Advice: Royal Mail Defined Contribution Plan, RMDCP, Scottish Widows

[norris9]

I've been paying into the pension for almost 4 years now.... I finally logged into my pension account and I'm finally trying to understand it all....

2 questions:

1. I am paying in 6% of salary, Royal Mail 10%.... is this the maximum % I can put in? I cannot see an option to increase this, in the back of my mind I think I saw something where this % can be increased further after having the pension for 5 years? - or did I imagine it?


2. I have never amended where my pension is invested. The pension is automatically invested in something called a '10 Year Royal Mail Lifecycle Strategy'. Clicking on it and looking at it in more detail there are sub headings 'Blended Equity', 'Diversified Assets', 'Diversified Bond'... it is virtually all in 'Blended Equity', weirdly - a tiny amount (0.45%) is in cash - not sure why..... nothing is in Diversified Assets or Diversified Bonds. (screenshot shown below).

I don't really know how this 'Blended Equity' works in terms of.....I understand stock prices constantly rise and fall when the markets are open, is this Blended Equity the same? Shouldn't my pension pot be fluctuating up and down second by second, or does it work differently.

Also, is this a good place to keep my pension? obviously not looking for financial advice, just asking if this is pretty standard place to keep your pension pot, or is this unusual? I assume anyone on the same pension scheme as me would have had their money automatically put into this '10 year lifecycle strategy'.

Looking at a chart they show in a PDF document (image shown below) it looks like this fund has done ok in the 4 years I have been in it. Not sure if there is a 'live' chart where I can watch its performance?

[rogersh]

RM website: https://rmdcp.uk/
The answer to your first question is contained in the video hub on the link.
6% - 10% for service 1-5 years & also same video over 5 years
Choose
Help and How to
Understanding your benefit statement
Video Hub

Note; The video was made when "Zurich" were the administrators

[norris9]

RM website: https://rmdcp.uk/
The answer to your first question is contained in the video hub on the link.
6% - 10% for service 1-5 years & also same video over 5 years
Choose
Help and How to
Understanding your benefit statement
Video Hub

Note; The video was made when "Zurich" were the administrators

thanks....

So now gotta decide on 'Cash balance scheme' or sticking with the RMDCP....

Though I am not sure when I can make this choice. I think it's based on being part of the RMDCP for 5 years first....

When I joined Royal Mail I was auto signed up to RMDCP, but at some point (I cannot remember when) I chose to cancel it as I preferred my money going towards my mortgage than going towards a pension.....

Based on logging into my pension account it shows payments over the first 3 or 4 months of me being at Royal Mail and then they stop - so this must be where I cancelled.....but I was again auto signed up again to the pension after being at Royal Mail for 1 year....

up until now I had been confused as to why I had been paying into a pension when I had cancelled.....but it seems they just auto enrol you if you are not signed up after 1 year..... I am not complaining as in hindsight it's probably better to have the pension.

Anyhow.... I am wondering how this determines the 5 year mark for me. Do only the years/months I have been paying in count towards the 5 years, so that pause of ~6months doesn't count? - I assume no1 here will know....so I'll just wait and see. Not sure if I get a letter when 5 years is completed?

[rogersh]

I would be aware that the new CDC scheme is due to commence in the near future, possibly this year, but there has been no confirmation yet. CDC would replace the DBCBS scheme, which was only temporary.

Postman has provided links to all the pension plan websites in the "Stickies"
https://www.myroyalmail.com/2018pensionreviewqanda

Is there an option to remain in the DBCBS after the CDC scheme is introduced?

No. The DBCBS is a transitional arrangement that we are have put in place while we seek the necessary legislative and regulatory changes to enable a CDC scheme to be introduced. Assuming the necessary regulatory and legislative changes are made, the intention is that once the new arrangements are set up, members of the RMPP and RMDCP would automatically join the CDC scheme.

Also scroll to the bottom of the link for an explanation;
What improvements has the Company made to the RMDCP?

