Guide to Benefits - Royal Mail Pension Plan
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B1
Guide to
Benefits
For Section
A/B and C members
This guide contains an overview of the Section
A/B and C benefits of the Royal Mail Statutory
Pension Scheme (RMSPS) and the Royal Mail
Pension Plan (RMPP).
Royal Mail
Statutory Pension Scheme Royal Mail Pension PlanIntroduction
Contents
This guide explains the benefits you get Employees are notified by Royal Mail
Introduction 3 as a member of the Royal Mail Pension when they are about to be eligible to
Plan (the RMPP). join the RMPP – this notification includes
Who is this Member Guide for? 3 a form for members to complete and
Membership of the RMPP continues
The 2012 Pension Transfer 3 return if they wish to opt out of the
to be open to Royal Mail employees
Your pension benefits up to 31 March 2018 – Section B 4 RMDCP and join the RMPP.
who started work for Royal Mail
Your pension benefits up to 31 March 2018 – Section C 6 before 1 April 2008. With effect from The transfer in of benefits, from
Your benefits built up from 1 April 2018 9 1 April 2018, membership of the RMPP the RMDCP or elsewhere, is not
is open to Royal Mail employees who generally permitted.
have at least five years’ service with
Cash Balance section 10
the Company including four years’
Overview 10 continuous service at the standard
Contributions 10 contribution rate in the Royal Mail
Defined Contribution Plan (the RMDCP).
How Cash Balance works 11
Benefits 12 Who is this
Benefits paid on ill health or death 13 Member Guide for?
Leaving the RMPP 15
This guide is for you if you joined the RMPP
When it’s time to pay your benefits 18
prior to April 2018 and you are either a member
Your pension benefits and tax 19 paying into the RMPP and building up benefits
Other useful information and common questions 20 (‘Employee members’) or you have left since
Data Protection 22 1 April 2018 but not yet taken your benefits.
Complaints 23
The RMSPS looks after and pays the
The State Pension 24 The 2012 Pension benefits built up by members of the
Transfer RMPP before 1 April 2012. The RMPP
Glossary of terms 25 is responsible for paying your benefits
Responsibility for looking after and
which continued to build up on and
paying your pension benefits is shared
Contact information 29 from this date. Whilst we expect you will
between Government and Royal Mail.
eventually receive part of your benefits
Pensions Service Centre 29 That’s because the Government set
from the RMSPS and part from the
Other useful contacts 30 up the Royal Mail Statutory Pension
RMPP, the calculation of the separate
Scheme (RMSPS) to take on the
benefit components is designed to
majority of the assets and liabilities
achieve an outcome where the overall
of the RMPP in 2012.
amount will be no less than if the
transfer had not happened.
2 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 3You are also entitled to a lump sum continue to be revalued up to the last
Your pension benefits up to 31 March 2018 which is linked to the value of your renewal date before you take your
– Section B pension. The lump sum is typically benefits or leave reckonable service.
three times the total pension from 1
Royal Mail and the Trustee of the respect of your reckonable service up After 2018 (whilst you remain in Company
and 2 – see page 4.
RMPP agreed to close the existing to 31 March 2018. The retirement ages employment) your final salary pension
defined benefit within Section B, to the in Section B are 60 and 65 (depending The maximum combined pension (i.e. related to reckonable service up to
future build up of benefits, with effect on the period of service). The way your in respect of service up to 31 March 31 March 2008) will continue to be linked
from 31 March 2018. If you originally pension and tax-free cash built up was a 2018 is equal to that calculated using to your pensionable salary. Your CSDB
joined the RMPP before 1 April 1987, you mixture of a ‘Final Salary’ calculation a maximum of 45 years’ reckonable pension blocks and lump sum blocks
would have been in Section B. A very (up to 2008) and a ‘Career Salary’ method service. If you completed more than 45 (for reckonable service from 1 April 2008
small number of members still in service since then. Both calculations combine to years’ reckonable service you would not to 31 March 2018) will continue to increase
may have joined before 1 December provide you with a pension and tax-free have built up any further pension blocks in line with inflation as measured by the
1971. If that’s you, you would have been cash amount linked to your pay and the but, provided you continue in reckonable Retail Prices Index up to a maximum
in Section A. You’ll have the option to length of time you were contributing service, all your pension blocks will of 5%.
have your benefits paid under Section B – up to a maximum of 45 years’ service.
terms and it will almost certainly be in
your interest to do so. We‘ll explain the You can take your benefits without
differences when we write to you before reduction on reaching your Normal How are my pension blocks and lump sum blocks calculated?
you take your benefits. Retiring Age (NRA) - this is age 60 for
benefits built up to 31 March 2010 and For your reckonable service on and after will be added to the previous years’ blocks.
