Pension News - Spring 2020

[RobertT]

Some of you may be interested to know that the latest version of Pension News is out. It's available to view online and I assume we'll be getting a paper copy aswell. https://www.royalmailpensionplan.co.uk/ ... _web_0.pdf" onclick="window.open(this.href);return false;

The important points:

Cash Balance(DBCBS) benefits up to 31st March 2019 have been increased by 3.7%.
Funding update – there's just about enough in the pot to pay our pensions.
We're getting new look annual illustrations from both the RMSPS and RMPP.
The information they provide us will be clearer, starting with option letters when taking benefits.

[Hertsman001]

Some of you may be interested to know that the latest version of Pension News is out. It's available to view online and I assume we'll be getting a paper copy aswell. https://www.royalmailpensionplan.co.uk/ ... _web_0.pdf" onclick="window.open(this.href);return false;

The important points:

Cash Balance(DBCBS) benefits up to 31st March 2019 have been increased by 3.7%.
Funding update – there's just about enough in the pot to pay our pensions.
We're getting new look annual illustrations from both the RMSPS and RMPP.
The information they provide us will be clearer, starting with option letters when taking benefits.

Hi Robert thanks for the info , I do hope it will be clearer with the 60/65 pensions separated . Whats your estimate for the cash balance from the past 2 years ?

Many thanks

[RobertT]

Hi Robert thanks for the info , I do hope it will be clearer with the 60/65 pensions separated . Whats your estimate for the cash balance from the past 2 years ?
Many thanks

Going by the info given, they are still not going to show our benefits in NRA60 / NRA65 form.
If that turns out to be the case it'll be another missed opportunity and another example of the mess the admin of our pension is in!!!

Personally as a walking postie in section C, I expect my total 31st March 2020 Cash Balance figure to be around £7,925, which includes the 3.7% uplift of the first years money.
But other peoples figures will be different based on their own pensionable pay, etc.

[heapsy]

RobertT, thanks for the update. Especially your last point, as this also applies to me. It will be interesting to see how long this scheme runs, especially with the current situation. On a slightly separate note, do you think RM will continue with their plans for the CDC scheme, baring in mind the potentially long standing issues regarding pension investment, post CV19?

[RobertT]

We were told a few months ago that the CDC legislation was on track to receive Royal Assent later on this year(Sept/Oct?). That will presumably be put back because some parliamentary business has been postponed, and I assume that includes the pensions bill?

In my opinion RM will still introduce the CDC scheme – I think it's a matter of when rather than if.

Over the long term I don't really think there's a major issue with post Covid-19 investing. It's potentially a good time to invest at the moment and I suspect for a while yet, although research is likely to be more important than ever.

I think CDC would have been in a worse position had it began before the recent issues, as it would have got off to a bad start and would be potentially paying out reduced pensions from the word go.

Even if RM don't introduce CDC, I can't see the DBCBS continuing for more than another 2-3 years at the most, with the only other alternative presumably being an individual DC scheme.

[stephen500]

RobertT, thanks for the update. Especially your last point, as this also applies to me. It will be interesting to see how long this scheme runs, especially with the current situation. On a slightly separate note, do you think RM will continue with their plans for the CDC scheme, baring in mind the potentially long standing issues regarding pension investment, post CV19?

Lionel Sampson (CWU RMPP trustee) told me (this is from memory) that he can't see the CDC scheme coming in before near the end of 2021 at the earliest.
As for the CDC, Royal Mail, will in my opinion want to do this as it limits their liabilties.
I just hope for whoever joins this scheme, that their investments are spread over risks, protecting you from wild swings which can be brought about by things like Covid 19 or the banking crash.
Postmen and women will have to decide, whether this new scheme is for them after taking advice, if need be.

[Thailand1]

Thanks Rob T for pension news link......It also has answered a question regarding the Ex Equitable Life Funds.....I still have a small frozen AVC fund with E.L but it will be interesting to see how much top up has been applied since been moved to Utmost......Also it’s great that they will automatically transfer the funds into Scottish Widows in June.

I am impressed!

[TheStrangler]

Hi Robert thanks for the info , I do hope it will be clearer with the 60/65 pensions separated . Whats your estimate for the cash balance from the past 2 years ?
Many thanks

Going by the info given, they are still not going to show our benefits in NRA60 / NRA65 form.
If that turns out to be the case it'll be another missed opportunity and another example of the mess the admin of our pension is in!!!

Personally as a walking postie in section C, I expect my total 31st March 2020 Cash Balance figure to be around £7,925, which includes the 3.7% uplift of the first years money.
But other peoples figures will be different based on their own pensionable pay, etc.

That's interesting. Do we know if this is deducted @5% for every year taken early? So for example if you took that @55 it would be halved.
As its linked to NRA65 I'd have thought so, yet I've a funny feeling when I spoke to someone at rm pension she said it was a fraction of that was actually deducted because its a different type of scheme...

[Thailand1]

Hi Robert thanks for the info , I do hope it will be clearer with the 60/65 pensions separated . Whats your estimate for the cash balance from the past 2 years ?
Many thanks

Going by the info given, they are still not going to show our benefits in NRA60 / NRA65 form.
If that turns out to be the case it'll be another missed opportunity and another example of the mess the admin of our pension is in!!!

Personally as a walking postie in section C, I expect my total 31st March 2020 Cash Balance figure to be around £7,925, which includes the 3.7% uplift of the first years money.
But other peoples figures will be different based on their own pensionable pay, etc.

