Final Salary Pension

[freespeech]

Can anyone confirm the date used to make up the "final salary" element of NRA60 please. For some reason I thought it was your salary at 31st March 2014 but this seems to be way off my pension statement (even allowing for the reduction of the LEL).

[RobertT]

The way I understand things is:

I'm sure you know the final salary scheme closed in 2008, but it was still linked directly to pay until 2014.

From then and until April 2018 the link between pay and pensionable pay was removed and section C pensionable pay started to increase with RPI(up to a max of 5%) each April.

From April 2018 final salary(pre April 2008) benefits have just increased with RPI(up to a max of 5%), rather than being linked to pensionable pay.
That will be the case until you leave RM or take your benefits.

See the 'Royal Mail Pension Plan(RMPP)' drop down menu here for info: https://www.myroyalmail.com/2018pensionreviewqanda

[Duran]

The way I understand things is:

I'm sure you know the final salary scheme closed in 2008, but it was still linked directly to pay until 2014.

From then and until April 2018 the link between pay and pensionable pay was removed and section C pensionable pay started to increase with RPI(up to a max of 5%) each April.

From April 2018 final salary(pre April 2008) benefits have just increased with RPI(up to a max of 5%), rather than being linked to pensionable pay.
That will be the case until you leave RM or take your benefits.

See the 'Royal Mail Pension Plan(RMPP)' drop down menu here for info: https://www.myroyalmail.com/2018pensionreviewqanda

RobertT So are you saying NRA60 final salary will be based on best of last 3 years from April 2018 not 2014 pensionable pay ? I Know the scheme closed in 2008. I always thought NRA60 would be worked out at years service up to 2008 against pensionable pay when you take it.

[RobertT]

RobertT So are you saying NRA60 final salary will be based on best of last 3 years from April 2018 not 2014 pensionable pay ? I Know the scheme closed in 2008. I always thought NRA60 would be worked out at years service up to 2008 against pensionable pay when you take it.

It used to be that way, but it changed in April 2018.

On 1st April 2018 section C members will have accrued an x amount of pension, and from then on it's been increasing with RPI each year. It will continue to do that until you take it or leave RM.

The link with pensionable pay was therefore removed when the RMPP closed to future accrual.

That's certainly what the page I linked to seems to suggest anyway!

[charlatans]

I think i remember reading that if you changed your grade but it was within the same job family (or words to that effect) that the new grades wage would apply to final salary. Dont know if thats still a thing or helps anyone.

[RobertT]

I think i remember reading that if you changed your grade but it was within the same job family (or words to that effect) that the new grades wage would apply to final salary. Dont know if thats still a thing or helps anyone.

That was part of the 2014 changes.

I believe the end of pension accrual in 2018 ended that for section C members.

[Duran]

I think i remember reading that if you changed your grade but it was within the same job family (or words to that effect) that the new grades wage would apply to final salary. Dont know if thats still a thing or helps anyone.

That was part of the 2014 changes.

I believe the end of pension accrual in 2018 ended that for section C members.

What about for A/B members If you go into an higher pay grade grouping will that increase NRA 60 for final salary up to 2008. Or will it just increase pension going forward?

[RobertT]

I think i remember reading that if you changed your grade but it was within the same job family (or words to that effect) that the new grades wage would apply to final salary. Dont know if thats still a thing or helps anyone.

That was part of the 2014 changes.

I believe the end of pension accrual in 2018 ended that for section C members.

What about for A/B members If you go into an higher pay grade grouping will that increase NRA 60 for final salary up to 2008. Or will it just increase pension going forward?

The answer can be found via the link I provided above.

Section A/B members’ pre-April 2008 benefits continue to be linked to the greater of:
increases in RPI (up to 5% a year) and;
Final Salary pensionable pay at the date they leave.

The Final Salary link is required under the Section A/B rules in order to maintain increases at RPI (up to 5% a year) in the Royal Mail Statutory Pension Scheme. This is not a requirement under the Section C rules. 

[fryer]

[From April 2018 final salary(pre April 2008) benefits have just increased with RPI(up to a max of 5%), rather than being linked to pensionable pay.
That will be the case until you leave RM or take your benefits.]

so, if you leave RM at age 50, will your pension stop increasing by RPI each year?
Its value would be greatly diminished if it was "frozen" for 10 years!

[RobertT]

It would carry on increasing, but by CPI instead.

[fryer]

of course, i remember reading that now! thanks RobertT