Section B will provide you with a pension age 65 for benefits built up thereafter 1 April 2008, your pension builds up year When you come to take your pension, the
and tax-free cash at retirement in (as shown below). by year. Your pension will be equal to overall benefit amount will be:
1/80th of your CSDB pensionable pay
earned each year (or part year). You will
The total of all the blocks earned
Final Salary Career Salary also build up a lump sum benefit each
while you were in reckonable service.
year of (typically) three times the value
Age60 Benefits Age65 Benefits of the pension. These are your pension
blocks and lump sum blocks.
The revaluation increases while
2008 2010 2018 Each pension block and lump sum you were in reckonable service.
block is revalued at the end of the
following Plan Year (on the renewal
date), and thereafter on each subsequent Any reduction for taking benefits
The benefits up to 31 March 2018 will be calculated as follows:
renewal date, for as long as you remain
before your Normal Retiring Age.
in reckonable service. They will be
1. For your reckonable service up or your reckonable service on
2. F
increased in line with the annual increase
to and including 31 March 2008: and after 1 April 2008: The RMPP will pay a sum which is equal
in the Retail Prices Index (RPI), as at
our pension is worked out as
Y Y
our pension is calculated as the total to the overall benefit described above,
the previous September, subject to a
1/80th of your pensionable salary of your revalued pension blocks earned maximum of 5% and a minimum of 0% less what you would have had from the
for each year (or part year) of up to 31 March 2018. You can find out each year. RMPP if this calculation were done as
reckonable service completed more about how your pension blocks at 31 March 2012 (plus revaluation). In
before 1 April 2008. are calculated on the next page. For each year that you remain addition, the RMSPS will pay a benefit in
contributing, the pension blocks and respect of your pre 1 April 2012 service.
lump sum blocks you build up for that year
4 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 5The chart below shows how your pension blocks build up while you are a member
Final Salary Career Salary
– assuming that the revaluation increase is 2.5% each year. In practice, the actual
increase each year will depend on the applicable annual increase in RPI each year
Age60 Benefits Age65 Benefits
subject to a maximum of 5% and a minimum of 0% each year.
CSDB pensionable pay 2008 2010 2018
£326.48
£26,118 ÷ 80
If your Normal Retiring Age in
£621 x 2.5% £15.52 The benefits up to 31 March 2018 relation to benefits being taken is
will be calculated as follows: before your State Pension age, and you
choose to take your Age60 pension or
CSDB pensionable pay 1. For your pensionable service up
£313.50 Age65 pension and leave the Company
£25,080 ÷ 80 to and including 31 March 2008:
before State Pension age, you will also
Y
our pension is worked out as receive a pension supplement that
£300 x 2.5% £7.50 £621.00 1/60th of your pensionable pay is payable until you reach State
for each year (or part year) of Pension age.
pensionable service completed
CSDB pensionable pay
£300.00 £300.00 before 1 April 2008. The maximum combined pension
£24,000 ÷ 80
in respect of service up to 31 March
2018 is equal to that calculated using
Year 1 Total Year 2 Total Year 3 Total a maximum of 45 years’ pensionable
= £400 = £621 = £963 2. F
or your pensionable service
service. If you completed more than
on and after 1 April 2008:
Key 45 years’ pensionable service you would
You also build up a lump sum benefit Y
our pension is calculated as the
Pension built up during year not have built up any further pension
each year, in a similar manner, of total of your revalued pension
Revaluation increase on previous years’ total blocks but, provided you continue in
(typically) three times the value of blocks earned up to 31 March 2018.
Total pension value from previous year pensionable service, all your pension
the pension. You can find out about how your blocks will continue to be revalued
pension blocks are calculated up to the last renewal date before
Your pension benefits up to 31 March 2018 on page 8. you take your benefits or leave
– Section C pensionable service.
Royal Mail and the Trustee of the RMPP pension built up was a mixture of a ‘Final After 2018 (whilst you remain in Company
agreed to close the existing defined Salary’ calculation (up to 2008) and a employment), your final salary pension
benefit within Section C, to the future ‘Career Salary’ method since then. Both (i.e. related to pensionable service up to
build up of benefits, with effect from calculations combine to provide you with 31 March 2008) and your CSDB pension
31 March 2018. If you originally joined a pension amount linked to your pay and blocks (for pensionable service from
the RMPP on or after 1 April 1987, the length of time you were contributing 1 April 2008 to 31 March 2018) will
you would have been in Section C. – up to a maximum of 45 years’ service. continue to increase in line with inflation
measured using the Retail Prices Index up
Section C will provide you with You can take your benefits without to a maximum of 5%.
a pension at retirement in respect reduction on reaching your Normal
of your pensionable service up to Retiring Age (NRA) – this is age 60 for
31 March 2018. The retirement ages in benefits built up to 31 March 2010 and
Section C are 60 and 65 (depending age 65 for benefits built up thereafter
on the period of service). The way your (as shown below).