[yellowbelly]

RM website: https://rmdcp.uk/
The answer to your first question is contained in the video hub on the link.
6% - 10% for service 1-5 years & also same video over 5 years
Choose
Help and How to
Understanding your benefit statement
Video Hub

Note; The video was made when "Zurich" were the administrators

thanks....

So now gotta decide on 'Cash balance scheme' or sticking with the RMDCP....

Though I am not sure when I can make this choice. I think it's based on being part of the RMDCP for 5 years first....

When I joined Royal Mail I was auto signed up to RMDCP, but at some point (I cannot remember when) I chose to cancel it as I preferred my money going towards my mortgage than going towards a pension.....

Based on logging into my pension account it shows payments over the first 3 or 4 months of me being at Royal Mail and then they stop - so this must be where I cancelled.....but I was again auto signed up again to the pension after being at Royal Mail for 1 year....

up until now I had been confused as to why I had been paying into a pension when I had cancelled.....but it seems they just auto enrol you if you are not signed up after 1 year..... I am not complaining as in hindsight it's probably better to have the pension.

Anyhow.... I am wondering how this determines the 5 year mark for me. Do only the years/months I have been paying in count towards the 5 years, so that pause of ~6months doesn't count? - I assume no1 here will know....so I'll just wait and see. Not sure if I get a letter when 5 years is completed?

A bit more detail here: https://www.myroyalmail.com/pensions/ro ... ution-plan

At/approaching your five years WORKING for RM, the important factor re making the choice about DBCBS is having paid at least the minimum payments at the Standard contribution level into RMDCP for four continuous years. You'll get a letter nearer the time you qualify, so with respect to your circumstances and the date you appear to have joined RM, I think it's going to be at the point when you've contributed four years continuously into the RMDCP when it recommenced due to auto enrolment - so later on this year.

The thing you've got to consider (as well as between RMDCP and DBCBS) is if/when the new CDC might come in. If it's still happening it's likely to start at the beginning of a new financial year - it's obviously not going to be this year but could it be 2025? If so and you have only just joined the DBCBS you'd only have a small DBCBS pot - would it be worth investing into that both from an investment (and charges imposed on a small pension pot to which no further additions are allowed) and administrative point of view? Your going to have to do a bit of research/thinking.

Personally I stayed in the RMDCP as I thought after all the fanfare about CDC it was going to be brought in a couple of years after announcement and didn't want an additional small pension pot purely from the administrative point of view. Covid/the slow wheels of consultation and legislation put paid to that so a bit of an error on my part but you live and learn! I increased my AVC's into RMDCP as a small way of compensation.

[yellowbelly]

rogersh beat me to it re the CDC!

[norris9]

A bit more detail here: https://www.myroyalmail.com/pensions/ro ... ution-plan

At/approaching your five years WORKING for RM, the important factor re making the choice about DBCBS is having paid at least the minimum payments at the Standard contribution level into RMDCP for four continuous years. You'll get a letter nearer the time you qualify, so with respect to your circumstances and the date you appear to have joined RM, I think it's going to be at the point when you've contributed four years continuously into the RMDCP when it recommenced due to auto enrolment - so later on this year.

The thing you've got to consider (as well as between RMDCP and DBCBS) is if/when the new CDC might come in. If it's still happening it's likely to start at the beginning of a new financial year - it's obviously not going to be this year but could it be 2025? If so and you have only just joined the DBCBS you'd only have a small DBCBS pot - would it be worth investing into that both from an investment (and charges imposed on a small pension pot to which no further additions are allowed) and administrative point of view? Your going to have to do a bit of research/thinking.

Personally I stayed in the RMDCP as I thought after all the fanfare about CDC it was going to be brought in a couple of years after announcement and didn't want an additional small pension pot purely from the administrative point of view. Covid/the slow wheels of consultation and legislation put paid to that so a bit of an error on my part but you live and learn! I increased my AVC's into RMDCP as a small way of compensation.

