Royal Mail Employee - AVC options?

Seagull

I started working for Royal Mail in March 1998, initially part time but shortly after I was made full time. I'll be 60 in June 2022 and I'm married.

I've only paid the standard pension contributions so far and I'm considering starting an AVC, but have I left it too late in life?

RM appears to offer different AVC schemes, but I'm not really sure which would be better for me.

My options are either

Bonusplan, up to 4.5% of earnings and my employer would match the amount paid in. A maximum of just under £150 per annum which doesn't sound like much.

Flexiplan, I can make regular payment, or a one off amount and the payment amount can be altered at any time.

Which plan would be the better option for me at this stage? Could I even contribute to both plans?

Thanks very much.

dasherman

I'm a RM employee and have been paying into both Bonusplan and Flexiplan for 25+ years and have made decent returns over the years.

Personally I would say saving anything extra is better than saving nothing extra, especially considering the benefits of both salary sacrifice(RM call it PSE) and tax relief.

Bonusplan might be small amounts, but it all adds up!

But be warned that the new CDC pension scheme is just around the corner and payments into the existing AVC's won't be allowed from then on. There will be two new AVC's specifically attached to CDC instead.

QrizB

I know nothing about the RM pension scheme but, on the face of it:

Seagull said:

Bonusplan, up to 4.5% of earnings and my employer would match the amount paid in. A maximum of just under £150 per annum which doesn't sound like much.

Free money (employer matching) is usually worth having. It's like having a pay rise.

pumi63

Hello everybody ,
I am also a Royal Mail employee , 7 years from retirement at 67 .

I have the Bonus Plan for 2 years now but wondering if i can afford loaf and butter on a postman wage !

So, i have got the paperwork for AVC and now wondering which are the best AVC fund options to invest percentage wise given the years i have left ?

I am on about £22000 now which makes minimum living life so roughly how much should i pay weekly into AVC , and the AVC investment split into the 7 different AVC funds offered by RM , managed by Scottish-Widows ?

Thank you for any advice you can offer 

dasherman

Generally speaking the more you can save the better.

Although I'm sure you're aware that Royal Mail are planning on starting the UK's first CDC scheme in the relatively near future – sometime in 2023.

That will mean the closure of both current schemes run by the company – the RMDCP and the RMPP, and also the stopping of any further contributions into the current AVC arrangements.

So you have limited time to invest in them.

For more info on CDC and what will happen to the current schemes, see here: https://www.myroyalmail.com/collective-plan

Xenon

OP
Have you tried RoyalMailChat forum for RM employees ?
They have a helpful pension section and are more than happy to help if you post on the site

Not sure if i am allowed to link ?

https://www.royalmailchat.co.uk/community/index.php

pumi63

Good evening everybody ,

Many thanks for replying . Are you saying that the Scottish Widows AVC scheme is going to cease ?

It may explain why i asked for the AVC paperwork to be sent from RM Pensions helpline since 4th and 11th March but they haven't sent anything !!

Pumi

fly-catchers

pumi63 said:

Good evening everybody ,

Many thanks for replying . Are you saying that the Scottish Widows AVC scheme is going to cease ?

It may explain why i asked for the AVC paperwork to be sent from RM Pensions helpline since 4th and 11th March but they haven't sent anything !!

Pumi

The Scottish Widows AVCs aren’t closing yet. Have you registered with their web site where you can view your Bonusplan? Being slow sending any paperwork is alas part and parcel of both RM pension schemes. Though Sheffield who handle the AVCs in setting up and ultimately paying it are miles faster than Capita who handle the final salary and the first 4 years of the Career average one. For me I was paying into the Growth Fund. But that was over 20 years so any ups and downs could be smoothed out. In your more limited timeframe a more cautious fund might be safer..