Accrural rates & AVC Pension Contributions

Hawkey99 · Post by **Hawkey99** » 16 Nov 2018, 11:11

Just a couple of general interest questions

Is there a difference between accrual rates between section B & C members. If so what are these rates please.

If you pay into AVCs does would this effect your Pensionable pay with regards to paying your pension. IE As your pension is based on a formula including one of your best of your last years should you not pay into AVCs in your last year to make sure you have the maximum pension. Hope that makes sense.

Thanks

Post by **RobertT** » 16 Nov 2018, 12:14

Hawkey99 wrote:Just a couple of general interest questions

Is there a difference between accrual rates between section B & C members. If so what are these rates please.

This info is in the plan guide so can be looked up quite easily!

But in basic terms up to to 2018, section B was worked out as 1/80ths of pensionable pay per year. While section C was 1/60ths.

The DBCBS is worked out as a total of 19.6% of pensionable pay.

Section C members and any ex RMDCP members who are now paying into the DBCBS under section F, will have the LED to factor in.

If you pay into AVCs does would this effect your Pensionable pay with regards to paying your pension. IE As your pension is based on a formula including one of your best of your last years should you not pay into AVCs in your last year to make sure you have the maximum pension. Hope that makes sense.

Thanks

Paying AVC's does not effect your pensionable pay. It just reduces your assessable pay for income tax and NIC's(via PSE) purposes.

Hawkey99 · Post by **Hawkey99** » 16 Nov 2018, 13:56

Many thanks.

"Section C members and any ex RMDCP members who are now paying into the DBCBS under section F, will have the LED to factor in."

Can you explain this a bit more please...

Post by **RobertT** » 16 Nov 2018, 14:27

Section C members and the new section F members, have the Lower Earnings Deduction taken off their pay before pension payments are made. It's been that way for section C'ers since in 1987!

Basic pay + any pensionable allowances – LED = pensionable pay

Hawkey99 · Post by **Hawkey99** » 22 Jan 2019, 09:24

I know its been posted but can't find it.

I believe we pay 6% into our pension and the company pay 13.6%.

My questions is how much of their 13.6% is actually cash being paid into our pension and what % of this is put to IHR benefits.

Many thanks

Post by **RobertT** » 22 Jan 2019, 13:34

Hawkey99 wrote:I know its been posted but can't find it.

I believe we pay 6% into our pension and the company pay 13.6%.

My questions is how much of their 13.6% is actually cash being paid into our pension and what % of this is put to IHR benefits.

Many thanks

Contributions into the DBCBS are currently:

Employee – 6% gross
Employer – 13.6%
Employer – 2% towards IHR and death in service

The planned contributions into the CDC/DBLSS scheme are:

Employee – 6% gross, with 4% going into CDC and 2% into the DBLSS
Employer – 13.6%, with 11.2% going into CDC and 2.4% into the DBLSS

Hawkey99 · Post by **Hawkey99** » 22 Jan 2019, 17:43

Thanks Robert so they ay 11.6% directly into our schemes ?

Post by **RobertT** » 22 Jan 2019, 19:03

Hawkey99 wrote:Thanks Robert so they ay 11.6% directly into our schemes ?

No! But I suppose I could have made it a bit clearer.

RM currently pay in 15.6% in total, with 13.6% going into the DBCBS and 2% going towards IHR and death in service.