Keeping Current Scheme Open

[Hawkey99]

Doe to the sudden rush rush of doing a deal and the legislation required to implement is there any possibility that the current scheme will remain open for one more year.

Any thoughts ??

[heapsy]

Zero I would have thought. RM have already stated that the surplus money is running out. Sadly I think people need to face facts and accept they will get less. Diversifying and investing away from work is probably best, but almost certainly not a cheap option. I seem to remember, although I'm certain I never got asked, that RM said we turned down the option of paying more into the pension, in order to keep the Final Salary pension open. I could be wrong.
From what I hear in our office, most just couldn't care less about pensions. They're boring apparently. Having said that, one or two are now beginning to realise they might not have enough. There's no pleasing some people. Unfortunately, people need to realise there is no such thing as a free lunch.

[Hawkey99]

Fully agree about it closing longer term but I was meaning it staying open for 1 year to allow them to set up a new scheme in a reasonable time scale.

Every one in my office always waxes lyrical about taking their lump sums and smaller pension when they retire.

Not the scenarios Im following but each to their own.

[TrueBlueTerrier]

No, the scheme will close, RM and the CWU are already discussing transitional arrangments. There is a slim chance it may stay open for a few months but no longer than that I think.

[RobertT]

Doe to the sudden rush rush of doing a deal and the legislation required to implement is there any possibility that the current scheme will remain open for one more year.

Any thoughts ??

It will be the summer at the earliest before the required legislation is in place for the introduction of the proposed CDC scheme. As previous changes to the RMPP have always seemed to have happened from April, I would assume an implementation date of 1st April 2019 if all goes well.

It’s already been stated that the RMPP will close and there will be a transitional Cash Balance scheme until the CDC pension comes in. Personally I see no reason to think that might change!
Unless RM have got something up their sleeve, to try and ensure a yes vote? It’s possible but I doubt it!

[RobertT]

Zero I would have thought. RM have already stated that the surplus money is running out. Sadly I think people need to face facts and accept they will get less. Diversifying and investing away from work is probably best, but almost certainly not a cheap option. I seem to remember, although I'm certain I never got asked, that RM said we turned down the option of paying more into the pension, in order to keep the Final Salary pension open. I could be wrong.

If my memory serves me correctly, RM did look at the possibility of increasing members contribution rates, but didn’t go ahead with it because it wouldn’t go down well with us and that it wouldn’t have made much difference anyway. Both of which are true!

From what I hear in our office, most just couldn't care less about pensions. They're boring apparently. Having said that, one or two are now beginning to realise they might not have enough. There's no pleasing some people. Unfortunately, people need to realise there is no such thing as a free lunch.

Your office sounds like mine and is probably typical of many workplaces up and down the country.

A lot of people seem to think their pensions will just fall into place when they want to retire or that the state will take care of them. Unfortunately many people will be working well into their 60’s and maybe into their 70’s, unless they wake up to reality.

[RobertT]

Fully agree about it closing longer term but I was meaning it staying open for 1 year to allow them to set up a new scheme in a reasonable time scale.

Every one in my office always waxes lyrical about taking their lump sums and smaller pension when they retire.

Not the scenarios Im following but each to their own.

Over the course of an average retirement, taking a larger pension will almost always be the best financial choice over time, although obviously commutation factors come into it aswell!
Sadly a lot of people just see the £££, think they’re rich and go on a spending spree. But as you say, each to their own.

[fishtank]

Members should look at other options to build up lump sums, as life expectancy increases and with the outlook for interest and mortgage rates remaining low taking part of your main pension as a lump sum looks more and more like the wrong choice unless you're going to use it to pay down some very, very expensive and substantial long-term debt.

[FAB]

Fully agree about it closing longer term but I was meaning it staying open for 1 year to allow them to set up a new scheme in a reasonable time scale.

Every one in my office always waxes lyrical about taking their lump sums and smaller pension when they retire.

Not the scenarios Im following but each to their own.

Over the course of an average retirement, taking a larger pension will almost always be the best financial choice over time, although obviously commutation factors come into it aswell!
Sadly a lot of people just see the £££, think they’re rich and go on a spending spree. But as you say, each to their own.

A guy at my office who is going next year intends to take the maximum lump sum from his Section B pension and put it into Premium Bonds. His reason is he just does not trust RM anymore and wonders whether they could stop or reduce his pension payments in the longer term.. Which I suspect is a fear a lot of posties might have.

[fishtank]

I think the latest position is that in an effort to move things along Royal Mail has even offered help in framing the new regulations, there's still some ( faint) hope that there could be a move directly between the two but if a transition period is required it will be the cash balance scheme.

I personally don't think there's any chance of the current scheme remaining open beyond April but since we're in new territory it's difficult to rule anything in or out.