Official: CDC/RMCPP to launch on 7th October

[RobertT]

https://www.myroyalmail.com/collective-plan

*I suggest you click the above link to access the pages mentioned, as they don't seem to want the new RMCPP website to be linked to via other sites(see t&c's on RMCPP site).
There's also information and forms concerning how to opt in/out and how to pay AVC's.*

Royal Mail, the Communication Workers Union (CWU) and Unite CMA agreed that people working for Royal Mail Group Limited (including Parcelforce) should have a pension plan that gives them two things: an income for life and a lump sum. You can read the joint statement here.Opens in a new window

It’s called the Royal Mail Collective Pension Plan – or ‘the Collective Plan’ for short. It will be the first of its kind in the UK.

The Collective Plan will launch on 7 October 2024. Employees will receive communications in July 2024 about their pension options. The Collective Plan is for those who have over 12 months of continuous service with Royal Mail Group Limited (including Parcelforce). It will give members an income for life and a guaranteed lump sum on retirement.

​A corporate Trustee (the Trustee) has been appointed to run the Royal Mail Collective Pension Plan (the Collective Plan). The Trustee is made up of 9 Directors; some are professional Trustees, some work for Royal Mail and some are from the Unions. Whatever their background, in their role as a Trustee Director, they are independent of Royal Mail.

Resources for understanding the Collective Plan better

The Trustee has their own website where you can find information about the Collective Plan and the Directors. It includes a short video that explain the basics of how the Collective Plan works.

- Click here Opens in a new window to access the Collective Plan website.
- For more detailed information visit the Collective Plan HandbookOpens in a new window
- COMING SOON: For information about paying Additional Voluntary Contributions (AVCs) into the Collective Plan you will be able to visit the Additional Voluntary Contributions (AVCs) Handbook on the Collective Plan’s Scottish Widows AVC website

We also have the following resources internally to help you understand what this change means for you.

- Frequently asked questions (FAQs)
- Collective Plan Case Study
- Income for life deep dive
- Lump sum deep dive
- Pensions Helpdesk

Transitioning to the Collective Plan

When the Collective Plan launches (expected 7 October 2024), employees in the Royal Mail Pension Plan (RMPP) and those paying standard contributions to the Royal Mail Defined Contribution Plan (RMDCP) will automatically start contributing to the Collective Plan instead.

Others with over 12 months of continuous service will have the opportunity to opt into the Collective Plan.

At the same time, Royal Mail’s auto-enrolment pension plan will change from RMDCP to National Employment Savings Trust (NEST). This will mostly affect those employees reaching 3 months’ service (or when they meet the auto-enrolment eligibility criteria) who will go into NEST until 12 months’ continuous service when they will join the Collective Plan. However, NEST will also be available as an alternative pension arrangement to the Collective Plan.

https://www.myroyalmail.com/collective-plan

[posted]

wish I was Keith in that case study
Getting an "annual" lump sum of +£40k per year.


Nice

[Valentina@1]

Robert….can you advise me what’s best thing to do please,I’m 46 and been paying into pension 25 years

[Trumanity]

Robert….can you advise me what’s best thing to do please,I’m 46 and been paying into pension 25 years

Robert T is allowed to offer information and is very good at it. If you want advice you will need to engage with a professional adviser (IFA).

[friely]

I started in 1986 as a cadet and I started paying into the pension when I turned 18 in 1988.i was looking to cash in my nra60 next year when I turn 55 so my wife can reduce her work hours(Ill health)will this new system affect that or does this replace nra65 with a nra67 only

[RobertT]

Robert….can you advise me what’s best thing to do please,I’m 46 and been paying into pension 25 years

I'm not a financial advisor and can't give you individual advice, particularly with so little info.

The general rule of workplace pensions is to always join, because you're getting a contribution from your employer as well as from the tax man. If you have your own provision via a personal pension instead, you won't get any contributions from RM, nor would you benefit from salary sacrifice(PSE). Therefore your money would have to work much harder to keep up.

In simple money terms:
Each personal contribution of £100 going into a personal pension would cost you £80, with the rest being tax relief.
But that same £100 going into RMCPP would only cost you £72 because you also get the benefit of PSE. Plus RM put another £221(13.3%) into the pot.

There's also the Lump Sum Booster, where RM will match your additional 1% contribution.

The RMCPP has got it's faults because the pension you accrue can go down, which your existing NRA60/65 benefits won't as they're inflation proofed. Plus you have the NRA of 67 to consider.

