Section c

[Barrybarry]

Hello can anyone explain what section c is our pension for people who started 89-90? Thanks

[RobertT]

Does this reply to a similar question last week, help: viewtopic.php?p=1069381#p1069381

For more detailed info, just look at the 'member guide to benefits' on the RMPP website.

[Barrybarry]

Thanks again Robert T

[the shadow 36]

Hi , just looking 4 some advice . As a section C member I'm looking at doing an AVC . It looks like I have 2 choices either bonus plan or flexiplan. Would anyone have any advice which would b the better option please . Thanks

[heapsy]

Hi , just looking 4 some advice . As a section C member I'm looking at doing an AVC . It looks like I have 2 choices either bonus plan or flexiplan. Would anyone have any advice which would b the better option please . Thanks

Both. But you will have to be quick. AVCs for the current schemes will close when the new pension comes in.

[NWpostie]

Hi , just looking 4 some advice . As a section C member I'm looking at doing an AVC . It looks like I have 2 choices either bonus plan or flexiplan. Would anyone have any advice which would b the better option please . Thanks

Both. But you will have to be quick. AVCs for the current schemes will close when the new pension comes in.

Which I believe is April 2023, 8 months of contributions I would be putting in the max possible within PSE, I believe the figure for full time postie is £115, your circumstance could differ.

I have been putting in £110 a week to build up a big lump sum so I won't have to sacrifice any part my pension pot to convert into a lump sum.

[RobertT]

Hi , just looking 4 some advice . As a section C member I'm looking at doing an AVC . It looks like I have 2 choices either bonus plan or flexiplan. Would anyone have any advice which would b the better option please . Thanks

I would echo the comments above. Do Both!
And then do both AVC options via the new CDC scheme when that starts – the Lump Sum Booster and DC AVC.

I wouldn't have been able to retire when I did, had I not paid AVC's. Although I started mine back in the mid 90's(section C).

AVC's benefit from tax relief and PSE(as long as you're within the limits), just as your regular pension payments do. Meaning each £1 gross contribution(the amount on your wage slip) only actually costs 68p, with your income tax bill being reduced by 20p and your NIC's by 12p.

The contributions into Bonusplan are very small at just a maximum of around £300 per year, including RM's share.
Flexiplan doesn't benefit from any employer contributions, but you can put in a lot more of your own money. Plus you'll still get the same tax breaks!

Even with the CDC scheme coming in fairly soon, paying into the current AVC's is a great way to give your Age60 and/or your Age65 pensions a boost while you still can. Because you won't be able to pay into either Bonusplan or Flexiplan afterwards.

If you haven't already signed up to pay your forthcoming lump sum/s into Flexiplan then do so, because you're unlikely to get another chance.

We don't yet know when the CDC pension will start, as it's reliant on the latest batch of legislation. That relates to multi employer schemes, which presumably applies because of the splitting up of the businesses under the wing of IDS.

I'm no expert on the legal stuff, but my understanding is the plans first need to be included in the next Kings Speech, which is due in November 2023. That sets out the planned legislation over the coming year.
Then time in the parliamentary calendar needs to be found to debate it.
Only once it's passed it's way through both the houses of Commons and Lords and received Royal Assent, does it become law.

It'll probably then take a few months to actually set up the finer points of the scheme, with mailings sent out informing you of the details, etc.
My personal prediction, would be a start date of no earlier than May/June 2024.

More info on AVC's is here:https://www.royalmailpensionplan.co.uk/ ... -benefits/
CDC info here: https://www.myroyalmail.com/collective-plan

[the shadow 36]

Ok , thanks everyone would that mean if I started an AVC now with the current scheme it would continue going forward or would it close when the current pension scheme ends. Thanks again

[Hyrrokkin]

Hi , just looking 4 some advice . As a section C member I'm looking at doing an AVC . It looks like I have 2 choices either bonus plan or flexiplan. Would anyone have any advice which would b the better option please . Thanks

Both. But you will have to be quick. AVCs for the current schemes will close when the new pension comes in.

Which I believe is April 2023, 8 months of contributions I would be putting in the max possible within PSE, I believe the figure for full time postie is £115, your circumstance could differ.

I have been putting in £110 a week to build up a big lump sum so I won't have to sacrifice any part my pension pot to convert into a lump sum.

It is a no brainer as they say - my regret is not starting AVC's sooner (seems to be a common theme)
I do both schemes and putting the max i can into Flexiplan/Bonusplan - as well as a SIPP
When the new scheme starts i will be putting the max into those schemes as well (and max into the main scheme)
Most workmates have never heard of AVC's never mind joined up - which is a shame
I have tried to spread the gospel but most not interested - which is their choice...the wrong one as far as i am concerned

[Hyrrokkin]

Ok , thanks everyone would that mean if I started an AVC now with the current scheme it would continue going forward or would it close when the current pension scheme ends. Thanks again

The currrent AVC scheme closes when CDC begins...but a new AVC scheme will start up tied to the CDC scheme - details of that have not been decided or released yet

[robking]

As well as AVCs, The CDC scheme is also going to have an option to pay an extra 1% matched by Royal Mail.
You'd have to be an absolute madman not to take advantage of that, if you're a basic rate taxpayer, each £1 actually costs you an extra 68p after tax and NI relief and when you claim it you can have 25% that's 50p of each total £2 as a tax free lump sum.
This means that you'll have £1.50 in the £ invested towards a future income for life for an effective cost of 18p in the £

[RobertT]

Ok , thanks everyone would that mean if I started an AVC now with the current scheme it would continue going forward or would it close when the current pension scheme ends. Thanks again

The currrent AVC scheme closes when CDC begins...but a new AVC scheme will start up tied to the CDC scheme - details of that have not been decided or released yet

As previously said, there is expected to be two ways to pay extra via the CDC scheme – the Lump Sum Booster and DC AVC's. Details are in the link I provided upthread!
The DC AVC will almost certainly be very similar to Flexiplan, although the provider won't necessarily be Scottish Widows!

This is what they say about AVC's:

What happens to my AVCs when the Collective plan starts?

If you are currently making Additional Voluntary Contributions (AVCs) into RMPP or RMDCP, these would automatically stop when the Collective Plan launches. They would remain invested as they are now until you take your benefits or choose to transfer them out.

You would be written to around three months before the new Collective plan starts to give you further information on the new AVC arrangements and how you can make AVCs into the Collective Plan. You would have two options – the Lump Sum Booster and defined contribution AVCs.

More detail about AVCs can be found on pages 11 and 12 of the booklet you received in the post.

[RobertT]

As well as AVCs, The CDC scheme is also going to have an option to pay an extra 1% matched by Royal Mail.
You'd have to be an absolute madman not to take advantage of that, if you're a basic rate taxpayer, each £1 actually costs you an extra 68p after tax and NI relief and when you claim it you can have 25% that's 50p of each total £2 as a tax free lump sum.
This means that you'll have £1.50 in the £ invested towards a future income for life for an effective cost of 18p in the £

The Defined Benefit Lump Sum Scheme is actually designed to fund all the tax free cash, not just 25% of it. If the DBLS is more than 25% of the CDC pot value, then tax would be paid on the excess, in a similar way to the DBCBS now.

Like any pension that your employer pays into, the Lump Sum Booster is a no brainer!

[the shadow 36]

Thanks 4 the sound advice , will start a avc then ASAP
And will b on the ball with the other options when any new pension starts