Thanks for all of this. Rogersh + YellowBelly.

ok...four years is almost complete for me.

1. Why would the new CDC not come out this upcoming financial year - April 2024?

2. Aren't charges pretty low. I think I saw on my account statements I get charged a £2 or £3 fee a month. I understand that this will add up to around £500 to £700 total by the time I take my pension, but that doesn't bother me. The invested pension funds should cover that cost and more. Or am I missing something?

3. I am considering leaving Royal Mail sometime this year, not for certain, but I will be weighing up my options as the year passes.

4. I have not considered where to invest my pension. I believe I have 12 different funds to choose from.... I need to look closer at those and possibly move to something riskier. That said - the blended equity one has gone up 60% in 5 years....which is fairly decent.

5. The whole thing seems very confusing....RMDCP, Scottish Widows, CDC, Cash Balance Scheme...

6. The Cash Balance Scheme (what I can move to after 4 years) sounds interesting.... "The Cash Balance Scheme is a Defined Benefit scheme. As long as you don’t take the money in your pot until you’re 65, it guarantees that you’ll get all the money that you and Royal Mail have paid into it – no matter what happens to investments".....

So I can put all my pension money into some risky investments without taking on the risk? If that investment died a death all my original investment will be safe?

Is this Cash Balance Scheme a new thing? if not, they also mention you might get a bonus each year..... if anyone is already in this scheme - have you been getting yearly bonuses, and if so - how much?

[yellowbelly]

A bit more detail here: https://www.myroyalmail.com/pensions/ro ... ution-plan

At/approaching your five years WORKING for RM, the important factor re making the choice about DBCBS is having paid at least the minimum payments at the Standard contribution level into RMDCP for four continuous years. You'll get a letter nearer the time you qualify, so with respect to your circumstances and the date you appear to have joined RM, I think it's going to be at the point when you've contributed four years continuously into the RMDCP when it recommenced due to auto enrolment - so later on this year.

The thing you've got to consider (as well as between RMDCP and DBCBS) is if/when the new CDC might come in. If it's still happening it's likely to start at the beginning of a new financial year - it's obviously not going to be this year but could it be 2025? If so and you have only just joined the DBCBS you'd only have a small DBCBS pot - would it be worth investing into that both from an investment (and charges imposed on a small pension pot to which no further additions are allowed) and administrative point of view? Your going to have to do a bit of research/thinking.

Personally I stayed in the RMDCP as I thought after all the fanfare about CDC it was going to be brought in a couple of years after announcement and didn't want an additional small pension pot purely from the administrative point of view. Covid/the slow wheels of consultation and legislation put paid to that so a bit of an error on my part but you live and learn! I increased my AVC's into RMDCP as a small way of compensation.

Thanks for all of this. Rogersh + YellowBelly.

ok...four years is almost complete for me.

1. Why would the new CDC not come out this upcoming financial year - April 2024?

2. Aren't charges pretty low. I think I saw on my account statements I get charged a £2 or £3 fee a month. I understand that this will add up to around £500 to £700 total by the time I take my pension, but that doesn't bother me. The invested pension funds should cover that cost and more. Or am I missing something?

3. I am considering leaving Royal Mail sometime this year, not for certain, but I will be weighing up my options as the year passes.

4. I have not considered where to invest my pension. I believe I have 12 different funds to choose from.... I need to look closer at those and possibly move to something riskier. That said - the blended equity one has gone up 60% in 5 years....which is fairly decent.

5. The whole thing seems very confusing....RMDCP, Scottish Widows, CDC, Cash Balance Scheme...

6. The Cash Balance Scheme (what I can move to after 4 years) sounds interesting.... "The Cash Balance Scheme is a Defined Benefit scheme. As long as you don’t take the money in your pot until you’re 65, it guarantees that you’ll get all the money that you and Royal Mail have paid into it – no matter what happens to investments".....

