Final Salary

Wednesday · Post by **Wednesday** » 12 May 2017, 18:52

I have got the chance to be made up to 39 hours.Seeing as the final salary scheme closes next year would taking this increase my pension?

Post by **TrueBlueTerrier** » 12 May 2017, 18:56

Wednesday wrote:I have got the chance to be made up to 39 hours.Seeing as the final salary scheme closes next year would taking this increase my pension?

Yes. Even with the changes, you will be earning more so you will pay more into whatever pension you have at the moment and whatever replaces it next year. (Also RM will be paying in more because of your new hours).

Wednesday · Post by **Wednesday** » 12 May 2017, 19:36

TrueBlueTerrier wrote:
Wednesday wrote:I have got the chance to be made up to 39 hours.Seeing as the final salary scheme closes next year would taking this increase my pension?

Yes. Even with the changes, you will be earning more so you will pay more into whatever pension you have at the moment and whatever replaces it next year. (Also RM will be paying in more because of your new hours).

Yes I understand that but as its called a final salary pension will my benefits not be greater as my final salary would be based on 39 hours not 34?

FAB · Post by **FAB** » 13 May 2017, 14:53

The final salary pension actually closed in 2008. It is the replacement career average pension that closes next year. If you were with RM before 2008 them any of that pension which you would get at 60 would be based on whatever you salary is up to 31st March 2018. The career average pension stopped increasing with your actual salary from March 2014 and now goes up with inflation instead. So when you go full time this year it would affect any 60 pension but not the 65 part. HTH...

BeamishStout · Post by **BeamishStout** » 13 May 2017, 16:31

Wednesday wrote: Yes I understand that but as its called a final salary pension will my benefits not be greater as my final salary would be based on 39 hours not 34?

Yes the final salary pension/supplement (aka NRA 60 benefit) is based on your service up to 31st March 2008 and linked to your current pensionable salary (taken from the nutshell booklet illustration). So I'd say your NRA60 benefits are likely to enhanced somewhat. Your NRA65 benefits under the current scheme will get a small boost (just a few quid I'd say) but as this scheme looks like being booted into touch from 2018 then it would only affect the CSDB block for this financial year.

So if you have pension pre-dating 2008 from RM then going to 39 hours will see an improvement.

Post by **RobertT** » 13 May 2017, 16:36

The final salary pension did indeed close to future accruals on 31st March 2008 and was replaced by the current CARE/ CSDB scheme.
However, as Beamishstout says, if you increase or decrease your hours then that would be mirrored in your final salary(pre 2008) pensionable pay.

Equally under the CARE scheme, any increase in hours would mean you’re accruing pension at a faster rate.

But at the same time yearly increases in our pensions were de-linked from pay from 2014 and currently go up with RPI inflation up to a maximum of 5%. So if we don’t get a pay rise, our pensions will still increase.

We did receive one of those big red books on the subject in February 2014. It is available to view online here: https://www.myroyalmail.com/2014%20RM%20Pension%20Plan" onclick="window.open(this.href);return false;

Going forward, the original DC pension proposal from RM stated that from 2018, pre 2008 final salary section C pension would stop being linked with pay and increase with RPI inflation instead. So any increase or decrease in hours after April 2018 shouldn’t have any effect on the DB pension you’ve accrued up to then. Although whether that will still happen under the new cash balance proposal is unknown.

Post by **tinkerdil** » 14 May 2017, 03:27

As for section A/B members, their final salary pension will continue to be linked to pay, so increased hours or a decrease will have an impact on NRA60. And the proposed cut in pensionable allowances will have a significant reduction, particularly for those under 50yrs old, in their final salary pension. Can anyone confirm or correct me please.

Post by **RobertT** » 15 May 2017, 06:59

tinkerdil wrote:As for section A/B members, their final salary pension will continue to be linked to pay, so increased hours or a decrease will have an impact on NRA60. And the proposed cut in pensionable allowances will have a significant reduction, particularly for those under 50yrs old, in their final salary pension. Can anyone confirm or correct me please.

That’s how I understand it!

k979aaa · Post by **k979aaa** » 17 May 2017, 17:44

Wednesday wrote:I have got the chance to be made up to 39 hours.Seeing as the final salary scheme closes next year would taking this increase my pension?

Got news for you it closed in 2008 we are now in the defined contribution scheme!

Post by **RobertT** » 17 May 2017, 19:00

k979aaa wrote:
Wednesday wrote:I have got the chance to be made up to 39 hours.Seeing as the final salary scheme closes next year would taking this increase my pension?
Got news for you it closed in 2008 we are now in the defined contribution scheme!

If you joined RM after 1st April 2008 you'll be in the DC scheme. If you joined before that, you'll still be in the DB scheme, unless you opted out before that date.

Lefantum · Post by **Lefantum** » 18 May 2017, 14:42

k979aaa wrote:
Wednesday wrote:I have got the chance to be made up to 39 hours.Seeing as the final salary scheme closes next year would taking this increase my pension?
Got news for you it closed in 2008 we are now in the defined contribution scheme!

As previously stated. NRA 60 Final Salary. Will continue to be linked to pay. IE. You reach 60 in 2027. Your final salary pensionable pay will be used to calculate your NRA60. Your final salary pay didn't stop in 2008 only the benefit calculation formula for that plan. Hence if our Pensionable allowances are taken away. Your final salary pensionable calculation will take a massive hit come retirement. On top of losing our DB scheme.