DBCBS The great Pensions Swindle? Can someone set me straight on this.

magicw · Post by **magicw** » 12 Apr 2018, 15:58

So been working for RM for just over 5 years, Never had a choice of Pension as a Post April 2008 Joinee so ended up in the RMDCP scheme.

Since day one I have put in 6% the higher contribution and RM have put in 9 % ( as apposed to 4% and 6% ).

As we all did , recieved correspondence about a month ago asking me to either elect a new scheme or be auto enrolled after March 19th into the New Scheme.

I thought I d gone through it with a fine tooth Comb and decided to go for the DBCBS as my contribution would stop at 6% and Royal mails would rise to 10% and then once it was up and running I could make additional AVS of 1% Plus % resulting in a pot of 19.6% with mine and RMs contributions.

So gets first pay slip showing adustment the DBCBS today and its considerably lower £19 as apposed to £24 under RDMCP scheme. Its still meant to be 6% on the same Basic Pay Rate ( Doesnt change until W/C 30/4 ) So why is it a bloody lower contribution.

Royal mail pensions say that we now have a Lowest Earning Rate????????????? And basically there is £3750 of pay we cant make a % Contribution of Pensionable pay against,

So Pensions Contributable pay used to be £401-58 a week against basic pay rate of £412.30 Net 6% = £ 24.09 going into your pension pot from you each week

Now the Pensions Contributable pay is £329.85 a week against the same basic pay of £412.30 Net 6% = £19.79 going into your pension pot from you each week

I take it that ROYAL MAIL CONTRIBUTION is also made as a Percentage ( 10%) Against this new Lowest Earning Rates of £329.85 Contribution of Pensional Pay too??????????????

Either way , through my own contributions or theirs it seems I am now able to Contribute less not More to my Pension and THEY are contributing less too than before.

WHERE WAS THIS IN THE INFORMATION THEY SENT OUT TO US, Where did I miss it???????????

W.T.F is Lowest Earnest Rate and Why does it apply to this pension and not the last. The amount I earn has not changed ( Yet ) why can I now not make any Pension Contributions agains £3750 of my pay?????????????????

NCFCstu · Post by **NCFCstu** » 12 Apr 2018, 16:13

I'm in the same boat. Spent years in the supposedly inferior defined contributions scheme. Glad to switch to the "everybody's equal" scheme only to find my contributions are about a fiver a week less. Something seems weird.

Superdude201 · Post by **Superdude201** » 12 Apr 2018, 16:45

The booklet showed that you would pay in less per week, however royal mail's contributions are higher than they were on the other pension scheme, so you are paying £4 less a week, but are actually having more money being put into the pension overall due to RMs higher contributions. That's how I read and understood it. If you're part time there is a certain threshold where you're better off on the old scheme though, depending on your contracted hours.

Think royal mail's % rate is 13.6% on the DBCBS, not 10%

Post by **rogersh** » 12 Apr 2018, 17:40

Superdude201 wrote:The booklet showed that you would pay in less per week, however royal mail's contributions are higher than they were on the other pension scheme, so you are paying £4 less a week, but are actually having more money being put into the pension overall due to RMs higher contributions. That's how I read and understood it. If you're part time there is a certain threshold where you're better off on the old scheme though, depending on your contracted hours.

Think royal mail's % rate is 13.6% on the DBCBS, not 10%

Yes the information was all there, Which included the LED lower earnings deduction. One example was £80 total contributions DBCBS v £77 in DC scheme.

Royal Mails % rate is 13.6% (+2% insurance fund) . The 10% was the higher figure RM are paying for DC scheme.

NCFCstu · Post by **NCFCstu** » 12 Apr 2018, 18:20

Thanks for pointing this out. I did think I would be missing something obvious.

magicw · Post by **magicw** » 12 Apr 2018, 19:10

Still doesn't answer the question as to why my Pension Contributable pay has dropped from £401.58 a week to £329.85 a week. That's £3750 a year that's not considered pensionable pay.

