Pension Discussions

[Hawkey99]

All, Just wondered how long the discussion might take. Does the CWU have any real say in what happens.

Very worrying that we could lose so many of our perks/rights. Have other companies closed their schemes and do you know the outcome.

AVCs are a major issue for me, seems likely that these will close also. What might replace them.

Thanks

[RobertT]

All, Just wondered how long the discussion might take. Does the CWU have any real say in what happens.

It’s hard to put a time frame to it, but in practice there will probably be discussions followed by a consultation period when we will be able to put our feelings forward, possibly followed by more discussions if they decide to act on anything we say.

The CWU can put their opinions across and try to negotiate a few concessions, but ultimately RM can do more or less what they want.

Very worrying that we could lose so many of our perks/rights. Have other companies closed their schemes and do you know the outcome.

There are probably thousands of companies up and down the country who have closed their defined benefit pensions over the last 10-20 years. Some have just closed them to new employees, which is what happened to the RMPP in 2008, while others have been closed for existing employees too.

They have been replaced by defined contribution schemes with the reasons given being much the same as for our pension, i.e DC pensions are much cheaper.

AVCs are a major issue for me, seems likely that these will close also. What might replace them.

Probably nothing, but we should be able to pay more into the RMDCP if we want to.

[mark.cup]

Can't see AVC's being affected bonusplan has to be paid for the rest of your career and hardly anyone does it even when you advise them to..

flexiplan is purely funded by yourself and saves the business money if done through PSE

As far as I can see it's only the main plan we need worry about and if the union fights hard I think the best they could do would be to keep as high a percentage as possible contribution wise from Royal Mail.

They could have several options that we could chose from lowest being the same we pay now and maybe the highest 10% with Royal Mail paying more the more you pay yourself if that makes sense

[RobertT]

Can't see AVC's being affected bonusplan has to be paid for the rest of your career and hardly anyone does it even when you advise them to..

flexiplan is purely funded by yourself and saves the business money if done through PSE

As far as I can see it's only the main plan we need worry about and if the union fights hard I think the best they could do would be to keep as high a percentage as possible contribution wise from Royal Mail.

They could have several options that we could chose from lowest being the same we pay now and maybe the highest 10% with Royal Mail paying more the more you pay yourself if that makes sense

The reason I think AVC’s might be stopped is that they are designed to enhance our benefits from the RMPP. So if the RMPP closes then it’s logical that AVC’s will be stopped too.

All the RM literature on Bonusplan says payments can’t be reduced or stopped and must be continued until you leave ‘reckonable service’. Reckonable service relates to the time you spend paying into the RMPP. Therefore if it closes, then AVC’s days are probably numbered. But you never know?

If those people who pay AVC’s continue paying a similar overall amount into the RMDCP, Royal Mail will still make similar savings in NIC’s via PSE.

I agree there should be more and higher contribution options for the RMDCP.

[GRS]

Is the proposed closure actually due to RM not being to afford it's liabilities? I reckon it's just another cost cutting exercise at our expense and we're supposed to sit here like nodding dogs agreeing to it. One question - is Moya's and the boards pension being drastically cut or stopped? - no I thought not. Funny how the company can afford to pay out millions to them in pensions but can't afford to chuck a couple of quid the workers way.

[RobertT]

Is the proposed closure actually due to RM not being to afford it's liabilities? I reckon it's just another cost cutting exercise at our expense and we're supposed to sit here like nodding dogs agreeing to it.

According to RM their contributions will need to increase from 17.1% to over 40% to keep the scheme open in its current form. But changing from DB to DC is also a good way to cut their costs aswell.

One question - is Moya's and the boards pension being drastically cut or stopped? - no I thought not. Funny how the company can afford to pay out millions to them in pensions but can't afford to chuck a couple of quid the workers way.

I’m not necessarily disagreeing with you, but funding a pension scheme with 000’s of members is still an expensive business. Based on my estimated NRA65 figures and me actually working until 65, my pension is likely to be at least £3,000 per year less as a result of the RMPP closing. So it’s a lot more than just a couple of quid.

[mark.cup]

Maybe look at it another way there will always be the odd few sensible ones that will want to contribute more than the standard rate something that most schemes allow and if it saves Royal Mail NI via PSE I will be shocked if it's something that's stopped... With the new pension freedoms it will just get bundled in with pension number 3 and still help with a bigger tax free lump sum etc?

Bonusplan I suspect will end up like addplan if you already do it then you will continue and nobody else will be able to do it from a set date I maybe wrong but let's see what happens

[RobertT]

Maybe look at it another way there will always be the odd few sensible ones that will want to contribute more than the standard rate something that most schemes allow and if it saves Royal Mail NI via PSE I will be shocked if it's something that's stopped... With the new pension freedoms it will just get bundled in with pension number 3 and still help with a bigger tax free lump sum etc?

Bonusplan I suspect will end up like addplan if you already do it then you will continue and nobody else will be able to do it from a set date I maybe wrong but let's see what happens

I think all DC schemes allow you to put in as much as you want up to the limit of how much you earn or a max of £40,000 per year. Only the employer contributions are limited to how much they choose to pay in.

Only Addplan, Flexiplan & Bonusplan can be used to provide higher RMPP benefits. The RMDCP is a completely different entity and will be treated as such until the government of the day decrees more freedoms and decides otherwise.

Yes it’s possible that Bonusplan will be allowed to continue for those who already do it, and there are two potential scenarios if that happens:
1. Carry on as exactly as now
2. Ring fence what’s in our accounts as of 31st March 2018 & redirect both employee & RM contributions into the RMDCP instead.

Contribution wise the worst that will happen it that we’ll lose our £100 per year off RM into Bonusplan. It won’t be the end of the world.

We’ll have to wait and see.