Sipp advice

[jetblack]

Received a phone call within 30 minutes of my call. Bloke told me that it was highly likely that there would be an NRA of 65. Reduction for early payments. AVCs he believes would be similar. Will just have to see if there are any new developments. I was hoping the AVCs after changes, could be accessed at 60, but this seems unlikely, unless you opt for a reduced amount for early payment.

Based on a DC scheme being implemented, the bloke you spoke to is obviously clueless!

What does he think is going to be reduced for early payment?

Roberts right - the bloke you spoke to is clueless - AVC's aren't defined benefit. They are a glorified savings account. If you had £10k in the building society would you expect to take a 5% reduction for every year you drew on it before 65 ?

[nataddick]

Agree Robert - I have sent 4 emails about the 'Pensions Proposal' and without exception, the responses I have received are from an 'answer bank' of probable questions that do NOT deviate from the agreed 'script' and fail to provide comprehensive answers to the actual questions posed. The key N.I.contribution issue, arising as as result of the end of contracting-out, was mentioned by RM in 2013 and identified in several of my subsequent posts about that Proposal, at that time. However, the CWU with all the available resources at their disposal, do not seem to have foreseen the eventual outcome of a reduction in overall pension and N.I. contributions of circa £70 M.

Now,it has come back to bite us all on the arse, due to the complacency of the CWU leadership.

In my opinion, the CWU have now tried, albeit belatedly, to pitch the current pensions issue as one of the 4 pillars of security in an attempt to unify the membership. The CWU know that the current Pensions Proposal favours 1/3 rd of the membership and disadvantages the other 2/3.

The CWU also know that they are unlikely to gain the support of the entire membership of the CWU on the pensions issue alone and so have broadened the range of issues in an attempt to gain the necessary level of support.

[RobertT]

I couldn’t agree more nataddick!

I believe the CWU have shown themselves up to be amateurish and lacking credibility. The DB proposal that Dingo has attempted to describe on this site is meant well, but lacks joined up thinking on the pensions issue within RM and industry at large. Yes, we would all like to be on a generous DB pension, but is it realistic? Personally I don’t think so, although it does pain me to say it. And why has that proposal not been communicated properly with the membership? We live in the digital age. Surely they can muster more than an unofficial post on an internet forum! Although if it wasn’t for Dingo we presumably wouldn’t know anything about it at all.

In my opinion the CWU couldn’t really give two hoots about the current members of the DC pension. Yes, they will argue that they agreed a higher employer contribution rate a few years ago which is good. But would they even be proposing a unified DB scheme if the Royal Mail weren’t planning on closing the RMPP to future accruals? In my opinion, almost certainly not.
Basically with regards to current DC members, the CWU are trying to close the stable door after the horse has bolted. The only problem with that is that the horse bolted 9 years ago.

[RobertT]

Heapsy!

You have told us twice on separate threads that you have a substantial savings pot tucked away and well done for that, you’re doing the right thing. You have said you already have 3 separate DC pension pots totalling nearly £50k, which is not an inconsequential sum of money! So surely you know how those pensions work? The proposed new RM DC pension will be no different.

Generally speaking DC pensions don’t have NRA’s. The only exceptions would be where’s there’s a GAR as previously mentioned. Or perhaps(I forgot this before) if you’ve invested your money into a ‘with profits’ fund, which often charge a ‘market value adjustment’ if you take your pension before a certain age. If neither of those apply, then the legal minimum age of 55 would be the earliest you can access your pot of money, or later if you chose to! As Jetblack has said, a DC pension is just a glorified savings account, but with specific pension rules attached. AVC’s(Flexiplan & Bonusplan), stakeholders, personal pensions & SIPP’s are all DC pensions, along with the proposed new RM DC plan.

The Royal Mail have written, printed and sent out around 100,000 booklets concerning the proposed introduction of a DC pension to replace the RMPP. I assume we have all read it at least once? Therefore we know the basics of what they want to do, although some of the specifics are lacking from both the booklet and from contacting the ‘helpline’.

What you have said in your posts is the opposite to both what the proposals are, and the rules associated with DC pension schemes in general.

[nataddick]

I am struggling to understand the precise detail of the proposed CWU alternative Wage In Retirement Scheme. I have watched the Paul Ferrett video on YouTube which provides a little more detail than Dingo's original post and Pensions Bulletin 3. However, I am disturbed that still there is no official communication from CWU headquarters on the precise detail of their counter proposal, 6 days before the RM Pension Consultation is due to close !

The question I would pose to the CWU leadership is why is it that the Wage In Retirement alternative proposal was not presented or accepted by RM, when our colleagues in the Post Office recently went through a similar pension consultation without a positive outcome for CWU members.

[heapsy]

Heapsy!

You have told us twice on separate threads that you have a substantial savings pot tucked away and well done for that, you’re doing the right thing. You have said you already have 3 separate DC pension pots totalling nearly £50k, which is not an inconsequential sum of money! So surely you know how those pensions work? The proposed new RM DC pension will be no different.

Generally speaking DC pensions don’t have NRA’s. The only exceptions would be where’s there’s a GAR as previously mentioned. Or perhaps(I forgot this before) if you’ve invested your money into a ‘with profits’ fund, which often charge a ‘market value adjustment’ if you take your pension before a certain age. If neither of those apply, then the legal minimum age of 55 would be the earliest you can access your pot of money, or later if you chose to! As Jetblack has said, a DC pension is just a glorified savings account, but with specific pension rules attached. AVC’s(Flexiplan & Bonusplan), stakeholders, personal pensions & SIPP’s are all DC pensions, along with the proposed new RM DC plan.

The Royal Mail have written, printed and sent out around 100,000 booklets concerning the proposed introduction of a DC pension to replace the RMPP. I assume we have all read it at least once? Therefore we know the basics of what they want to do, although some of the specifics are lacking from both the booklet and from contacting the ‘helpline’.

What you have said in your posts is the opposite to both what the proposals are, and the rules associated with DC pension schemes in general.

The pots you are referring to do have selected retirement dates. One is 60, I'm still paying in to this. And one is 65. This was a pension I took out in the 1980's, before I joined RM. I hope you are right regarding the age issue. This would mean being able to access the DC pot, which in effect I could treat as a lump sum to the NRA60 pension. Let's hope we get some clarification on this in the near future.

[RobertT]

The pots you are referring to do have selected retirement dates. One is 60, I'm still paying in to this. And one is 65. This was a pension I took out in the 1980's, before I joined RM. I hope you are right regarding the age issue. This would mean being able to access the DC pot, which in effect I could treat as a lump sum to the NRA60 pension. Let's hope we get some clarification on this in the near future.

I too have a personal pension with a ‘selected retirement date/age’ of 60, which I chose when I started it about 14-15 years ago I think. But that age is only really applicable to the yearly statements/illustrations you receive or perhaps view online, where it tells you what you might get at that age.
As the legal minimum age to take any pension is 55 and as I have no GAR’s or MVA’s(as previously mentioned) to worry about, there is nothing stopping me from accessing that pension any time after 55. Infact I actively plan to do so, along with the proposed new RM DC pension.

You obviously know more about your own pensions than me, but you should be able to access your stakeholder pension at any time after 55 too. There’s some info here: https://www.moneyadviceservice.org.uk/e ... r-pensions" onclick="window.open(this.href);return false;

As the other pension was taken out in the 80’s there’s a higher possibility it could have a GAR - your paperwork should tell you. If so, that guaranteed annuity rate could well be worth a lot more than the cash value of the fund. If not, then that should also be accessible at 55+.