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Pensions
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notts1862
- MAIL CENTRES/PROCESSING
- Posts: 132
- Joined: 07 Feb 2013, 08:39
- Gender: Male
Pensions
I know theres lot of issues to iron out but one that baffles me is Pension. Yes i have had my pension plan/booklet but come on you might as well written it in chinese. I am so confused. Anyone with an easy idiot guide to explain the difference and losses or gains. Thanks.
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barrowc
- EX ROYAL MAIL
- Posts: 383
- Joined: 12 Mar 2010, 01:36
- Gender: Male
Pensions
Good points of the cash balance proposal:
* don't need to give up any pension to take a lump sum when you retire
* Royal Mail guarantee that it won't lose money and some investment gains might be added on and guaranteed
Bad points of cash balance proposal:
* from April 2018 onwards, no longer generating actual weekly pension - just a lump sum
* only 25% of your entire pension pot can be taken as a tax-free lump sum. Younger members are likely to generate far in excess of that amount and, with the excess, will either have to buy an annuity (currently at terrible rates) or take regular taxable amounts from their pension pot. People with large amounts of AVCs could also have issues
* not enough clarity on how guaranteeing the investment gains would work. It's very obviously in Royal Mail's interest to guarantee as little as possible
Royal Mail want to transfer almost all of the pension risk from them to us. From 2018, rather than building up a guaranteed pension, we would be building up a pot of money which might or might not be enough to get you a decent lump sum and/or pension. People are concerned that, because of the guarantees, Royal Mail will go for very safe investments that could result in very limited growth in the value of your pension pot
* don't need to give up any pension to take a lump sum when you retire
* Royal Mail guarantee that it won't lose money and some investment gains might be added on and guaranteed
Bad points of cash balance proposal:
* from April 2018 onwards, no longer generating actual weekly pension - just a lump sum
* only 25% of your entire pension pot can be taken as a tax-free lump sum. Younger members are likely to generate far in excess of that amount and, with the excess, will either have to buy an annuity (currently at terrible rates) or take regular taxable amounts from their pension pot. People with large amounts of AVCs could also have issues
* not enough clarity on how guaranteeing the investment gains would work. It's very obviously in Royal Mail's interest to guarantee as little as possible
Royal Mail want to transfer almost all of the pension risk from them to us. From 2018, rather than building up a guaranteed pension, we would be building up a pot of money which might or might not be enough to get you a decent lump sum and/or pension. People are concerned that, because of the guarantees, Royal Mail will go for very safe investments that could result in very limited growth in the value of your pension pot
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Decky Boy
- Posts: 440
- Joined: 22 May 2009, 10:00
- Gender: Male
Pensions
Yes... we're all about to get "stitched-up" ! ! !notts1862 wrote:I know theres lot of issues to iron out but one that baffles me is Pension. Yes i have had my pension plan/booklet but come on you might as well written it in chinese. I am so confused. Anyone with an easy idiot guide to explain the difference and losses or gains. Thanks.