Update on death in service benefits

[RobertT]

https://www.myroyalmail.com/news/2017/0 ... n-question" onclick="window.open(this.href);return false;

Some of you have asked how your death in service benefits would be affected under the proposed changes to the Royal Mail Pension Plan (the Plan).

Under the proposal, the overall death in service lump sum would still be 4 x pensionable pay. It would be based on your Defined Contribution (DC) pensionable pay from 1 April 2018.

Your dependants would also receive an additional death in service lump sum of 2 x DC pensionable pay, together with the value of your retirement account.

Finally, your dependants would receive death benefits based on the benefits that you earned up to 31 March 2018 in the Plan and the Royal Mail Statutory Pension Scheme.

Here is an example of what this means for Section C members, who make up the majority of the Plan members.

Your death in service benefits under the current Plan:

Death in service lump sum: 4 x pensionable pay
Dependant’s pension: ½ x ill health pension (this is an enhanced pension)
Children’s pension: ¼ - ½ x ill health pension (depending on the number of eligible children you have)
All of these benefits are payable immediately
Your death in service benefits under the proposal:

Death in service lump sum: 4 x DC pensionable pay
Dependant/children’s benefit: 2 x DC pensionable pay and the fund value at the date of your death, to cover all dependants
Plus Plan and Royal Mail Statutory Pension Scheme deferred benefits:
Death in service lump sum: 5 x deferred pension (NRA 60 and NRA 65)
Dependant’s pension: ½ x deferred pension (NRA 60 and NRA 65)
Children’s pension: ¼ - ½ x deferred pension (NRA 60 and NRA 65), depending on the number of eligible children
All of these benefits would be payable immediately
Please note the death in service lump sum is capped at 4 x pensionable pay in all cases. If members have benefits in more than one Royal Mail pension plan, the maximum lump sum is 4 x DC pensionable pay. That would not change under our proposal.

[stephen500]

https://www.myroyalmail.com/news/2017/0 ... n-question

Some of you have asked how your death in service benefits would be affected under the proposed changes to the Royal Mail Pension Plan (the Plan).

Under the proposal, the overall death in service lump sum would still be 4 x pensionable pay. It would be based on your Defined Contribution (DC) pensionable pay from 1 April 2018.

Your dependants would also receive an additional death in service lump sum of 2 x DC pensionable pay, together with the value of your retirement account.

Finally, your dependants would receive death benefits based on the benefits that you earned up to 31 March 2018 in the Plan and the Royal Mail Statutory Pension Scheme.

Here is an example of what this means for Section C members, who make up the majority of the Plan members.

Your death in service benefits under the current Plan:

Death in service lump sum: 4 x pensionable pay
Dependant’s pension: ½ x ill health pension (this is an enhanced pension)
Children’s pension: ¼ - ½ x ill health pension (depending on the number of eligible children you have)
All of these benefits are payable immediately
Your death in service benefits under the proposal:

Death in service lump sum: 4 x DC pensionable pay
Dependant/children’s benefit: 2 x DC pensionable pay and the fund value at the date of your death, to cover all dependants
Plus Plan and Royal Mail Statutory Pension Scheme deferred benefits:
Death in service lump sum: 5 x deferred pension (NRA 60 and NRA 65)
Dependant’s pension: ½ x deferred pension (NRA 60 and NRA 65)
Children’s pension: ¼ - ½ x deferred pension (NRA 60 and NRA 65), depending on the number of eligible children
All of these benefits would be payable immediately
Please note the death in service lump sum is capped at 4 x pensionable pay in all cases. If members have benefits in more than one Royal Mail pension plan, the maximum lump sum is 4 x DC pensionable pay. That would not change under our proposal.

I first read this as we will get 2 main death in service benefits, one under the new scheme (x4) and another under the old (x5). But at the end it says "If members have benefits in more than one Royal Mail pension plan, the maximum lump sum is 4 x DC pensionable pay". So do we get 2 sets of death in service or just one?

[RobertT]

I first read this as we will get 2 main death in service benefits, one under the new scheme (x4) and another under the old (x5). But at the end it says "If members have benefits in more than one Royal Mail pension plan, the maximum lump sum is 4 x DC pensionable pay". So do we get 2 sets of death in service or just one?

I read it as just one death in service payment. But as it’s based on DC pensionable pay, those who currently get pensionable allowances would presumably get a smaller amount than then do now.