Don't accept a deal for worse pensions and pay in Royal Mail

[Celgar]

I am no fan of the SWP but they are somewhat correct in their assumptions. Respected investment & pension companies such as Hargreaves Lansdowne are saying RM have agreed a pension proposal that relieves them of a lot of economic risk. In return we have been offered a relatively good percentage pay rise to sort of placate us.
Making good percentages on investing money in the stock market and funds is done successfully in the UK by many companies such as HL and by individuals in their own right. I don't think RM up til now has had competent people running the investment side of the pension scheme who are willing to invest intelligently with some manageable risk.
Apparently three countries currently allow CDC pension schemes to run legally. I hope RM & the CWU have fully researched how those schemes have been run and what kind of returns/profits they are generating.

[fishtank]

This new scheme may be a non-starter right from the kick off if they can't get enough DC members to switch over. A pension scheme like this is heavily reliant on new, young contributors. A collective DC scheme that's only full of ex-DB members in their 40s, 50s and 60s will soon fall flat on its face.

Without knowing the details of the scheme it's hard to say but I suspect the individual DC option will no longer be on the table once (or if) this scheme kicks in but even roping them all in leaves a huge question over future funding. Those with less than 5-10 years service are predominantly part-time. If this pattern continues at some stage the fund will reach a tipping point where part-time contributions (both employer and employee) are attempting to fund full-time pensions.

What this new scheme does is transfer the risk at tipping point to the pensioner. This could have a devastating affect on your pension. This could actually be the worst pension "solution" we could have had. I think if I had the choice between a 10% individual DC scheme and this CDC scheme at 13.4%, I think I would go for the safer option of the individual DC scheme and I never thought in a hundred years that I would use the word "safer" to describe a DC pension.

[RobertT]

I agree Fish! CDC schemes sound a reasonable proposition in theory – a halfway house between DB and DC. But would they work in practice in the UK and the Royal Mail in particular?
Personally over the longer term, I think they’ll be unable to reach their target returns and will ultimately fail the pensioners already in retirement, those who can’t do anything about a drop in income.

Plus it said in the mediators report about the transitional DBCB scheme:

Royal Mail’s risk grows over time as more members join the DBCB scheme, leading to a very large scheme if accrual does not cease within five years.

So if the required legislation for a CDC scheme isn’t forthcoming, we might all end up in a DC scheme anyway. Which from a personal point of view, I wouldn't have a problem with.