Start Paying into Pension.

doorstepped · Post by **doorstepped** » 22 Jan 2017, 13:23

Bit of advice needed.

when do you start paying into RM pensions?

is it from day One? or after a certain amount of time?

got a PT postie who is not paying into a pension at all ( been at RM for 7 Months ) and just wondered if they should be?

datasaint · Post by **datasaint** » 22 Jan 2017, 13:27

After 3 months you get enrolled automatically and start contributing 1%. Not until after 12 months can you make full contributions of 6% (you get an additional 9% from RM). And you have to phone up Zurich to be put on the 6% tier.

All the info is here - http://www.zurich.co.uk/save/royalmaildcplan" onclick="window.open(this.href);return false;

Dorset Plodder · Post by **Dorset Plodder** » 22 Jan 2017, 17:50

Due to the impending Shitstorm that's just around the corner, concerning Royal mail Pensions, your colleague would do well to consult an IFA and perhaps consider setting up their own Personal Pension Plan. It looks like RM are going to shaft us over their contributions in future. They well be "Better Off" putting any additional payments into their own plan.

hans solo · Post by **hans solo** » 22 Jan 2017, 18:17

i think the cwu should propose to rm that we are all pulling out of the pension scheme
that would rock the boat
all were going to end up with is basic gvmt minimum anyway

Post by **RobertT** » 22 Jan 2017, 18:34

Dorset Plodder wrote:Due to the impending Shitstorm that's just around the corner, concerning Royal mail Pensions, your colleague would do well to consult an IPA and perhaps consider setting up their own Personal Pension Plan. It looks like RM are going to shaft us over their contributions in future. They well be "Better Off" putting any additional payments into their own plan.

hans solo wrote:i think the cwu should propose to rm that we are all pulling out of the pension scheme
that would rock the boat
all were going to end up with is basic gvmt minimum anyway

The new RM DC pension is effectively a personal pension plan, except RM are going to be paying into it aswell. Based on basic pay of £412 per week, our contributions will be about £25(6%) gross or £17 after tax relief and PSE, while RM will be paying £41(10%). So that’s £49 per week you’re getting in ‘free money’.
I know the proposed new scheme is far inferior to the existing one, but why would anybody opt out? The golden rule of pension saving is always join any work scheme and always pay in at least as much as it takes to get the highest employer contribution.

Although setting up an additional pension and/or other savings aswell as a work scheme to help fund your retirement is a good idea.

Dorset Plodder · Post by **Dorset Plodder** » 22 Jan 2017, 18:54

RobertT wrote: The new RM DC pension is effectively a personal pension plan, except RM are going to be paying into it aswell. Based on basic pay of £412 per week, our contributions will be about £25(6%) gross or £17 after tax relief and PSE, while RM will be paying £41(10%). So that’s £49 per week you’re getting in ‘free money’.
I know the proposed new scheme is far inferior to the existing one, but why would anybody opt out? The golden rule of pension saving is always join any work scheme and always pay in at least as much as it takes to get the highest employer contribution.

Although setting up an additional pension and/or other savings as well as a work scheme to help fund your retirement is a good idea.

The Voice of Reason as usual RobertT.

So it would make sense for the New Starter to sign up for the 6% contribution,even under the "New Deal"? I already have a PPP (I don't believe in putting all my eggs in one basket in case you work for someone like Philip Green

), how come RM don't expect us to increase our contributions in line with inflation, like a lot of PPPs do?

Post by **RobertT** » 22 Jan 2017, 19:28

Under the proposals current members of the DC scheme(RMDCP) would continue with their own contribution levels, so that would include new entrants from April 2008 onwards. But the CWU are trying to get those people included in the contribution rates of the ‘new DC scheme’ which are higher.

It’s always best to get as much free money off your employer as possible. So I would always suggest anyone puts into their works pension whatever it takes to get the maximum employer contribution.

Our pension contributions are percentage based, so if our wage rises, so will our weekly pension subs. Or we can opt to pay in more than the 6% if we want to.

NWpostie · Post by **NWpostie** » 23 Jan 2017, 21:48

While not ideal, a defined cotribution scheme is better than no pension or a private personal pension plan as the administration is done by RM and they also pay into it.

I have been in the scheme since I was 20 and I'm now nearly 50, I'm glad I stayed in.

Post by **wacko74** » 24 Jan 2017, 05:34

Just a quick query about pensions in general.... most pension schemes invest in the stock markets which are currently at an all time high, so why are pension scheme deficits also at an all time high??

datasaint · Post by **datasaint** » 24 Jan 2017, 12:54

wacko74 wrote:why are pension scheme deficits also at an all time high??

People are living much longer into retirement, therefore to keep paying these pensions the company has pay more into it. Is about the be all and end all of it.

Post by **RobertT** » 24 Jan 2017, 14:25

wacko74 wrote:Just a quick query about pensions in general.... most pension schemes invest in the stock markets which are currently at an all time high, so why are pension scheme deficits also at an all time high??

In practice many DB pensions now don’t invest very heavily in the stock market, I think the RMPP only has about 11% exposure. So they haven’t benefitted from the growth over the last few years as much as you might think. Many schemes now use bonds/gilts as their main investment strategy, but they haven’t performed as well as expected.

As norm has said above, life expectancy is also a main contributor to the pension problem we now face. There are currently around 121,000 members of the RMPP which includes current employees, deferred members and pensioners. If we all live an average of just 1 year more than expected that would put a big extra strain on the finances of the scheme. That money has to come from somewhere and if the investments aren’t providing it, it’ll come down to RM to pay the extra.

Dorset Plodder · Post by **Dorset Plodder** » 24 Jan 2017, 18:57

RobertT wrote: If we all live an average of just 1 year more than expected that would put a big extra strain on the finances of the scheme. That money has to come from somewhere and if the investments aren’t providing it, it’ll come down to RM to pay the extra.

This sounds like a good plot for a film.

Suddenly hundreds of Retired Posties are systematically assassinated by a mystery hitman!

mark.cup · Post by **mark.cup** » 24 Jan 2017, 19:25

Dorset Plodder wrote:
RobertT wrote: If we all live an average of just 1 year more than expected that would put a big extra strain on the finances of the scheme. That money has to come from somewhere and if the investments aren’t providing it, it’ll come down to RM to pay the extra.

This sounds like a good plot for a film. Suddenly hundreds of Retired Posties are systematically assassinated by a mystery hitman!

Hitwoman