So I can put all my pension money into some risky investments without taking on the risk? If that investment died a death all my original investment will be safe?

Is this Cash Balance Scheme a new thing? if not, they also mention you might get a bonus each year..... if anyone is already in this scheme - have you been getting yearly bonuses, and if so - how much?

See the new thread about CWU hoping the CDC will come in this year.....viewtopic.php?f=27&t=112771

[renrag40]

Just like the union were hoping it came in last year and year before that.... rinse and repeat.

[bolton1969]

Does anyone have a link to login to scottish widows or zurich or whoever is administrating the dc scheme Very confused!!!!!

[rogersh]

Does anyone have a link to login to scottish widows or zurich or whoever is administrating the dc scheme Very confused!!!!!

Main website(includes plan guide, etc): https://www.royalmailpensionplan.co.uk/

Royal Mail Defined Contribution Plan(RMDCP):

RM website: https://rmdcp.uk/


Scottish Widows/Money4Life(AVC valuations): https://money4life.scottishwidows.co.uk/employee/

Scottish Widows are the Administrators of the RMDCP (Zurich were originally).
All these links are in the STICKIES by Postman.


Also;
Scottish Widows
R M Service Team
PO B.Jx 28156
15 Dalkeith Road
Edinburgh
EH16 9DL
Telephone: 0800 092 8263

http://www.scottishwidows.co.uk/
save/royalmaildcplan

[bolton1969]

Thank you

[rogersh]

Looking at the date you joined this forum i wondered what scheme you were in ?
This information was posted by RobertT - Might be useful.

How many pension scheme?
Post by RobertT » Thu May 21, 2020 1:56 pm

Anyone who joined RM before 31st March 1987 would have joined the Post Office Superannuation Scheme(POSSS) – that was later renamed section A/B of the Royal Mail Pension Plan(RMPP). Those who joined before 1 December 1971 being in section A and those between then and 31st March 1987, being in section B.

Anyone joining RM between 1st April 1987 and 31st March 2008 would have gone into the Post Office Pension Plan(POPS) – that was later renamed section C the RMPP.
When RM was privatised, part of the deal was that the government took over the pension liabilities up to 31st March 2012 – that is called the Royal Mail Statutory Pension Scheme(RMSPS).

Everything accrued from 1st April 2012 to the present day is via the RMPP. Although we stopped building up any pension on 31st March 2018, since then we've just been building up a lump sum via the Defined Benefit Cash Balance Scheme(DBCBS) to take predominantly with our NRA65 benefits.

The benefits have accrued on a final salary basis up to 31st March 2008 and a Career Salary Defined Benefit(CSDB) basis from 1st April 2008 to 31st March 2018.

However benefits are paid out on a NRA60 & NRA65 basis, with NRA60 relating to service up to 31st March 2010 and therefore including all final salary benefits and the first two years of CSDB benefits.

NRA65 benefits are from 1st April 2010 to 31st March 2018 and relate to the other 8 years of CSDB. Plus the DBCBS.

Section A & B members have the choice to pay Additional Voluntary Contributions(AVC's) via Flexiplan, while section C and F(see below) members can pay into both Flexiplan and Bonusplan. AVC's are administered by Scottish Widows and are usually used to boost your tax free lump sum.

If you are in either sections A, B or C then you'll probably currently be paying into the DBCBS, unless you opted out, in which case you might be paying into the Royal Mail Defined Contribution Plan via Scottish Widows(formerly Zurich).

If you joined RM sometime after 1st April 2008, the chances are you'll have joined the RMDCP, unless you opted out. And for anyone reaching 5 years in the RMDCP, you will be given the opportunity to pay into the DBCBS via section F of the RMPP.

[yellowbelly]

This information was posted by RobertT - Might be useful.

What a financial and pensions guru RobertT was - hope he's well and enjoying the fruits of his knowledge
as he seems to be inactive on the boards now.