Pension question to JLR & BMW MINI workers

Pension question to JLR & BMW MINI workers

Author
Discussion

T6 vanman

Original Poster:

3,055 posts

98 months

Wednesday 26th April 2017
quotequote all
Hi all

Obviously in the news your pensions are changing....

Without getting into the politics of your changes ... What I'm asking is what are the actual changes,
Specifically and I'll give a hypothetical 50yr old with 25 years service currently paying for a 1/60 p/year DB scheme

The changes;
Will you acquire 25/60th of your final (best of ??) salary from what you currently have accrued or
Will you acquire 25/60th of your average salary from what you currently have accrued?

Moving forward from the changes and onto the DC scheme.
Is the payment into the DC scheme the same % of wage as what was collected from the DB scheme

Thanks guys for your reply







edc

9,230 posts

250 months

Wednesday 26th April 2017
quotequote all
T6 vanman said:
Hi all

Obviously in the news your pensions are changing....

Without getting into the politics of your changes ... What I'm asking is what are the actual changes,
Specifically and I'll give a hypothetical 50yr old with 25 years service currently paying for a 1/60 p/year DB scheme

The changes;
Will you acquire 25/60th of your final (best of ??) salary from what you currently have accrued or
Will you acquire 25/60th of your average salary from what you currently have accrued?

Moving forward from the changes and onto the DC scheme.
Is the payment into the DC scheme the same % of wage as what was collected from the DB scheme

Thanks guys for your reply
I doubt you will find a genuine JLR or pensions person to answer your question but asking whether the DB and DC schemes will contribute at the same percentage level is almost irrelevant. The whole scheme design and retirement outcome is different.

T6 vanman

Original Poster:

3,055 posts

98 months

Wednesday 26th April 2017
quotequote all
edc said:
I doubt you will find a genuine JLR or pensions person to answer your question but asking whether the DB and DC schemes will contribute at the same percentage level is almost irrelevant. The whole scheme design and retirement outcome is different.
Thanks
Although I am aware on the differences in schemes & outcomes (Maybe more painfully aware soon...!)and understand that more into a DC then more out... but wondered if the transfer to DC also altered the subscription levy beer

edc

9,230 posts

250 months

Wednesday 26th April 2017
quotequote all
For a DC scheme it's critical as to what the investment strategy is and what level of risk you are prepared to take to get the growth. In a DB scheme none of this really matters as by and large you have no input in it. DB schemes are in many ways easy to work out as they are formula driven. A DC scheme is comparable to purchasing each month a chunk of stocks and shares.

T6 vanman

Original Poster:

3,055 posts

98 months

Thursday 27th April 2017
quotequote all
edc said:
For a DC scheme it's critical as to what the investment strategy is and what level of risk you are prepared to take to get the growth. In a DB scheme none of this really matters as by and large you have no input in it. DB schemes are in many ways easy to work out as they are formula driven. A DC scheme is comparable to purchasing each month a chunk of stocks and shares.
Yes thanks .... understood,
What I'm more interested in is what is the usual procedure for the pension accrued in the DB scheme when it is closed,
Does this still get paid at final salary (for my employer calculation of best 3 averaged) or another calculation??

edc

9,230 posts

250 months

Thursday 27th April 2017
quotequote all
T6 vanman said:
Yes thanks .... understood,
What I'm more interested in is what is the usual procedure for the pension accrued in the DB scheme when it is closed,
Does this still get paid at final salary (for my employer calculation of best 3 averaged) or another calculation??
The answer is it depends on the scheme rules and/or what is agreed with the members. There should be a consultation period where all this will be detailed. I doubt JLR are going to make that public themselves.

T6 vanman

Original Poster:

3,055 posts

98 months

Thursday 27th April 2017
quotequote all
edc said:
The answer is it depends on the scheme rules and/or what is agreed with the members. There should be a consultation period where all this will be detailed. I doubt JLR are going to make that public themselves.
Yes I know .... These details would have been given to JLR / BMW MINI pension members to review and (I'm guessing consulted through Unite as part of a change in terms and conditions) therefore I was hoping a JLR / BMW MINI pension member on PH would answer my specific question(s),
Both BMW MINI & JLR changes have been widely in the media but I've not seen this specific detail
Hopefully one will see my question over the weekend

edc

9,230 posts

250 months

Thursday 27th April 2017
quotequote all
Are you in the scheme or just a curious bystander?

T6 vanman

Original Poster:

3,055 posts

98 months

Thursday 27th April 2017
quotequote all
edc said:
Are you in the scheme or just a curious bystander?
I refer you to my first answer yesterday 21:31

I may become painfully aware of pension scheme closure/transfer soon so I'm interested in ... how do we say .. 'industry standard outcomes'
HTH

edc

9,230 posts

250 months

Thursday 27th April 2017
quotequote all
Well I hope it works out for you. DB schemes closing is no new thing though it's been going on for years. I wouldnt hang your hat on an industry standard as there isn't one.

onedsla

1,114 posts

255 months

Friday 28th April 2017
quotequote all
I'd imagine that, in time, details will be made available here: http://jaguarlandroverpensions.com/

From personal experience of going through similar, this is what happened:
1) Final salary pension accrued 'locks in' at that highest salary at closure date. This is protected to a certain level against inflation (agreed in consultation).
2) New pension scheme (career average) introduced. Two options of contribution level, depending on inflation protection required.
3) In addition, DC scheme launched, with company matching contributions of up to 1.5% salary.
4) For retirees and deferred pensions, would not expect any changes.

I'm not following where this particular consultation is, but I'd expect negotiations will be along the lines of:
Company suggests (at best) very average pension offering.
Unions / employee representatives insist on no change, threatens (maybe even arranges) strikes etc.
Company comes back with a better offering (which was always the intention).
Unions etc agree to the new deal.