That's interesting. Do we know if this is deducted @5% for every year taken early? So for example if you took that @55 it would be halved.
As its linked to NRA65 I'd have thought so, yet I've a funny feeling when I spoke to someone at rm pension she said it was a fraction of that was actually deducted because its a different type of scheme...

Please don’t quote me on this one..... but I am sure when I enquired some time back about the CB Scheme they said if you take it with your NRA 60 pension and there would be very little reduction as it’s sitting in a transitional fund until the CDC comes in i.e. like an AVC.....even though it is part of your NRA 65 benefits.

Not sure if same rules apply if you cash it in before you reach 60.


As I said before I can’t confirm all the above.....but hope it helps

[rogersh]

RobertT, thanks for the update. Especially your last point, as this also applies to me. It will be interesting to see how long this scheme runs, especially with the current situation. On a slightly separate note, do you think RM will continue with their plans for the CDC scheme, baring in mind the potentially long standing issues regarding pension investment, post CV19?

Lionel Sampson (CWU RMPP trustee) told me (this is from memory) that he can't see the CDC scheme coming in before near the end of 2021 at the earliest.
As for the CDC, Royal Mail, will in my opinion want to do this as it limits their liabilties.
I just hope for whoever joins this scheme, that their investments are spread over risks, protecting you from wild swings which can be brought about by things like Covid 19 or the banking crash.
Postmen and women will have to decide, whether this new scheme is for them after taking advice, if need be.

"Postmen and women will have to decide, whether this new scheme is for them after taking advice, if need be."

CDC will be the new scheme for all apparently. I suppose you could decide opt out altogether, but you have to consider loss of employer contributions.

Current status;
The pensions scheme bill Committee: 4th sitting : House of Lords 4 March, 2020.

[RobertT]

Not sure if same rules apply if you cash it in before you reach 60.
As I said before I can’t confirm all the above.....but hope it helps

My understanding is that if you're in sections A, B or C you can't separately cash in your DBCBS pot – you have take it with your other benefits. But you can transfer all of your RMPP(post 2012)benefits, including the DBCBS as one pot.

If you're in section F, then your DBCBS pot can be transferred out to a DC scheme for annuity purchase or drawdown.

[Hawkey99]

Hi Robert,

Can you please say how you got to the figure you £7925 figure ad is that since the scheme started?

Also and it might be a stupid question this is just the lump sum payable alongside your NRA 60/65 schemes and not anything to do with the other future pension scheme you will get ? I Probably got that completely wrong....

Many Thanks

[RobertT]

Hi Robert,

Can you please say how you got to the figure you £7925 figure ad is that since the scheme started?

Also and it might be a stupid question this is just the lump sum payable alongside your NRA 60/65 schemes and not anything to do with the other future pension scheme you will get ? I Probably got that completely wrong....

Many Thanks

My Cash Balance(DBCBS) pot was worth £3,830 as at 31st March 2019 as featured on my annual illustration. That's seen a 3.7% increase making it £3,971.

My weekly 6% contributions during the 2019/20 tax year were £23.27, add on RM's 13.6% and I get £76.04 x 52 = £3,954.

Add the two amounts together and I get £7,925.

The annual increases are discretionary and will vary from year to year, some years there might not be one! But they are added 12 months afterwards, so the increase we've just had only applies to the first year. Next years increase(if there is one) will apply to years 1 & 2.

The DBCBS, for sections A, B or C members is there to fund the tax free lump sum with existing benefits. It is nothing to do with the proposed new CDC scheme!

[TheStrangler]

Not sure if same rules apply if you cash it in before you reach 60.
As I said before I can’t confirm all the above.....but hope it helps

My understanding is that if you're in sections A, B or C you can't separately cash in your DBCBS pot – you have take it with your other benefits. But you can transfer all of your RMPP(post 2012)benefits, including the DBCBS as one pot.

If you're in section F, then your DBCBS pot can be transferred out to a DC scheme for annuity purchase or drawdown.

I think from memory she also said that if you took it as a lump sum it would be taxed and that most people instead used this part to increase the monthly pension.
As a guide I think she said if you're taking the max lump sum and minimum pension then look at the higher figure (monthly pension) as what your minimum pension would be if that makes sense.
Having said that I don't know if she meant the higher figure on the nra65 quote, the nra60 or both...
I think it was something like £400 a year extra to add to the lower pension which I suppose if you x 20 years would give you the pot of about 8k...
I stand to be corrected on all the above!

[stephen500]

RobertT, thanks for the update. Especially your last point, as this also applies to me. It will be interesting to see how long this scheme runs, especially with the current situation. On a slightly separate note, do you think RM will continue with their plans for the CDC scheme, baring in mind the potentially long standing issues regarding pension investment, post CV19?

Lionel Sampson (CWU RMPP trustee) told me (this is from memory) that he can't see the CDC scheme coming in before near the end of 2021 at the earliest.
As for the CDC, Royal Mail, will in my opinion want to do this as it limits their liabilties.
I just hope for whoever joins this scheme, that their investments are spread over risks, protecting you from wild swings which can be brought about by things like Covid 19 or the banking crash.
Postmen and women will have to decide, whether this new scheme is for them after taking advice, if need be.

"Postmen and women will have to decide, whether this new scheme is for them after taking advice, if need be."

CDC will be the new scheme for all apparently. I suppose you could decide opt out altogether, but you have to consider loss of employer contributions.

Current status;
The pensions scheme bill Committee: 4th sitting : House of Lords 4 March, 2020.

That's what I mean by deciding, I am leaving In Dec 2020, so if it came in before then, I wouldn't be joining. Lionel Sampson was confident in his assertion that CDC will not be in this year, regardless of where the bill is in Parliament. He thinks no earlier than late 2021.