Section C index link changed from RPI to CPI?

FAB · Post by **FAB** » 09 May 2018, 19:15

I see they have updated the RM pension web site and have even added a section F part now as well!
Another change is where they say how the pension increases each year. Before the changes to the site it listed CPI in the section A/B section correctly and RPI on section C. Now they say CPI on section C as well! Only if you refer to the older details of your pension increases in the library part does it still say RPI. A sneaky way to change the index linking to save money by RM while we are not looking or just an error on that updated page?

Post by **stephen500** » 10 May 2018, 07:52

Section B increases by RPI till payment and then increases by CPI.

Post by **RobertT** » 10 May 2018, 16:38

The literature concerning section C has always had RPI increases when in payment, but CPI when in deferment when you’ve left RM but haven’t taken your pension yet.

Changing from RPI to CPI isn’t something that can be done without consultation and in some cases legal action. So I don’t believe it’s possible to bring it in ‘while we weren’t looking’, and that it is an error.

Although as an aside, there was a clause under the recent pension changes that any RMPP member opting for the RMDCP rather than the DBCBS would have already accrued pension treated as deferred and increased by CPI instead of RPI.

fishtank · Post by **fishtank** » 10 May 2018, 16:55

RobertT wrote:The literature concerning section C has always had RPI increases when in payment, but CPI when in deferment when you’ve left RM but haven’t taken your pension yet.

Isn't Section C technically in deferment for all of us now?

Post by **RobertT** » 10 May 2018, 17:48

fishtank wrote:Isn't Section C technically in deferment for all of us now?

Technically yes.

But if you’re a section C member and paying into the DBCBS which is a ‘new section of the RMPP’ then as I understand it, what you’ve already accrued should be going up with RPI.

It’s only if you leave RM or chose to pay into the RMDCP instead of the DBCBS, that your accrued pension truly becomes deferred and then increases with CPI.

To be honest, I'm not 100% sure what happens when/if the CDC scheme happens.

fishtank · Post by **fishtank** » 10 May 2018, 18:24

How will RMPP members’ benefits be revalued from 1 April 2018?

From 1 April 2018, Section C members’ pre-April 2008 benefits would be linked to increases in RPI (up to 5% a year) from that date until they leave Royal Mail employment or take their benefits, rather than to Final Salary pensionable pay at the date they leave.

These benefits will be increased in line with the Retail Price Index (up to 5 per cent a year), subject to certain exceptions.

Benefits between 1 April 2012 and 31 March 2014 include Career Salary Defined Benefit, Normal Retirement Age of 65 and ongoing Final Salary link from 1 April 2012

Benefits between 1 April 2014 and 31 March 2018 include Career Salary Defined Benefit, Normal Retirement Age of 65, increases in basic pensionable pay (Final Salary and Career Salary Defined Benefit) capped at Retail Price Index up to 5 per cent per annum

Section A/B members’ pre-April 2008 benefits would continue to be linked to the greater of:

increases in RPI (up to 5% a year) and;
Final Salary pensionable pay at the date they leave.

The Final Salary link is required under the Section A/B rules in order to maintain increases at RPI (up to 5% a year) in the Royal Mail Statutory Pension Scheme. This is not a requirement under the Section C rules.