6 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 7How are my pension blocks calculated?
CSDB pensionable pay
£436.30
For your pensionable service on and The RMPP will pay a sum which is equal £26,178 ÷ 60
after 1 April 2008, your pension builds to the overall benefit described above,
up year by year. Every year, on 31 March, less what you would have had from £828 x 2.5% £20.70
your pension block for that year is the RMPP if this calculation were done
worked out as follows: as at 31 March 2012 (plus revaluation).
In addition, the RMSPS will pay a benefit CSDB pensionable pay
£418.00
£25,080 ÷ 60
Your CSDB pensionable pay ÷ 60 in respect of your pre 1 April 2012 service.
The following chart shows how your
For each year that you remain £400 x 2.5% £10.00 £828.00
pension blocks build up while you are a
contributing, the pension blocks you member – assuming that the revaluation
build up for that year will be added increase is 2.5% each year. In practice, CSDB pensionable pay
£400.00 £400.00
to the previous years’ blocks. the actual increase each year will depend £24,000 ÷ 60
on the applicable annual increase in RPI
To protect your benefits against inflation
each year, subject to a maximum of 5% Year 1 Total Year 2 Total Year 3 Total
during your membership of the RMPP,
and a minimum of 0% each year. = £400 = £828 = £1,285
the pension blocks you have built up
will be revalued on 31 March in the Key
following year in line with the annual
Pension built up during year
increase in the Retail Prices Index (RPI)
Revaluation increase on previous years’ total
as at the previous September, subject Total pension value from previous year
to a maximum of 5% and a minimum of
0% each year for as long as you remain
in pensionable service. When you take
your pension, the overall benefit amount Your benefits built up from 1 April 2018
will be:
Following a consultation run by Royal benefits you will be building up from
Mail with its employees and unions, the 1 April 2018.
The total of all the pension
existing defined benefit sections within
blocks earned while you were The new benefit sections within Sections
the Section B and Section C of the RMPP
in reckonable service. B and C of the RMPP – provide Cash
were closed on 31 March 2018 to the
future build up of benefits. Royal Mail has Balance benefits with effect from 2018.
introduced new sections within Sections
Everyone who was already a member
The revaluation increases while B and C where your benefits will build up
of RMPP and still working for Royal
you were in reckonable service. on and from 1 April 2018. They build up in
Mail automatically joined the new Cash
a different way from before.
Balance section (within their existing
All the benefits you built up before Section B or C) on 1 April 2018. If you
Any reduction for taking benefits 1 April 2018 (as shown above) will be held don’t do anything, you will stay in this
before your Normal Retiring Age. securely in the RMSPS and the RMPP, but you can ask at any time to opt out
to be paid when you reach the Normal of membership of the RMPP and to join
Retiring Age together with the new the RMDCP.
8 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 9Cash Balance section How does Cash Balance work?
The Cash Balance section provides you Trustee) also sets the policy regarding
contributions (both your own and the
with a cash sum at age 65 which can be discretionary increases and may revise it
Overview Company’s) that were due during your
used as described in the Benefits section from time to time. The policy is currently
absence, based on the pay you would
The objective of the Cash Balance of this guide on page 12. You will build up to target annual increases in excess of
have received had you not been absent.
section is to provide you with a If you choose to do this, your Cash Balance this cash lump sum each year at a rate inflation as measured by the Consumer
cash sum at age 65 (and in some benefit will be treated as having built up set by Royal Mail. Currently, the rate is Prices Index (CPI), with such increases
circumstances at age 60 too). over the period you were absent in the same 19.6% of each year’s CSDB pensionable capped at a rate of 4% above CPI for each
You contribute towards this and way as it would have done if you had not pay with further increases to the lump year. Discretionary increases, if awarded,
the Company contributes too. been absent. Reservists have three options sum being targeted each year. If the rate apply each 31 March with the first such
as set out on the ‘Life Events, Taking a at which the cash lump sum builds discretionary increase expected to apply
break from work’ page of the website. up changes in the future, Royal Mail on 31 March 2020.
will notify you. Royal Mail (not the
Family leave (maternity,
Contributions paternity and adoption leave)
You pay 6% of your CSDB pensionable Pension contributions are not affected £18,000.00
pay towards your Cash Balance benefit, during paid or statutory family leave. £16,000.00
so if your pensionable pay is £300 per This means that both you and the Company£15,000.00
week then your contribution will be continue to pay contributions, although
£12,000.00
your contributions will be based on the
£300 x 6% = £18 per week. £10,000.00 Cash Balance built up in year
actual pay you receive. Your benefits build
up in the same way as if you had worked £8,000.00 Cash Balance increase
The Company also contributes towards over previous year's total
your Cash Balance benefit (currently normally throughout your period of leave. £6,000.00
Total Cash Balance
at the rate of 13.6% of your CSDB £4,000.00 from previous years
pensionable pay). The Company may
Can I pay more than the 6% amount?
