DBCB to CDC employer contributions

[rogersh]

Robert T - In a recent post

My query;
I see the % rate in the interim DBCB of 15.6 employers contributions is better than the improved 10% in the DC scheme. Although the % reduces to 13.6 in the new CDC scheme - if & when that is introduced.
Your reply;
But 2% of that 15.6% goes towards death & ill health benefits, not directly into your ‘pot’.

Would you elaborate on why the 2% is separated in DBCB scheme from the 15.6% & how does that drop of 2% for employer, if/when the CDC scheme is introduced, impact on death & ill health benefits ?

[RobertT]

The death and ill health benefits are the same for both the DBCBS and the CDC scheme:

Death in service = 4 x pensionable pay

Ill health benefits = 50% of pensionable pay, less state benefits(employment & support allowance) payable for up to 3 years, plus a lump sum payment at the end of the 3 years, plus payment of accrued benefits.

The way I understand it, the extra 2% going into the DBCBS would be paying for insurance to fund those benefits. But those same benefits would come out of the collective pot of money with the CDC scheme.

Unless someone knows different?

[rogersh]

I have just listened to the money box programme where Paul Lewis said Royal Mail were contributing 15.6 % to the CDC scheme which added to 6% employee conts = 21.6% but I believe its 19.6% (13.6% + 6%).

[NWpostie]

One other question assuming this new pension scheme comes in.

Is AVCs kept separate from this so you can save individually for your own lump sum and not funding somebody else who is not paying in.

[yellowbelly]

I have just listened to the money box programme where Paul Lewis said Royal Mail were contributing 15.6 % to the CDC scheme which added to 6% employee conts = 21.6% but I believe its 19.6% (13.6% + 6%).

Looking at the proposal document the 15.6% + 6% is for the interim DBCB Lump Sum Scheme.

[RobertT]

I have just listened to the money box programme where Paul Lewis said Royal Mail were contributing 15.6 % to the CDC scheme which added to 6% employee conts = 21.6% but I believe its 19.6% (13.6% + 6%).

The agreement says it’s 13.6% + 6% going into the CDC pension. The extra 2% relates to the DBCBS to fund ill health & death benefits.
Paul Lewis is a journalist, who obviously didn’t do his homework properly.

[RobertT]

One other question assuming this new pension scheme comes in.

Is AVCs kept separate from this so you can save individually for your own lump sum and not funding somebody else who is not paying in.

Current AVC’s(Bonusplan, Flexiplan, Addplan) relate to your benefits via the RMPP and allow you to fund your tax free lump sum from it.
The transitional DBCBS also relates to the RMPP and is also building up a lump sum.

The CDC scheme should it be implemented, is separate from the RMPP, therefore I assume we will no longer be able to pay into the current AVC’s. Although nothing official has yet been communicated to us, so that is my opinion!

There will be an option to pay in an extra 1% to build up a higher lump sum, which will be matched by RM. But whether we will be able to pay in any more ourselves on top of that, either into the DBLSS or in a separate account, at the moment we don’t know.

[rogersh]

I have just listened to the money box programme where Paul Lewis said Royal Mail were contributing 15.6 % to the CDC scheme which added to 6% employee conts = 21.6% but I believe its 19.6% (13.6% + 6%).

The agreement says it’s 13.6% + 6% going into the CDC pension. The extra 2% relates to the DBCBS to fund ill health & death benefits.
Paul Lewis is a journalist, who obviously didn’t do his homework properly.

I would have expected Hilary Salt to have corrected him in that case.

[fishtank]

I would have expected Hilary Salt to have corrected him in that case.

I would have expected Hillary Salt to stand up and say this scheme is nothing like the WinRs scheme we proposed with the CWU, in fact it's a crock of shite.

So I guess we both feel let down.

[NWpostie]

One other question assuming this new pension scheme comes in.

Is AVCs kept separate from this so you can save individually for your own lump sum and not funding somebody else who is not paying in.

Current AVC’s(Bonusplan, Flexiplan, Addplan) relate to your benefits via the RMPP and allow you to fund your tax free lump sum from it.
The transitional DBCBS also relates to the RMPP and is also building up a lump sum.

The CDC scheme should it be implemented, is separate from the RMPP, therefore I assume we will no longer be able to pay into the current AVC’s. Although nothing official has yet been communicated to us, so that is my opinion!

There will be an option to pay in an extra 1% to build up a higher lump sum, which will be matched by RM. But whether we will be able to pay in any more ourselves on top of that, either into the DBLSS or in a separate account, at the moment we don’t know.

It's all very vague and wishy washy at the moment, it is a concern as we don't know the details of this new scheme, also many of us have paid into our add plan, bonusplan and flexiplan.do we suddenly find that our investment is worthless and a waste of time ?

[RobertT]

It's all very vague and wishy washy at the moment, it is a concern as we don't know the details of this new scheme, also many of us have paid into our add plan, bonusplan and flexiplan.do we suddenly find that our investment is worthless and a waste of time ?

Anyone who’s paid into Addplan will still get the additional service they’ve paid for when the RMPP closes to future accrual on 31st March.

The balance of your Bonusplan and Flexiplan accounts can still be used to fund the tax free cash from the RMPP. The value of those won’t suddenly disappear into the ether!

[NWpostie]

It's all very vague and wishy washy at the moment, it is a concern as we don't know the details of this new scheme, also many of us have paid into our add plan, bonusplan and flexiplan.do we suddenly find that our investment is worthless and a waste of time ?

Anyone who’s paid into Addplan will still get the additional service they’ve paid for when the RMPP closes to future accrual on 31st March.

The balance of your Bonusplan and Flexiplan accounts can still be used to fund the tax free cash from the RMPP. The value of those won’t suddenly disappear into the ether!

I hope not mate.

That said I'm inclined to vote against this deal.