Pension Illustration Today

[fishtank]

It was a lot better read than previous examples and figures have improved.Obviously not as good as original pension I was expecting but I could live with this proposal if it makes the company more viable and sustainable in the long term.

The pension illustrations are individually calculated, some people closer to retirement will obviously lose very little, others with 20 or 30 years to work will lose a huge amount. Without knowing which category you fall into and what other income or assets you have your opinion may either be valid or extremely selfish and self-centred. You might have the financial means to "live with it" but most members won't.

What makes a company viable and sustainable in the long term is a solid business plan and an effective, engaged and motivated workforce not robbing the employee pension plan, just ask BHS if you don't believe me.

[claretandblue]

Well i stand to lose £95k from what i would of got, (37 year old with 20 years service) i think Royal Mail has made the calculation that anyone with 30 years in will vote no as they aren't affected as much, but are there enough of them to swing the vote ?

[postmanpleb]

Well i stand to lose £95k from what i would of got, (37 year old with 20 years service) i think Royal Mail has made the calculation that anyone with 30 years in will vote no as they aren't affected as much, but are there enough of them to swing the vote ?

If that's the case I think Royal Mail have calculated wrongly.All the staff in my office with 30 years in are steaming mad about any loss & are all voting yes.


Up the pinks!

[claretandblue]

Well i stand to lose £95k from what i would of got, (37 year old with 20 years service) i think Royal Mail has made the calculation that anyone with 30 years in will vote no as they aren't affected as much, but are there enough of them to swing the vote ?

If that's the case I think Royal Mail have calculated wrongly.All the staff in my office with 30 years in are steaming mad about any loss & are all voting yes.


Up the pinks!

That's the thing, Royal mail go on about people talking the maximum lump sum so if you've got 30 years in then you can take that as full pension and use the remaining 10 years plus to save for your lump sum in the new scheme. But if you don't want to use the maximum lump sum then you lose out big time.

[stephen500]

It was a lot better read than previous examples and figures have improved.Obviously not as good as original pension I was expecting but I could live with this proposal if it makes the company more viable and sustainable in the long term.

Look there is no getting around the fact that the illustration is good for those with long service. However the use of CPI + 2% growth per year does not really appear to me as feasible. Along with the assertion that our pensionable pay increases for CSDB by RPI (page 6). The new lump sum is assumed to increase at CPI + 2% (page 7) The illustration for those with little service left will be more accurate, then for those with much longer to go. This applies for any thing over a long period of time.

[stephen500]

Well i stand to lose £95k from what i would of got, (37 year old with 20 years service) i think Royal Mail has made the calculation that anyone with 30 years in will vote no as they aren't affected as much, but are there enough of them to swing the vote ?

If that's the case I think Royal Mail have calculated wrongly.All the staff in my office with 30 years in are steaming mad about any loss & are all voting yes.


Up the pinks!

I have nearly 40 years service and appear to lose very little or any thing at all. But this will be true, more service, more accuracy, longer service to go will mean less and be less accurate.

[Decky Boy]

I'd like more info on the "Pension Contribution Holiday" the business took years ago. Had this not happened in all likelihood our current scheme would (still) be fully funded and fit for purpose ?

Who was responsible for the "contributions holiday" and can we (The Pension Scheme Members) hold those responsible to account ?

[cloherty1976]

I'd like more info on the "Pension Contribution Holiday" the business took years ago. Had this not happened in all likelihood our current scheme would (still) be fully funded and fit for purpose ?

Who was responsible for the "contributions holiday" and can we (The Pension Scheme Members) hold those responsible to account ?

Wasn't it there was too much money in the fund and under the law at the time you could not put more money in.

[RobertT]

I'd like more info on the "Pension Contribution Holiday" the business took years ago. Had this not happened in all likelihood our current scheme would (still) be fully funded and fit for purpose ?

Who was responsible for the "contributions holiday" and can we (The Pension Scheme Members) hold those responsible to account ?

The pensions holiday was 13 years long and lasted between 1990 and 2003.

At the time DB pension schemes weren’t allowed to have a significant surplus and markets were performing well, so many companies took holidays. But RM left it too long to restart contributions which put the scheme into deficit.

Add that to the fact that at one point the scheme had about 80% exposure to equities, and came a cropper in the crash that followed the banking crisis(2007/08). They then did what the average investor is told never to do and sold low and moved away from equities and into bonds, which provide a much more stable but lower return, and so crystalised their losses!

The scheme has been badly managed for years, but when the government took over liabilities for our pre 2012 benefits, we had a clean slate. Infact the post 2012 was and still is, in surplus. But poor investment management means the scheme is in trouble again, with a high dependency on bonds that have failed to produce the returns that were expected, caused mainly by QE and an inability to diversify.

