Another pension plan

[freespeech]

Increase and decreases apply to every member, whether they're employed , deferred or retired.

So you could retire expecting to get £200 per month but this could be £100 or £300? How the hell can you plan like that? Thankfully my NRA60/65 stuff on it's own is "enough" so the NRA67 stuff is additional beer money. I'd hate to have another 20 years to go in RM with this pension coming in.

[RobertT]

The aim is it'll be similar to a DB scheme and increase by inflation each year, but that is dependent on the investments. I believe they will be designed to produce the desired returns but with as little volatility as possible.

The Anticipated Design booklet says:

100% in Return-Seeking Assets supporting pensions for members until age 67,

Switching uniformly from this position over a 23 year time frame to

100% in Low-Risk Assets supporting pensions for members from age 90 onwards.

The Section’s overall split of assets is to be the weighted average of the above holdings for the Section membership. This aggregate approach means that the Section’s investment policy is resilient to structural changes in the membership profile and the RMG workforce.

The above split is that required for invested assets, after excluding any cash holdings required for liquidity as advised as necessary by the Investment Adviser.

-3.3 Return Seeking and Low-Risk Components

The Return-Seeking Asset holdings are to target a good level of returns over the long term, and then the blend to a combination with Low-Risk Assets is to provide more stable support for members’ pensions once in payment.

The Return-Seeking Assets are a diversified growth portfolio, chosen so that:

the expected median level of returns is within a specified margin of that on a diversified global (currency hedged) equity portfolio, and
the volatility of returns is advised by the Trustees’ Investment Adviser to be as low as can reasonably and efficiently be achieved.

The Low-Risk Assets are an appropriate mixture of bonds and other low-risk assets which the Trustees’ Investment Adviser advises carry a ‘low risk’ (to be defined), and have an appropriate duration and nature given the remaining duration and expected level of price inflation linkage of the Section’s liabilities.

[Dindin]

Can I just ask the question? Why is no other firm taking this up?

[renrag40]

Can I just ask the question? Why is no other firm taking this up?

because no other firm has Terry Pullinger.

[heapsy]

Increase and decreases apply to every member, whether they're employed , deferred or retired.

So you could retire expecting to get £200 per month but this could be £100 or £300? How the hell can you plan like that? Thankfully my NRA60/65 stuff on it's own is "enough" so the NRA67 stuff is additional beer money. I'd hate to have another 20 years to go in RM with this pension coming in.

That is going to be the main problem for thousands. Most will end up working until state pension age because they cannot or will not put anything in place to bridge the gaps between their different pensions. THAT is the only way people will have control over when they can retire.

[Spoggy]

At the moment I pay in 6% RM pays in 10% into the RMDCP. All of it goes into the plan and I get to decide what to do with it at retirement ( lump sum, anniuty etc )

Now I get the choice of continuing a similar plan with Nest where I pay 5% and RM pays 3% which is a considerable amount less or join this new scheme.

On the new scheme it actually makes no odds to me how much RM pay in, my benefit is stuck at 3/80ths lump and 1/80th income. So the fact it is advertising they're paying in 13.6% is meaningless to me personally, in fact it makes me very suspicious of the documents impartiality if anything.

I don't know much about the RMPP as i've never been a part of it, but assume this scheme is either unworkable or not viable so a fix is needed. My question is why are the changes needed for RMDCP members ? Why can't I simply decide to continue with the RMDCP and save the Royal Mail the extra 3.6% contribution?

[RobertT]

At the moment I pay in 6% RM pays in 10% into the RMDCP. All of it goes into the plan and I get to decide what to do with it at retirement ( lump sum, anniuty etc )

Now I get the choice of continuing a similar plan with Nest where I pay 5% and RM pays 3% which is a considerable amount less or join this new scheme.

Or you could transfer your share out of the collective scheme to a DC scheme.

On the new scheme it actually makes no odds to me how much RM pay in, my benefit is stuck at 3/80ths lump and 1/80th income. So the fact it is advertising they're paying in 13.6% is meaningless to me personally, in fact it makes me very suspicious of the documents impartiality if anything.

The contribution levels are what's deemed to be adequate to pay out the benefits as advertised, plus investment growth. If they or we paid in less, the accrual rates would be lower.

I don't know much about the RMPP as i've never been a part of it, but assume this scheme is either unworkable or not viable so a fix is needed. My question is why are the changes needed for RMDCP members ? Why can't I simply decide to continue with the RMDCP and save the Royal Mail the extra 3.6% contribution?

Back in 2018 the RM and CWU came to the agreement, via the 4 Pillars negotiations, to introduce a collective scheme for all RM employees. That received a yes vote and after loads of legislation and regulation, here we are.

If anything we weren't expecting to get the choice to join a DC scheme instead, however low the rates are.

