Pension Pay Cut & Useless Union

[CHUCKYPIG]

4% used to come out of my pay packet towards a pension. I chose the lower rate because I am only on 27.5 hours and I struggle to make ends meet anyway.

An agreement between CWU & Royal Mail is now going to make me pay a minimum of 6%.

That's a 2% pay cut. I will probably be dead before I can draw my pension so I am annoyed that the union agreed to a mandatory pay cut.

Anyone else who was paying 4% who will now have to pay 6%?

[RobertT]

You can always join the Nest scheme instead and pay 5% with RM paying 3%.

That's opposed to joining the new collective scheme and paying 6% with RM paying 13.6%.

The new pension was part of the 4 Pillars agreement which got a massive yes vote from the CWU membership. I think it was about 90% if I remember correctly.

[RobertT]

Or are you actually talking about the current RMDCP contributions going up automatically?

I think you should be able to reduce it down again!

This is what the plan guide says:

If you join at the Standard Level you will be set up to pay a 6% contribution and your employer will pay 10%. If you wish to change your contributions, you need to complete and return a Choices form available from the Scottish Widows Royal Mail Service team or from scottishwidows.co.uk/save/royalmaildcplan

Once you are paying contributions at the Standard Level you can not reduce your contributions below 4% of Pensionable Pay or pay contributions at the Entry Level.

https://adviser.scottishwidows.co.uk/as ... 0353sw.pdf

[CHUCKYPIG]

You can always join the Nest scheme instead and pay 5% with RM paying 3%.

That's opposed to joining the new collective scheme and paying 6% with RM paying 13.6%.

The new pension was part of the 4 Pillars agreement which got a massive yes vote from the CWU membership. I think it was about 90% if I remember correctly.

Paying 5% with RM paying 3% is clearly s**t.

I used to pay in 4% with RM paying in 8%.

4 Pillars. Right OK. I think that was maybe voted before my time (I joined RM 2 years ago)

[CHUCKYPIG]

Or are you actually talking about the current RMDCP contributions going up automatically?

I think you should be able to reduce it down again!

This is what the plan guide says:

If you join at the Standard Level you will be set up to pay a 6% contribution and your employer will pay 10%. If you wish to change your contributions, you need to complete and return a Choices form available from the Scottish Widows Royal Mail Service team or from scottishwidows.co.uk/save/royalmaildcplan

Once you are paying contributions at the Standard Level you can not reduce your contributions below 4% of Pensionable Pay or pay contributions at the Entry Level.

https://adviser.scottishwidows.co.uk/as ... 0353sw.pdf

The new booklet they sent me the other day clearly states that the minimum you can pay in is 6% of pay

[RobertT]

Paying 5% with RM paying 3% is clearly s**t.

I used to pay in 4% with RM paying in 8%.

4 Pillars. Right OK. I think that was maybe voted before my time (I joined RM 2 years ago)

The 4 Pillars was voted for in 2018 and it's taken this long to sort out the legislation required to implement the new pension scheme.

The new booklet they sent me the other day clearly states that the minimum you can pay in is 6% of pay

You didn't make it clear, so I answered both possibilities!

[loyalsnail]

4% used to come out of my pay packet towards a pension. I chose the lower rate because I am only on 27.5 hours and I struggle to make ends meet anyway.

An agreement between CWU & Royal Mail is now going to make me pay a minimum of 6%.

That's a 2% pay cut. I will probably be dead before I can draw my pension so I am annoyed that the union agreed to a mandatory pay cut.

Anyone else who was paying 4% who will now have to pay 6%?

Going from 4% contributions to 6% contributions doesn't constitute a 2% pay cut, unless you're rounding to the nearest whole percent; it's actually more like 2.1% but as others have stated it comes with a significantly higher employer contribution to pension... Not ideal if you're struggling to make ends meet but compounded would make a huge difference in retirement.

50% increase in personal pension contributions for a 70% increase in employer contributions.

