CDC Transition Question

[vmaxv4]

One of the consultation questions addressed were as follows.
5. Why is there not a transition period for people close to retirement who do not want to join the Collective Plan for only a short period?

During the negotiations in 2018, one of the key ambitions of the CWU and Royal Mail was to have one plan for all our people. The Collective Plan achieves this - Royal Mail will pay the same contributions into the same plan for everyone which we believe is fairer. A transition period would be impractical as it would be costly to maintain and, as many people do not take their benefits at their Normal Retirement Age, it would not work for everyone. It has therefore been decided that there would not be transition arrangements for people nearing retirement.

It is worth noting that members who retire after only a short period in the Collective Plan may have options other than taking a small income for life. It would be possible to transfer the benefits into another arrangement. Or, if the total value of benefits in the Collective Plan are small enough, it is likely that they could be taken as a cash lump sum. The first 25% would be tax free, the remainder would be taxed.

Any idea what a “ SHORT PERIOD “ would be..

[tractorboy2]

One of the consultation questions addressed were as follows.
5. Why is there not a transition period for people close to retirement who do not want to join the Collective Plan for only a short period?

During the negotiations in 2018, one of the key ambitions of the CWU and Royal Mail was to have one plan for all our people. The Collective Plan achieves this - Royal Mail will pay the same contributions into the same plan for everyone which we believe is fairer. A transition period would be impractical as it would be costly to maintain and, as many people do not take their benefits at their Normal Retirement Age, it would not work for everyone. It has therefore been decided that there would not be transition arrangements for people nearing retirement.

It is worth noting that members who retire after only a short period in the Collective Plan may have options other than taking a small income for life. It would be possible to transfer the benefits into another arrangement. Or, if the total value of benefits in the Collective Plan are small enough, it is likely that they could be taken as a cash lump sum. The first 25% would be tax free, the remainder would be taxed.

Any idea what a “ SHORT PERIOD “ would be..

Less than 12 months

[vmaxv4]

Cheers