[Spoggy]

Back in 2018 the RM and CWU came to the agreement, via the 4 Pillars negotiations, to introduce a collective scheme for all RM employees. That received a yes vote and after loads of legislation and regulation, here we are.

So in effect the new scheme is available at a choice ( not collective for all ) and the RMDCP ( managed by Scottish Widows ) has been replaced by the Nest scheme.Why can't that alternative be in Scottish Widows with a 10% contribution by RM as now?

Pension and future arrangements are very much personal and based on long term personal planning. I, probably like many other responsible employees, have made long term personal plans based on that and it seems that the RM and CWU have come to an agreement to alter these plans. Where the RMPP is concerned I assume that is a large pot for all contributors and as such a democratic vote is right, but not the case for employees on the RMDCP.

[RobertT]

One of the advantages of a collective scheme is economies of scale, basically the more members it has the more efficient it is. So is costs less to invest money for 100,000 posties in one scheme, than it does for those same 100,00 posties to invest in their own separate DC schemes.
Therefore the aim is the end result is a better outcome than buying an annuity via a DC scheme.

That's the theory anyway!

The problem with that of course is that many currently with DC pensions don't want to buy an annuity and would rather use drawdown, or they want to access their money earlier than 67. Which is where transferring out or else going with Nest is the answer.

Personally I think there should be a choice to carry on in the RMDCP at current contribution rates. But I think that would also deter many from joining the RMCPP and therefore it potentially wouldn't work as planned.

I can only suggest you give the powers that be your feedback and see if it makes any difference.

[Woody Guthrie]

This really is a shot in the dark no matter how some try to sugar coat it.

There have been mixed reviews from the only country that's really tried this but the State pension in the Netherlands is much higher at around 70% of the national minimum wage which would equate to around £240 a week over here so they have a much larger safety net and therefore can take higher risks with what they consider a secondary pension.

This could end up as another pension scandal and to me will succeed or fail on the management of the investments, not the design of the scheme itself which despite the length of time it's taken to get here is pretty basic.

What the abolition of the decent DC scheme tells us is how desperate they are to get as many pressured into joining this scheme as possible.

I think the CWU misread the room over the DC pension completely, with decent contribution levels equivalent to what they're proposing for the CDC it's probably a better all round scheme than this collective punt, and more importantly it's proven over time.

[heapsy]

I'm curious to know what charges will be levied on the money going in to the CDC. Unless they are roughly the same as SW AVCs then it might not be such a great investment after all.

[Dindin]

So who's going into nest? Does anyone know how nest works ? Can they please help. Thanks

[RobertT]

So who's going into nest?

Not me!

Does anyone know how nest works ?

Yes!

Can they please help. Thanks

It's a DC pension similar to the current RMDCP, except for the lower contributions.
This will tell you more:
https://www.moneyhelper.org.uk/en/pensi ... on-schemes

And here's the Nest website:
https://www.nestpensions.org.uk/schemeweb/nest.html

[Murdoch]

This really is a shot in the dark no matter how some try to sugar coat it.

There have been mixed reviews from the only country that's really tried this but the State pension in the Netherlands is much higher at around 70% of the national minimum wage which would equate to around £240 a week over here so they have a much larger safety net and therefore can take higher risks with what they consider a secondary pension.

This could end up as another pension scandal and to me will succeed or fail on the management of the investments, not the design of the scheme itself which despite the length of time it's taken to get here is pretty basic.

What the abolition of the decent DC scheme tells us is how desperate they are to get as many pressured into joining this scheme as possible.

I think the CWU misread the room over the DC pension completely, with decent contribution levels equivalent to what they're proposing for the CDC it's probably a better all round scheme than this collective punt, and more importantly it's proven over time.

Exactrly right, if the money is mismanaged, we pay the price. Not Royal Mail.

And the other biggest issue. The retirement age being set at 67. Show me the terms for accessing my money earlier! Otherwise I'll suspect the terms are god awful.

Lets face it, who on earth wants to be a postie at 67. The way this job is going, most folk won't make it to 60.

[RobertT]

Exactrly right, if the money is mismanaged, we pay the price. Not Royal Mail.

The success of DC pensions is also down to investment returns and the people who manage the funds you invest in.

And the other biggest issue. The retirement age being set at 67. Show me the terms for accessing my money earlier! Otherwise I'll suspect the terms are god awful.
Lets face it, who on earth wants to be a postie at 67. The way this job is going, most folk won't make it to 60.

67 isn't great, but personally I see that as just when I can take it(assuming I don't take it early), just as it's also when I get my state pension. It isn't necessarily when I have to retire!

Many people will have other pensions tucked away either with RM or from other employers, which you don't have to wait until 67 to access in full. It's those schemes that will be important if you want to at least semi-retire earlier.

Ultimately it's your retirement and if you don't want to work until you drop, it's up to the individual to take charge of their own destiny. If what you've got isn't going to be enough for you, then it's down to you to do something about it.