How safe are our pensions?

[freespeech]

Given the ongoing shitshow is there a real risk to any of our pension entitlemnent? Does the situation mean further delay to the new scheme and, if so, what are the advantages or disadvantages to our DBCBS pots growing (now at 5 years next week).

[RobertT]

Given the ongoing shitshow is there a real risk to any of our pension entitlemnent?

A similar question was asked just the other day:
viewtopic.php?f=27&t=109315

Does the situation mean further delay to the new scheme and, if so, what are the advantages or disadvantages to our DBCBS pots growing (now at 5 years next week).

As far as I know, the CDC scheme is still in the hands of the Pensions Regulator. They have given themselves a maximum of 6 months to come to a decision whether to authorise the RM scheme. That will end sometime in April/May.

The cost of CDC/Nest is expected to be a bit higher than the current DBCBS/RMDCP, but still in the same ballpark.

The worst case scenario going forward would be for RM to ditch all current schemes and CDC altogether, and provide a pension with the bare minimum contribution level. That would save them £300+ Million per year.

The DBCBS was only supposed to be a short term transitional scheme and the longer it's in operation for, the less tax efficient it will become.

[Jaggs]

The DBCBS was only supposed to be a short term transitional scheme and the longer it's in operation for, the less tax efficient it will become.

If the DBCBS were to carry on for long enough that members were to build benefits of more than 30k would the only option be to take it as a lump sum at retirement?

As a defined benefit scheme if it was over 30k a financial advisor would need to be consulted to transfer out and they are always meant to assume that taking a pension as a defined benefit is the best in most cases.it might be hard to transfer to drawdown or an annuity

[RobertT]

I see it as a bit of a grey area!

Transferring a DB pension to DC normally means giving up valuable, guaranteed and index linked benefits both for yourself and your spouse until death. In return for a pot of cash with no guarantees whatsoever.

I think I read somewhere that only about 10% of IFA's actually have the qualifications to be able to transfer DB pensions and most will not be willing to do so, because they know in the majority of cases, it won't be in your best interests.
There will always be exceptions!

Those that do sign off a transfer, will charge a big fee because they'll take out insurance against you pursuing them for mis-selling sometime in the future.

The DBCBS is different to a normal DB scheme!

The amount of cash we build up via the DBCBS is defined as a guaranteed 19.6% of pensionable pay, plus discretionary bonuses, and once those bonuses are added, they're guaranteed too.

But when we actually access the money, it's treated in a very similar way to AVC's, which are DC benefits. The only difference being that if you take the DBCBS before 65 then it's reduced for early payment(unless some is being taken with NRA60).

Although the DBCBS is billed as a DB scheme, there isn't really any difference between having £40k(for example) in the DBCBS or £40k in Flexiplan.
It has the theoretical potential to be harder to transfer if over £30k, but in practice it shouldn't really make much difference as it's a pot of money rather than a pension.

I also suspect nobody at RM or RMPP expected the DBCBS to still be running after 5+ years and so the possibility wasn't even thought of.

[Trumanity]

I also suspect that they've now seen the £300 million plus savings in not bringing in the CDC scheme. Why bring in a scheme for staff you want rid off? Why bring in a scheme if administration is possibly around the corner? Why bring in a scheme when you want self-employed owner drivers and a gig economy workforce with no T&C's? However, Mr. Thompson et al will all have some super numbers in their executive SIPP's won't they?

[freespeech]

I also suspect that they've now seen the £300 million plus savings in not bringing in the CDC scheme. Why bring in a scheme for staff you want rid off? Why bring in a scheme if administration is possibly around the corner? Why bring in a scheme when you want self-employed owner drivers and a gig economy workforce with no T&C's? However, Mr. Thompson et al will all have some super numbers in their executive SIPP's won't they?

From a selfish perspective, at 57 and the intention to go at or before I'm 60 I'm in no rush to see the new pension in which I am likely to contribute for a couple of years max. Happy for the business to continue to throw 11.6% at DBCBS and continue with my AVC's.

[SpacePhoenix]

Has the legislation needed to enable CDC schemes finished going though parliament yet?

[RobertT]

Has the legislation needed to enable CDC schemes finished going though parliament yet?

Yes, it was all done by 1st August 2022.

RM have since applied to the Pensions Regulator for authorisation to start the scheme. We're now waiting on them.

[renrag40]

I also suspect that they've now seen the £300 million plus savings in not bringing in the CDC scheme. Why bring in a scheme for staff you want rid off? Why bring in a scheme if administration is possibly around the corner? Why bring in a scheme when you want self-employed owner drivers and a gig economy workforce with no T&C's? However, Mr. Thompson et al will all have some super numbers in their executive SIPP's won't they?

From a selfish perspective, at 57 and the intention to go at or before I'm 60 I'm in no rush to see the new pension in which I am likely to contribute for a couple of years max. Happy for the business to continue to throw 11.6% at DBCBS and continue with my AVC's.

Royal Mail actually pay 13.6% at present into thr DBCBS....... though I wouldn't bank on them continuing to do that for much longer........ and I cannot see them being willing to pay that into any new scheme. I don't care what they have previously said..... they have proved time after time in this present dispute that their promises mean nothing. It wouldn't surprise me if the staff end up with the bare minimum NEST pension.

[milly]

Our Pensions aren't safe at all, the whole financial system is imploding as we speak.
The Government are taxing us into poverty via inflation and will blame anybody other than themselves and the Bank of England.
I have been warning people on here for months but unfortunately most people suffer from recency bias.
Don't worry CBDC surveillance money is on the way to save us.
"You will own nothing and be happy"

[RobertT]

Bang goes the retirement plans of a nation!

[DonkeyOT]

Question for milly:
Do you have special permission to wear your tin foil hat, given it's not part of RM uniform?

[Hyrrokkin]

Our Pensions aren't safe at all, the whole financial system is imploding as we speak.
The Government are taxing us into poverty via inflation and will blame anybody other than themselves and the Bank of England.
I have been warning people on here for months but unfortunately most people suffer from recency bias.
Don't worry CBDC surveillance money is on the way to save us.
"You will own nothing and be happy"

Always nice to hear expert financial advice from milly - our resident professional doom monger in residence

[renrag40]

Question for milly:
Do you have special permission to wear your tin foil hat, given it's not part of RM uniform?

It's OK Nostradmus told her she could wear it.

[DonkeyOT]

Question for milly:
Do you have special permission to wear your tin foil hat, given it's not part of RM uniform?

It's OK Nostradmus told her she could wear it.