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DB Cash Balance scheme increase

Royal Mail pension news and discussion.Please note the advise given in this forum is unofficial, please use the links we have for a more detailed response or see an independent financial adviser.
fly-catchers
EX ROYAL MAIL
Posts: 573
Joined: 05 Oct 2008, 16:38
Gender: Male

DB Cash Balance scheme increase

Post by fly-catchers »

1.7% increase from 1st April 2021.


https://www.royalmailpensionplan.co.uk/news
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Hawkey99
Posts: 568
Joined: 23 Oct 2011, 11:19
Gender: Male

Re: DB Cash Balance scheme increase

Post by Hawkey99 »

Sounds like a pretty rubbish return.......???
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RobertT
EX ROYAL MAIL
Posts: 6644
Joined: 09 Sep 2007, 14:26
Gender: Male

Re: DB Cash Balance scheme increase

Post by RobertT »

The stated aim of the DBCBS is to target increases in excess of CPI, up to a limit of 4% over CPI.

I'm not 100% sure which months figures they use, but if you assume it's the previous September as is the case with pension increases, then the CPI figure for September 2020 was 0.5%.

The DBCBS increase this time last year was 3.7%, which compared to a CPI figure of 1.7% in September 2019.

So in percentage terms, the increase this year was higher when comparing it to CPI.

In both years, DBCBS returns have have also been higher than RPI.

The 2020 RMPP report and accounts suggests the investment strategy for the DBCBS isn't exactly geared towards the riskiest assets, so the returns will probably never be anything to get excited about.
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