Help understanding Royal Mail pension calculations

maz_hartley

Anybody understand the Royal Mail Pension. My husband works for RM. He’s paid into the RM pension since 1986 and has been paying into it for 35 years and likely to retire in 10y from now. I’m just curious as to how they work out how much you’ll receive when you retire. He just wants a rough estimate of what he might get. Obviously it will be only be an estimate as his wage will have increased slightly in 10 y and he also has avc contributions that I won’t know how/can’t include in the calculations. But I’m only after a rough estimate as I know it can’t be exact. I assume it’s calculated something along the lines of his years service presumably no of years paying pension? divided by 1/80 or 1/60. But can anyone help explain things please

Dazed_and_C0nfused

Joining before 1987 means he would have pension from 3 different elements, a mix of DB (final salary), DB (CARE) and DC.

https://www.royalmailpensionplan.co.uk/section-ab

Does he not get an annual statement showing the benefits accrued to date?

dasherman

As an RM employee myself I know how confusing the pensions are, which is mainly due to various changes being made to them over the years.

He actually has final salary pension for service up to 2008, average salary pension for service 2008-2018 and a Cash Balance(DBCBS) from 2018 to present.

Those benefits will be paid out as NRA60 pension which represents all service up to 2010 and NRA65 pension which is for service from 2010 onwards.

The DBCBS isn't a DC scheme, it's to provide a lump sum when taking NRA65 benefits.

To make things even harder to understand benefits accrued up to 2012 are administered by the RM Statutory Pension Scheme, while benefits accrued afterwards are administered by the RM Pension Plan.

He should get an annual illustration each year, infact from 2020 he should be getting one each from the RMSPS and RMPP. 2021's will probably be sent around Sept/Oct.

The RMPP website is the best place to get detailed info. Particularly look in the media library where you'll find the 'member guide to benefits' and video tutorials: https://www.royalmailpensionplan.co.uk/

The RMSPS also have a website: https://www.royalmailsps.co.uk/

You can find out the value of his AVC's via the Scottish Widows Money4Life website: https://money4life.scottishwidows.co.uk/employee/, assuming you have login details.

But also bear in mind that all current RM pension arrangements will close(benefits preserved) when the new CDC scheme is introduced: https://www.myroyalmail.com/2018pensionreviewqanda

where_are_we

You and your husband should try to calculate the total of the various schemes using his last annual illustration. Use the pension helpline for any queries. If he is a member of the CWU get him to contact a CWU pension expert for more help. If he carries on working after 60 make sure he takes his NRA60 benefits at 60. This will supplement his wages until he retires.