MRM.COM : Your pension what is happening from 1 April 2018?

[POSTMAN]

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Royal Mail is putting in place transitional pension arrangements from 1 April 2018. These will be in place as we seek the necessary legislative and regulatory changes which would allow us to introduce a Collective Defined Contribution (CDC) scheme.

Pension scheme members will automatically start building up benefits under one of our transitional arrangements from 1 April 2018.

Some members have returned the form in their home mailing telling us they want to build up benefits in a different transitional arrangement from the one they would have been automatically enrolled into. If they returned their form before 19 March 2018, their choice will take effect from 1 April 2018. Members can return their form at any time after that date, and their choice will come into effect from the next available payroll date after their form is received.

Here is a reminder of the transitional arrangements from 1 April 2018. If you have further questions, take a look at the Q&A here: https://www.myroyalmail.com/2018pensionreviewqanda" onclick="window.open(this.href);return false;.

RMPP members

RMPP will close to future accrual in its current form on 31 March 2018.

A new Defined Benefit Cash Balance Scheme (DBCBS) will be set up as part of RMPP. Under the DBCBS, the Company guarantees a minimum lump sum at age 65, based on Company and member contributions. DBCBS will aim to provide increases to the lump sum each year, depending on investment performance. Unless they have told us otherwise, RMPP members will automatically join the DBCBS from 1 April 2018.

If preferred, RMPP members can instead opt to join the improved Royal Mail Defined Contribution Plan (RMDCP). By doing this they would be leaving the RMPP – please see page 13 of the booklet sent to RMPP members in February for more information about this. To join the improved RMDCP instead, RMPP members should return the ‘Joining RMDCP’ form in their home mailing. You can do this at any time, and your choice will come into effect from the next available payroll date after your form is received.

RMDCP members

We’re making improvements to the RMDCP. The Company’s standard level contributions will be increased by one percentage point across each tier, up to a maximum of 10%. From 1 April, unless they have told us otherwise, RMDCP members in the standard section will automatically move to the highest contribution tier.

If you do not want to contribute at the highest tier, you can opt to contribute at a lower rate. To do this, you should return the ‘RMDCP contribution level’ form in your home mailing. You can do this at any time, and your choice will come into effect from the next available payroll date after your form is received.

RMDCP members with a minimum of five years’ service

RMDCP members with a minimum of five years’ service, including four years’ continuous service at the standard level of contributions, can instead choose to join the DBCBS. To do this, you should return the ‘Joining DBCBS’ form in your home mailing. You can do this at any time, and your choice will come into effect from the next available payroll date after your form is received.

You should read the booklet sent to your home address before making a choice about which transitional arrangement is right for you. Your options will depend on which scheme you are in and your length of service. If you are unsure about which scheme is right for you, you may wish to seek independent financial advice. The Company and the Trustees cannot provide you with financial advice.

This article is provided for information purposes only and does not guarantee or change your benefits. Benefits under Royal Mail retirement benefit arrangements are subject always to the governing provisions of the relevant plan in force from time to time. Royal Mail reserves the right to amend, suspend or withdraw all or any of its retirement benefit arrangements and/or Pension Salary Exchange at any time.