Pension and coronavirus

TheStrangler · Post by **TheStrangler** » 23 Mar 2020, 11:21

Probably a silly question but anyway here goes...
What effect would the current crisis have on the Rm pension?
For example could the sums quoted in an illustration of a year ago be less now given all the instability of the market etc?
Or if you were receiving your pension already could that go down as a result of all this?

Post by **RobertT** » 23 Mar 2020, 13:54

Anything is technically possible, but all your RMSPS and RMPP pension benefits up to 31st April 2018 are defined benefit, so they're based on your pay and length of service.
The Cash Balance is also DB.

The RMSPS is backed by the government/taxpayer.
The RMPP is RM's responsibility and although some of the investments have probably gone down, it's up to RM to make up any shortfall. The last I heard the RMPP had a fairly large surplus.

So in theory none of our DB pensions should be affected by Covid-17, but in a 'world war 3 scenario', who knows?

If you're in the RMDCP or have AVC's, then you've probably already noticed a reduction in your savings.

TheStrangler · Post by **TheStrangler** » 23 Mar 2020, 18:29

Thank you Robert.

Post by **Judgee** » 24 Mar 2020, 00:18

I'm in the rmdcp pension. My pot has gone down 25% in the last month, shame really it was doing well this year. So now it works out that I have paid £4000 into it in the last year and it's worth exactly the same as it was this time last year!

But I do have a couple of decades for it to recover and unless you are retiring in the next year it should bounce back!

Post by **rambo1** » 25 Mar 2020, 19:52

Judgee wrote:I'm in the rmdcp pension. My pot has gone down 25% in the last month, shame really it was doing well this year. So now it works out that I have paid £4000 into it in the last year and it's worth exactly the same as it was this time last year! But I do have a couple of decades for it to recover and unless you are retiring in the next year it should bounce back!

Don't worry. The markets will recover over the next 5 yrs, although it's a bit unknown what effect the virus will have as it's really only just getting going. There will be recession worldwide no doubts and all this money the nations are pumping to prop up the economy will have to be accounted for somehow, sometime. If you have 20 yrs I'm sure you'll be ok, Don't get too hung up on looking at it for a while. £4k may seem alot but believe me we've seen ten times that in losses over the last 3 weeks in our shares isa. Investing is risky but if you invest in large well run companies, should pay in the long term.

Post by **stephen500** » 26 Mar 2020, 08:46

I did a bit of research on the state of the RMPP and according to the plan, the RMG section of the plan has assets of £7,134 million and liabilties of £5,710 million, giving us a surplus of £1,424 million (2017).
Also the mix of investments showed that 63.7% were invested in "Hedging assets, derivatives and collateral".
A basic google search of these terms appear to confirm that all of these types of investments are designed to protect the fund from wild swings, particully "hedging assets".
Robert T could prob enlighten us more.
But having read from the web page below on the surplus and then types of investments they make, I am reasonably happy that our RMPP pensions are protected.
The RMSPS is also paid directly by government.
[url https://www.royalmailpensionplan.co.uk/ ... counts.pdf" onclick="window.open(this.href);return false; /url]

Post by **windermeredave** » 17 Apr 2020, 11:01

One thing you could always depend on before these people took over was that the pension increase letters were sent out in plenty of time. not any more.

Post by **Steve_claret** » 17 Apr 2020, 16:33

windermeredave wrote:One thing you could always depend on before these people took over was that the pension increase letters were sent out in plenty of time. not any more.

Unfortunately Capita can't process age activated pensions on time now that they have taken all of the RMSPS work on from the PSC so I would have thought that letting members know what increase they are getting this year wouldn't be top of their to do list. You could try emailing them at enquiries@rmsps.co.uk

FAB · Post by **FAB** » 17 Apr 2020, 18:20

The increase this year is A/B scheme 1.7%. Section C 2.4%. Or pro rata if you are just starting to take your pension this year.

Post by **Steve_claret** » 18 Apr 2020, 11:06

FAB wrote:The increase this year is A/B scheme 1.7%. Section C 2.4%. Or pro rata if you are just starting to take your pension this year.

It always seems wrong to me that A/B members get the lower CPIH. I know A/B pensions tend to be better than scheme C but at the end of the day the rate of inflation is still the same regardless of which pension scheme you are in.

Post by **stephen500** » 18 Apr 2020, 17:28

Steve_claret wrote:
FAB wrote:The increase this year is A/B scheme 1.7%. Section C 2.4%. Or pro rata if you are just starting to take your pension this year.
It always seems wrong to me that A/B members get the lower CPIH. I know A/B pensions tend to be better than scheme C but at the end of the day the rate of inflation is still the same regardless of which pension scheme you are in.

But section B get RPI before they take their pension, I am not sure that section C get the same.

Post by **postman1979** » 21 Apr 2020, 17:52

Got my NRA 60 lump sum bang on time. No where to spend any of it. Will celebrate my birthday in isolation.

Post by **stephen500** » 22 Apr 2020, 00:21

postman1979 wrote:Got my NRA 60 lump sum bang on time. No where to spend any of it. Will celebrate my birthday in isolation.

When you say to time, I presume you mean you got it on your 60th birthday. Great to hear some one has it on time. Enjoy retirement

renrag40 · Post by **renrag40** » 22 Apr 2020, 00:35

Steve_claret wrote:
FAB wrote:The increase this year is A/B scheme 1.7%. Section C 2.4%. Or pro rata if you are just starting to take your pension this year.
It always seems wrong to me that A/B members get the lower CPIH. I know A/B pensions tend to be better than scheme C but at the end of the day the rate of inflation is still the same regardless of which pension scheme you are in.

As far as I’m aware Section B get RPI increases before the pension is taken then CPI increases after the pension is taken.
Section C get RPI increases both before and after the pension is taken.

Post by **RobertT** » 22 Apr 2020, 04:04

If you're a employee member section A, B & C increase by RPI.

If you're a deferred member section A, B & C increase by CPI.

If you're a pensioner member section A & B increase by CPI, section C by RPI.

The DBCBS increases at the same rate whether you're an employee or deferred. The rates are at the discretion of RM and are currently set as in excess of CPI with a cap of 4% above CPI.