It's not going to suit everybody, so my advice would be to do your homework, by reading all the info provided on the RMCPP website, and decide if it fits in with your retirement plans. Only you can answer that! Or else seek the advice of an IFA.

But my opinion is that nothing really beats the employer contributions and you should always join because of that.

[RobertT]

I started in 1986 as a cadet and I started paying into the pension when I turned 18 in 1988.i was looking to cash in my nra60 next year when I turn 55 so my wife can reduce her work hours(Ill health)will this new system affect that or does this replace nra65 with a nra67 only

Everything you've already accrued remains the same, there's no changes to NRA60, NRA65 or DBCBS. They can still be taken at those ages or before if you chose.

But from 7th October you'll be building a different type of pension and that will have an NRA of 67.

[Hyrrokkin]

Looks like AVC's will be done again by Scottish Widows - was hoping they would try a new provider...guessing it will be the same/similar fund choices.
I was hoping for more choice

[RobertT]

Looks like AVC's will be done again by Scottish Widows - was hoping they would try a new provider...guessing it will be the same/similar fund choices.
I was hoping for more choice

It looks like there will be 6 funds to chose from: https://digital.feprecisionplus.com/cor ... ory=4rmc23

The main difference with the new AVC's is they can't be used to fund the lump sum when taking your CDC pension, as the DBLS/lump Sum Booster is for that.

You'll effectively be paying into a personal pension(with the benefit of PSE), alongside your RM pension.

[derekm]

I’m 63 would it be worth while joining

[BenacreNick]

Of course Derek, why wouldn't you join for all of the above reasons.

[derekm]

Of course Derek, why wouldn't you join for all of the above reasons.

Cheers just thought with only a couple of years to go it wouldn’t be worthwhile.

[RobertT]

I’m 63 would it be worth while joining

If you look at page 54 of the Collective Plan Handbook available on the RMCPP website, it tells you what happens if you leave the RMCPP after less than 3 months, between 3 months and 1 year, or after more than 1 year.

There's few different scenarios which I'll let you look at yourself. But basically if you plan to be in the scheme for at least 3 months it's worth it because you'll be able to keep all contributions including RM's, which you can then transfer out.
If you're in it for a 1 year or more, you can take it, defer it or transfer it.

I think everyone should see their pension provision as a jigsaw, that you slowly put together over the course of your working life.

Some people will have multiple jobs over the course of time and have a different pension from each one. While posties with many years service might have 3 or 4 pensions from Royal Mail.

If you're a person who's had loads of jobs but opted out of the works pension every time because you're only expecting to stay a short time, where would your pension provision be now?

Some pensions might pay out more than others, but added together they provide your total income in retirement(plus the state pension). Generally speaking, most people would rather have a higher income than a lower one.

Obviously, the longer you're in the RMCPP the more you're going to get – that's obvious. But even a couple of years will still add something to your retirement pot.

Were you considering opting out of the current scheme for the last two years of service? If not, why would you opt out of the RMCPP?

[derekm]

I’m 63 would it be worth while joining

If you look at page 54 of the Collective Plan Handbook available on the RMCPP website, it tells you what happens if you leave the RMCPP after less than 3 months, between 3 months and 1 year, or after more than 1 year.

There's few different scenarios which I'll let you look at yourself. But basically if you plan to be in the scheme for at least 3 months it's worth it because you'll be able to keep all contributions including RM's, which you can then transfer out.
If you're in it for a 1 year or more, you can take it, defer it or transfer it.

I think everyone should see their pension provision as a jigsaw, that you slowly put together over the course of your working life.

Some people will have multiple jobs over the course of time and have a different pension from each one. While posties with many years service might have 3 or 4 pensions from Royal Mail.

If you're a person who's had loads of jobs but opted out of the works pension every time because you're only expecting to stay a short time, where would your pension provision be now?

Some pensions might pay out more than others, but added together they provide your total income in retirement(plus the state pension). Generally speaking, most people would rather have a higher income than a lower one.

Obviously, the longer you're in the RMCPP the more you're going to get – that's obvious. But even a couple of years will still add something to your retirement pot.

Were you considering opting out of the current scheme for the last two years of service? If not, why would you opt out of the RMCPP?

Cheers Robert

[Wullie10]

Is it worth starting a new AVC within this scheme as the most I'll put is about 4 years ? My old AVC will now cease and most of that was paid out as a lump sump at 60.