RMDCP

[jetblack]

.. pension planning and management is not just based on a few years projections...

Is this long term enough for you ?



Now go have a look at our pension funds asset allocation, how this has changed over the last 30 years, and how the CWU's WINRS aims to invest the pension fund.

[yellowbelly]

There is the option of increasing your own personal contributions above the 6% if you choose. You will benefit from tax relief and PSE just as now, so a £10 per week gross contribution will effectively only cost £6.80. But there is no option to get more contribution from RM.

I spoke to zurich about the possability of raising my contributions above 6% but they said this was not possible and 6% was the maximum is this not the case?

Many thanks

Pickles, you can make additional 'Voluntary Contributions' in addition to the Regular Employee and Employer Contributions.

Personally I chuck in an extra 25 quid weekly as well as the max 6%/9% employee/employer contributions. Who knows what
difference it will make when I come to draw the pension.......

[pickles10]

There is the option of increasing your own personal contributions above the 6% if you choose. You will benefit from tax relief and PSE just as now, so a £10 per week gross contribution will effectively only cost £6.80. But there is no option to get more contribution from RM.

I spoke to zurich about the possability of raising my contributions above 6% but they said this was not possible and 6% was the maximum is this not the case?

Many thanks

Pickles, you can make additional 'Voluntary Contributions' in addition to the Regular Employee and Employer Contributions.

Personally I chuck in an extra 25 quid weekly as well as the max 6%/9% employee/employer contributions. Who knows what
difference it will make when I come to draw the pension.......

Thanks to you and robert ill speak to them again

[k979aaa]

.. pension planning and management is not just based on a few years projections...

Is this long term enough for you ?



Now go have a look at our pension funds asset allocation, how this has changed over the last 30 years, and how the CWU's WINRS aims to invest the pension fund.

In all honesty you would all be better off investing in the housing market for people need homes and that market has not collapsed investment in infrastructure rail hospitals airports and of course communications company's would in the long haul pay off better than any stock market and shares as we will find out later this year!

[RobertT]

In all honesty you would all be better off investing in the housing market for people need homes and that market has not collapsed investment in infrastructure rail hospitals airports and of course communications company's would in the long haul pay off better than any stock market and shares as we will find out later this year!

Unless you’ve got £millions to invest, the only way to invest in rail, hospitals, airports, etc is to buy shares in those types of companies.

[rogersh]

In February 2014 I received a booklet “helping you save more for retirement” RMDCP
The company’s pension proposal which outlined a new contribution levels for employee & employers.

Lowest level (of 3 Tiers) being 4% the company pays 7% to highest; employee 6% company 9%

The latest offer is to increase each level the company pays by 1% respectively to 8%, 9% & The highest most used figure by Royal Mail 10%.


The booklet gave examples and illustrations; I have edited two of these using the figures stated;


Member aged 20, salary = £20,000 with projected pension age of 65 (assuming you take no cash lump sum). (45 years service)


Your contributions…….RM contributions…….weekly take home pay…...Projected annual pension

……………4%……………………...7%……………………............£303…………........….…...£5,370 pa…

…………….6%………………….....9% ……………………...........£297…………........……...£7,330 pa…


Member aged 40, salary = £20,000 the projected pension age of 65 (assuming you take no cash lump sum). Would, using the same percentages, accrue a projected annual pension of £2,200 & £3,010 as illustrated. (25 years service)

I have worked out earning a pay rate of £413.39 (39 hours) you would need a 35 hour week to have take home pay of £300.

As at March 2017 my member account stated based on current pay & I keep paying the same (I pay 6% since 2016) when I reach 65 (2021) my lifetime savings in today’s terms could be £11,176.76 This could provide an estimated weekly income of £6.73 (£349.96 pa).This is after 7 years in the plan on a 20 hour contract.

To be honest I did not expect much for the length of service but the point is that there are many Royal Mail employees on contracts below 35 hours & as pension contributions are deducted only from basic pay it is difficult to see many realizing a pension to suffice in retirement, even with a 1% increase by Royal Mail.

Feel free to point out any discrepancies with this post as I’m no expert but think I’ve interpreted the actual figures correctly.

My original post gave examples of employees, probably working a 35 hour week, to highlight the fact that part timers, because pension contributions are based on basic pay, will not realise an adequate pension fund.
I have estimated a projection of part time 20 hours, using my pay & contribution figures, working 40 to 45 years until aged 65.

Basic pay for 20 hours = £211.99 p/w
Total pension contributions = £31.30 p/w (employee 6% & employer 9% - The highest tier at present)

Adding a return on investment & inflation to have a pension pot of Circa £80,0000.
If you took out a single life annuity;
£20,000 Tax free lump sum
Plus £3,100 pa. guaranteed taxable income for life - Which equates to £60 p/w

[RobertT]

Yes DC pensions are rubbish! They are pots of money which we have choices with at retirement or anytime after 55.

A £30 per week (combined) contribution is very small in pension terms, and will never really amount to very much. But then again a 6% employee rate is effectively only around 4% when you factor in tax relief and PSE. Add on employer contributions and you’ve got quite a healthy uplift before any investment growth is factored in.

On its own it’s quite a good way of saving money. But if you want a DC pension to actually provide you with a pension for life, via buying an annuity, then it’s fair to say they’re pants!