice of funds and investments with the DC are no doubt prohibitive, its looking like a lot to make up/claw back - even once in a sipp.

Dunno.

Robert ? Nat ? Fish? Anyone else ?
Having a had a quick read through, I'm not sure the contributions are way bigger in the CBS ? Based on £25000, and 6% employee, the DC plan is a total of £77 PW and the CBS is £80 PW. Personally, I'm not sure whether that is worth giving up flexibility, pension freedom, and having more control on where the money is invested ?

You can still make AVCs with the DC plan (top of page 4)

I'm sure others with more knowledge will enlighten us !

"the DC plan is a total of £77 PW and the CBS is £80 PW"

I was swayed to opt into the DBCB but having read the detail in the literature today I noted the difference, as you highlighted, was not substantial. Given we will automatically join the CDC scheme, when it is introduced, I may now remain in RMDCP.

leeroy5312 · Post by **leeroy5312** » 28 Feb 2018, 18:26

Thanks for the input guys, it seems like it's not all that better to be in the dbcbs, and others have said, if the CDC comes in then we'll all be put on that anyway.

Think I might just stick with the DC scheme for now

jetblack · Post by **jetblack** » 28 Feb 2018, 18:52

regalia25 wrote: Based on £25000, and 6% employee, the DC plan is a total of £77 PW and the CBS is £80 PW. Personally, I'm not sure whether that is worth giving up flexibility, pension freedom, and having more control on where the money is invested ?

You can still make AVCs with the DC plan (top of page 4)

Yes - but just to be clear, it is you the employee that will be paying a bigger proportion of the contribution to the DC scheme. Also, the employer contribution to the Bonusplan (which you will only be in receipt of through the cash balance scheme) also must be worth another couple of percent on top from the employer (free money). Not relevent if you don't currently pay into the bonusplan - but I, like a few others around here, do - so its worth taking into account.

Problem I have is that I don't really need any extra lump sum, as my 25% tax free is more than accommodated for by my AVC's.

Post by **RobertT** » 28 Feb 2018, 19:17

jetblack wrote:Problem I have is that I don't really need any extra lump sum, as my 25% tax free is more than accommodated for by my AVC's.

I’m in the same boat Jet, I already have more than 25% via AVC’s!
But as the current AVC’s can be transferred separately into another pension arrangement, I plan to do just that with my Bonusplan at some point before I reach 60, to help fund my early retirement. With the DBCBS replacing it to at least some extent.

I don’t plan to pay into any RM pension arrangement for more than another 5 years or so and think the extra contributions however small and the guaranteed element of the DBCBS, will be the better option for me, compared to starting a completely new scheme via the RMDCP.

spen · Post by **spen** » 28 Feb 2018, 19:50

So is this choice now just for until they get the new scheme up and running and then we all get transferred into a new cdc scheme ?