Deferred Benefits Statement up 3%

[NorthernBoy]

For info

For those waiting for their annual benefit statement, mine arrived yesterday and showed an increase of 3.2% (on nra 60 and 65 benefits / not the supplement)

To give this some context this compares to last years 1% increase and 0% the year before. I’m a member of pension plan c, split between nra 60 and nra 65 benefits.

Regards

[FAB]

That sounds like they used CPI to calculate it. But Section C should be RPI both when active or deferred and in payment. Only sections A/B go from RPI to CPI if you become deferred.

Active deferred members differ from deferred members in that their pension entitlements receive revaluation
based on the Retail Price Index (RPI) while they are still employed by the Royal Mail or Post Office. Once they
leave RMPP service and become deferred members, revaluation for section A and B members is based on
the Consumer Prices Index (CPI). Section C members continue to receive revaluation based on the RPI.

For section A and B members, in accordance with scheme regulations, eligible pensions in payment and
deferred benefits were increased in April 2017, reflecting the 1.0% increase in the CPI for the year ended
September 2016. No discretionary increases were awarded.
For section C members, in accordance with scheme regulations, eligible pensions in payment and deferred
benefits were increased by 2.0% in April 2017, reflecting the change in the RPI for the year ended September
2016 (capped at 5.0%). No discretionary increases were awarded.

This was taken from the Royal Mail Statutory Pension Scheme Annual Report and Account 2017–18.

[RobertT]

FAB: those figures are from the 2016/17 accounts!

The 2017/18 accounts say this:

Pension Increases

Section A/B members – in accordance with the Trust Deed, eligible pensions in payment and deferred benefits were increased by 3.0% in April 2018. This reflected the change in CPI for the year ended 30 September 2017. No discretionary increases were awarded.

Section C members – in accordance with the Trust Deed, eligible pensions in payment were increased by 3.9% in April 2018. This reflected the change in RPI for the year ended 30 September 2017. No discretionary increases were awarded.

The accounts for anyone else interested can be found online here.

With regards to the annual RPI increases for section C, it's also important to factor in the Guaranteed Minimum Pension(GMP) element of our benefits.

In the section C guide ' your options as a deferred member in the scheme' it says:

Will my preserved benefits increase?

Your preserved benefits will typically start to be paid when you reach Normal Retiring Age which is age 60 for the part of your benefits based on your pensionable service before 1 April 2010 and age 65 for the part of your benefits based on your pensionable service on or after 1 April 2010.

Until your preserved benefits are paid, the part that does not relate to Guaranteed Minimum Pension (GMP) will be increased by us each year in accordance with Revaluation Regulations under the Pension Schemes Act 1993. The GMP part of your preserved benefits will be increased in line with statute and regulations relating to GMPs.

I'm no expert on the GMP part, but I believe there's currently a cap of 3% on the increases applied to it. As this link seems to confirm.

Increases for deferred section A/B are slightly different:

Will my preserved benefits increase?

Your preserved benefits will typically start to be paid when you reach Normal Retiring Age which is age 60 for the part of your benefits based on your reckonable service before 1 April 2010 and age 65 for the part of your benefits based on your reckonable service on or after 1 April 2010.

Until your preserved benefits are paid, they will be increased by us each year in line with Pension Increase (Review) Orders, which are issued by the Government.