That’s the basics, but this article from 2004 will tell you a bit more. Interestingly the deficit at the time was £2.5Billion and described as unmanageable. By the time we were privatised it was £10Billion and is now about £18Billion:
http://www.thisismoney.co.uk/money/news ... -Mail.html" onclick="window.open(this.href);return false;

[cloherty1976]

It was a lot better read than previous examples and figures have improved.Obviously not as good as original pension I was expecting but I could live with this proposal if it makes the company more viable and sustainable in the long term.

The pension illustrations are individually calculated, some people closer to retirement will obviously lose very little, others with 20 or 30 years to work will lose a huge amount. Without knowing which category you fall into and what other income or assets you have your opinion may either be valid or extremely selfish and self-centred. You might have the financial means to "live with it" but most members won't.

What makes a company viable and sustainable in the long term is a solid business plan and an effective, engaged and motivated workforce not robbing the employee pension plan, just ask BHS if you don't believe me.

Yes you could also have the opinium too of they don't exist anymore. It's not right but it's true.

[TheStrangler]

On the front of the illustration it says "your total DB pension@31 March 2016".
The figure is around £7,500 per year (excluding pension supplement).
Is this approximately what I'd get if I retired now age 55?
Or would i have to deduct 5% a year from the above figure for retiring early?
I've done 23 years.
Does this figure also assume you not taking any lump sum?
Finally , would I have to deduct tax from the quoted figure of £7,500 @about 20%?

[RobertT]

On the front of the illustration it says "your total DB pension@31 March 2016".
The figure is around £7,500 per year (excluding pension supplement).
Is this approximately what I'd get if I retired now age 55?

No, it’s your NRA60 & NRA65 added together and is what you would get if you could take it all unreduced.

Or would i have to deduct 5% a year from the above figure for retiring early?

You would need to take 5% off both NRA60 & NRA65 figures(you can work out your NRA65 from your annual statement). So if taking both at 55, your NRA60 would be reduced by 25% and your NRA65 by 50%.

I've done 23 years.
Does this figure also assume you not taking any lump sum?

Yes. You’re in section C, so you don’t get a lump sum as standard but you have the choice of giving up some pension to get one.

Finally , would I have to deduct tax from the quoted figure of £7,500 @about 20%?

Pensions count as income just like earnings from work. So the first £11,500(current rate of the personal tax allowance) you earn in any financial year is tax free and anything above that is taxable.

[cloherty1976]

It was a lot better read than previous examples and figures have improved.Obviously not as good as original pension I was expecting but I could live with this proposal if it makes the company more viable and sustainable in the long term.

The pension illustrations are individually calculated, some people closer to retirement will obviously lose very little, others with 20 or 30 years to work will lose a huge amount. Without knowing which category you fall into and what other income or assets you have your opinion may either be valid or extremely selfish and self-centred. You might have the financial means to "live with it" but most members won't.

What makes a company viable and sustainable in the long term is a solid business plan and an effective, engaged and motivated workforce not robbing the employee pension plan, just ask BHS if you don't believe me.

I have 20 years to go and will lose £100,000 but I will invest more in my avc which I have had for at least 15 years. Years ago I invested in the policy that the union recommended and had very bad returns and withdraw losing £15000 but it was my decision to do that. Sometimes things go right sometimes they don't but things change in life kids,death,divorce and tax especially. I am not happy they will change my pension but as I see it has changed 4 or 5 times before and it will in my opinion again. Not for the better either. I just deal with my situation as best I can for my families future..

[daveyeff]

On the front of the illustration it says "your total DB pension@31 March 2016".
The figure is around £7,500 per year (excluding pension supplement).
Is this approximately what I'd get if I retired now age 55?

No, it’s your NRA60 & NRA65 added together and is what you would get if you could take it all unreduced.

Or would i have to deduct 5% a year from the above figure for retiring early?

You would need to take 5% off both NRA60 & NRA65 figures(you can work out your NRA65 from your annual statement). So if taking both at 55, your NRA60 would be reduced by 25% and your NRA65 by 50%.

I've done 23 years.
Does this figure also assume you not taking any lump sum?

Yes. You’re in section C, so you don’t get a lump sum as standard but you have the choice of giving up some pension to get one.

Finally , would I have to deduct tax from the quoted figure of £7,500 @about 20%?

Pensions count as income just like earnings from work. So the first £11,500(current rate of the personal tax allowance) you earn in any financial year is tax free and anything above that is taxable.

your lump sum is not taxed though. (if taken)

[TheStrangler]

Can someone advise me how to work out my Nra 60 and 65 using this illustration so I can work out roughly what I'd get if retiring at 55. Thanks for the advice thus far.