Royal Mails pension solution

[egor110]

So next month royal mail are shutting the door on there defined benefit scheme and rather than going to defined contribution they and the union are looking at creating a new collective defined contribution scheme .

Collective defined contribution schemes differ from defined benefit pensions in the sense they do not guarantee certain incomes in retirement.

Instead, CDC have a target amount they will pay out, based on a long term, mixed risk investment plan.

These schemes also differ from the traditional DC plans, since they do not produce individual pension pots.

Instead they invest savings in a larger collective pot, which provides an income to individuals during their retirement

I think every postie will have to pay in until there 67 regardless of if they take early retirement to then get the new pension.

https://www.ftadviser.com/pensions/2018/02/21/dwp-...

[sidicks]

I’ve not analysed the detail, but these seems a decent compromise solution.

[Jockman]

Be interesting to find out the allocation arrangements.

When we ran a SSAS there were no real individual pots per se, more a notional earmarking of members value. This allowed us a wee bit of latitude when the time came to allocate funds to retiring members.

[egor110]

Think the aim is -

cdc pension is 1/80th of pensionable pay plus rpi revaluation

guaranteed dbcbs lump sum is 3/80th of pensionable pay with revaluation to date

there's a bit more here from one of the actuary's involved :

https://www.facebook.com/ThecommunicationsUnion/vi...

[Welshbeef]

They spoke about it briefly on R4 Today this week / however one key point raised is that now there are literally so few DB schemes left this would appeal to a tiny number.

Clearly anyone moved from DB to DC will never see it move back to a more favourable set up.

[egor110]

Welshbeef said:

They spoke about it briefly on R4 Today this week / however one key point raised is that now there are literally so few DB schemes left this would appeal to a tiny number.

Clearly anyone moved from DB to DC will never see it move back to a more favourable set up.

re royal mail the posties only options are this new scheme or bog standard defined contribution , defined benefit isn't on the table.