6% on £401 Was £24.09 payable by me

and 9 % on £401 was £36.09 payable by RM

so total = £60.18

New scheme 6% on £329.85 payable by me is £19.79

and 13.6% on £329.85 is £44,85 payable by RM

So total = £64 . 64

so slightly better. I would still prefer for the whole of my Pay to be pensionable.

Hopefully this is just an Interim scheme until the New Scheme is available to everyone.

heapsy · Post by **heapsy** » 12 Apr 2018, 20:14

As a full timer, my pensionable pay has gone UP by £13.53 per week. Contribution to pension UP by 81p from £21.69 to £22.50 per week. I'm a section C member who joined in 1988, post the previous changes. I get delivery supplement, one of which IS pensionable.

magicw · Post by **magicw** » 13 Apr 2018, 15:22

I understand that only Basic Pay is Pensionable. You couldn't account for the Variation in Over Time / Scheduled Attendances ( although they are contracted ) and I m not sure on Delivery Supplement as I joined after 2008. But my Basic Pay at Present is £412 per week and I used to have a Contributional Pensions Pay of £401 . Fair enough don't know were the £11 is dropped but no big deal.

Now however I have a Contributional pensions pay of Only £329 a week but my Basic Pay is the Same. Why has it dropped £80 a week or basically £3750 a year of my pay isn't considered pensionable under tbe new scheme.

Still haven't had an explanation as to Why or How???? I Appreciate that RM are now making a bigger 13.6% Contribution to my pension as apposed to previous 9% and I am paying £4 a week less but still
6% so net contribution is still bigger than before! But how can they Judge £3750 of my annual earnings to be None Pensionable? Its not overtime / SA or Delivery Supplement , its contracted basic Pay.

Post by **rogersh** » 13 Apr 2018, 16:08

An edit from a post by Heapsy;
..You have the LED or Lower Earnings Deduction to account for. Roughly £64 a week of your pay is non pensionable. This was introduced on 1st April 1987 as a way of keeping the Final Salary pension open.

Post by **RobertT** » 13 Apr 2018, 16:11

magicw wrote:I understand that only Basic Pay is Pensionable. You couldn't account for the Variation in Over Time / Scheduled Attendances ( although they are contracted ) and I m not sure on Delivery Supplement as I joined after 2008. But my Basic Pay at Present is £412 per week and I used to have a Contributional Pensions Pay of £401 . Fair enough don't know were the £11 is dropped but no big deal.

Now however I have a Contributional pensions pay of Only £329 a week but my Basic Pay is the Same. Why has it dropped £80 a week or basically £3750 a year of my pay isn't considered pensionable under tbe new scheme.

Still haven't had an explanation as to Why or How???? I Appreciate that RM are now making a bigger 13.6% Contribution to my pension as apposed to previous 9% and I am paying £4 a week less but still
6% so net contribution is still bigger than before! But how can they Judge £3750 of my annual earnings to be None Pensionable? Its not overtime / SA or Delivery Supplement , its contracted basic Pay.

You received a booklet saying that a total of 19.6% of your pensionable pay would be going into you DBCBS pot. That booklet can be viewed on online here.

That booklet states that the DBCBS definition of pensionable pay is different to the RMDCP definition, i.e it has the LED taken off, but pensionable allowances and bonuses are now also included!

The LED is quoted as being £3,753.

You made the choice to switch to the DBCBS.

I don’t understand the issue!

magicw · Post by **magicw** » 13 Apr 2018, 21:11

Yep my choice. I obviously didn't review the information properly enough. I saw that my contribution would remain 6% and RMs would increase to 13.6% I missed the point were my Pensions Contributional pay would drop from £401 per Week to Just £329. I accept the error was mine for not reading the small print.

its this bit I don't Get?

..You have the LED or Lower Earnings Deduction to account for. Roughly £64 a week of your pay is non pensionable. This was introduced on 1st April 1987 as a way of keeping the Final Salary pension open

ESPECIALLY AS RM ARE NOW CLOSING THE FINAL PENSION SALARY SCHEME. I didn't vote Yes because I didn't want to do my colleagues out of their pension rights.