[cpsteve]

You can come out of the pension if you wish then you pay nothing id think about it before you did its an important decision.

[Iva bigredbag]

You can always join the Nest scheme instead and pay 5% with RM paying 3%.

That's opposed to joining the new collective scheme and paying 6% with RM paying 13.6%.

The new pension was part of the 4 Pillars agreement which got a massive yes vote from the CWU membership. I think it was about 90% if I remember correctly.

That would be 90% of all those who voted, which would be a lot less than 90% of eligible voters. Maybe less than 50% of all eligible members voted, right or am I getting this mixed up with another vote?

[renrag40]

You can always join the Nest scheme instead and pay 5% with RM paying 3%.

That's opposed to joining the new collective scheme and paying 6% with RM paying 13.6%.

The new pension was part of the 4 Pillars agreement which got a massive yes vote from the CWU membership. I think it was about 90% if I remember correctly.

That would be 90% of all those who voted, which would be a lot less than 90% of eligible voters. Maybe less than 50% of all eligible members voted, right or am I getting this mixed up with another vote?

An agreement was made and then was voted on by the membership. Everyone, who was a member of the union, had the right to vote, yes, no or not vote at all. The fact that the agreement was voted in before you joined RM has no bearing on its validity. The percentage of the membership that voted, again has no bearing on the validity of the vote. It was their right to vote or not. We have had a conservative government for 11 years, at no time have they achieved 50% of the votes cast. Nevermind, 50% of the actual electorate.
I didn’t get a vote on the closing of the final salary scheme to further accrual in 2008, the increasing of the nra from 60 to 65 in 2010, the removal of the link between actual salary and pensionable salary in 2014 and the closing of the career average scheme in 2018. All these changes were imposed and all reduced what my pension benefits would ultimately be. So, I find it strange that you are complaining about paying 2% more when RM will be paying 5.6% more into your pension than they do at present. This increase in contributions will compound over time and give you a far greater pension than would have been generated by your present lower contributions.
You have a choice..... by law you have to contribute to a pension. So, join the new scheme or join the governments NEST pension scheme.

[mr hil.]

I didn't think there was a requirement in law for you to contribute to a pension whilst in employment. Employers Must auto enrol you but you are able to opt out, you would have to opt out every three years if you wish to continue not contributing to a workplace pension.

[RobertT]

4% used to come out of my pay packet towards a pension. I chose the lower rate because I am only on 27.5 hours and I struggle to make ends meet anyway.

An agreement between CWU & Royal Mail is now going to make me pay a minimum of 6%.

That's a 2% pay cut. I will probably be dead before I can draw my pension so I am annoyed that the union agreed to a mandatory pay cut.

Anyone else who was paying 4% who will now have to pay 6%?

I can sympathise with struggling to make ends meet on 27.5 hours per week.

Based on just basic pay, I estimate your gross contributions of 4% are currently £19.86, although factoring in tax relief and PSE, that is actually a net of £13.50, with the tax man picking up the rest.

If that goes up to 6%, the gross will be £27.48, with a net of £18.68.

In return for that extra £5.18 you're also getting another 5.6% from RM, which in money terms would be £25.64 per week.

So if you take the longer term view that your pension is there to fund your retirement, you actually have another £30 per week towards to that aim.

[RobertT]

You have a choice..... by law you have to contribute to a pension. So, join the new scheme or join the governments NEST pension scheme.

I didn't think there was a requirement in law for you to contribute to a pension whilst in employment. Employers Must auto enrol you but you are able to opt out, you would have to opt out every three years if you wish to continue not contributing to a workplace pension.

Every employer has to offer their workers a pension scheme and pay in at least 3%, with another 5% coming from the employee.

Every employee meeting certain criteria has to be auto-enrolled into their workplace pension at least every 3 years, if they're not already a member.

There is nothing stopping an employee opting out at any time, so there is no compulsion to join any pension scheme at all.

Although opting out is generally a very poor decision.