I joined post 2008 so only the RDMCP available to me! if this is a post 1987 ruling why did it not apply to the RDMCP scheme? Why has it been applied to the New Scheme.

My pensionable pay is my pensionable pay! MY basic pay hasnt changed since day one of my employment, so how can the Scheme provider now deem I actually cant have nearly £4k or my pay taken into pension consideration?

I will be notifying RM that I m coming out of this scheme and Await the New DB scheme with interest.

Post by **RobertT** » 14 Apr 2018, 11:21

magicw wrote:Yep my choice. I obviously didn't review the information properly enough. I saw that my contribution would remain 6% and RMs would increase to 13.6% I missed the point were my Pensions Contributional pay would drop from £401 per Week to Just £329. I accept the error was mine for not reading the small print.

It wasn’t in the small print!

its this bit I don't Get?

..You have the LED or Lower Earnings Deduction to account for. Roughly £64 a week of your pay is non pensionable. This was introduced on 1st April 1987 as a way of keeping the Final Salary pension open

ESPECIALLY AS RM ARE NOW CLOSING THE FINAL PENSION SALARY SCHEME. I didn't vote Yes because I didn't want to do my colleagues out of their pension rights.

Section C of the RMPP was introduced in April 1987 as a replacement for section B which closed to new entrants, and the LED was introduced then. At first it was linked to the government figure, but was frozen in 1999, if the two had continued to be linked it would now be over £6,000.

The introduction of the LED probably was a cost cutting exercise but the FS scheme wasn’t in financial trouble at the time – infact only 3 years later RM took a payment holiday because the scheme was in surplus, and that holiday lasted a massive 13 years! It was that holiday that helped to put the scheme into trouble.

The FS scheme closed in 2008 and was replaced by an average salary scheme – it is that scheme that’s just closed to future accrual. The dispute was about what was going to replace it!

I joined post 2008 so only the RDMCP available to me! if this is a post 1987 ruling why did it not apply to the RDMCP scheme? Why has it been applied to the New Scheme.

The DBCBS is part of the RMPP – not a new scheme. The LED applies to the RMPP(section C), therefore it also applies to anyone joining it.

My pensionable pay is my pensionable pay! MY basic pay hasnt changed since day one of my employment, so how can the Scheme provider now deem I actually cant have nearly £4k or my pay taken into pension consideration?

RM provide the pension – ultimately it’s their decision how much of your pay is pensionable.

magicw · Post by **magicw** » 15 Apr 2018, 10:11

Thanks for your comprehensive answer. I can see now that the basis of this Pension has been set up off the back of old agreements.

I always thought the DC and DB schemes where totally separate and that having joined after 2008 the DB scheme was not open to me, and the major difference was that the DB scheme provided a Lump sum and an Annuity where the DC scheme just provided a lump sum.

I believed that Part of the Four Pillars campaign was to get a pension scheme moving forward which would provide parity for all members ( I didn't agree that member who had being paying in all their careers should have their DB scheme closed/ but I thought the CWU accepted RMs argument that it was no longer affordable)

Hopefully this DBCBS scheme is only an iterim and once a proper replacement for the old DB scheme is sorted we can all join it, Does any one know having chosen the DBCBS scheme whether I m stuck with it.

As I put previously I thought part of the Four Pillars campaign was to get us all on the same pension, which although not as good as the Old DB scheme , would be better than this.

Post by **rogersh** » 15 Apr 2018, 12:30

magicw wrote;

"I will be notifying RM that I m coming out of this scheme and Await the New DB scheme with interest."

Whether you follow through with this is entirely your decision. In my opinion I would see no gain in this action being that more total contributions are being paid into DBCB.

I made the decision to stay in the RMDCP based on my age, being PT & period of time in an interim scheme .
Also it was not clear if contributions into DBCB would be transferable to the new CDC scheme.

But I don't see your original decision is wrong & may turn out in your favour if the new scheme is not enacted.