£2,000.00
decide to vary the member and/or If you want to save more for your retirement,
£0.00
Company contribution rates from time you can make Additional Voluntary
Year 1 Year 2 Year 3
to time and will notify you if this happens. Contributions (AVCs). These contributions
will be invested into your separate AVC
account. You’ll need to keep the account
What if I work part-time? invested until you take your main benefits. Your final Cash Balance benefit at age 65 is the total of each year’s benefit built
The contributions you pay towards your You’ll also need to make decisions about
up and any discretionary increases actually awarded. We’ll show how your fund is
Cash Balance benefit (and those from where to invest your AVC account
building up, in your Benefit Illustration.
your employer) are based on the actual (although there is a ‘Lifestyle’ option for
pay you receive. To put it another way, members who do not wish to actively
if you work half the hours of a full-time manage their AVC investments). You
employee, your contributions (and the can download a copy of the ‘Guide to
Cash Balance benefit) will be Additional Voluntary Contributions’ from
half the amount of theirs. royalmailpensionplan.co.uk or you can
request a copy from the Pensions Service
What if I am absent from Centre; their details are given on the
work and not being paid? back page. You can also pay into other
If you have a period of unpaid absence non-Company pension arrangements if
you may, on your return to work, pay all you wish, such as a personal pension plan.
10 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 11Benefits
Your Cash Balance section is designed to provide you with a tax-free cash amount You can take some of your pension and You will also have the option of
when you take pension benefits. We take into account the benefits you built up before tax-free cash (built up before 1 April 2010) taking some or all of your benefits
1 April 2018, your Cash Balance benefit and any AVC funds in order to work out the unreduced when you reach age 60 and together from age 55 under the
maximum permitted tax-free cash you can take (this is set by HM Revenue & Customs some when you reach age 65 (these are flexible pension provisions and
and is generally 25% of the value of your total benefits in the RMPP). what we call Normal Retiring Ages). remain in employment. Please refer
to the booklet ‘Flexible Pension: Your
By putting your Cash Balance benefit (and any AVC funds) towards your tax-free cash You will be entitled to receive your options’ for details of these options.
entitlement, you may not have to give up so much (or any) of the pension you built up benefits unreduced when you reach A copy can be downloaded from
before 1 April 2018 to provide tax-free cash. Normal Retiring Age (NRA). You have royalmailpensionplan.co.uk or is
two NRAs as follows: available from the Pensions Service
Section A/B Example
Centre; their contact details can be
• F
or service up to and including
(a) Pension £6,000pa Value for LTA purposes: £120,000 found on the back page of this guide.
31 March 2010, the NRA is your
(pre 2018) £6,000 x 20
60th birthday. These are your Can I take early retirement?
(b) Lump Sum £18,000 Value for LTA purposes: £18,000 Age60 benefits; and
Depending on the circumstances, and
(pre 2018)
• F
or service on and from 1 April 2010 subject to Company consent, where
(c) Cash Balance £20,000 Value for LTA purposes: £20,000 (including your Cash Balance fund), you retire earlier than the applicable
(post 2018) the NRA is your 65th birthday. NRA, you may be able to take early
These are your Age65 benefits. payment of your benefits from age 55.
(d) AVC Fund £2,000 Value for LTA purposes: £2,000 Your benefits may be reduced to take
(pre and or post 2018) You can take your Age60 benefits account of early payment.
without reduction when you reach age
TOTAL £160,000
60 and your Age65 benefits without
25% of £160,000 is £40,000. This means that (b), (c), and (d) can all be taken as tax-free cash and reduction when you reach age 65.
it also means that the maximum tax-free cash does not require any of the £6,000pa pension in (a) Benefits in the RMPP must be taken at
to be given up.
the same time that the benefits with the
Section C Example same NRA are taken from the RMSPS.
(a) Pension £7,500pa Value for LTA purposes: £150,000
(pre 2018) £7,500 x 20 Benefits paid on ill health or death
(b) Pension supplement £1,200pa Value for LTA purposes: £24,000 Membership of the RMPP provides Ill Health Retirement
(pre 2018) £1,200 x 20 financial protection for you and If your employer decides that you are
your dependants throughout your no longer able to work because of a
(c) Cash Balance £50,000 Value for LTA purposes: £50,000 working life. The following sections health condition, they may retire you
(post 2018) give a brief outline of these benefits. on ill health grounds. In that case, as
(d) AVC Fund £8,000 Value for LTA purposes: £8,000 long as you are not already taking your
(pre and or post 2018) Age65 benefits, you’ll get the pension
and lump sum you’ve built up so far,
TOTAL £232,000 including the actual value of your Cash
25% of £232,000 is £58,000. This means that (c) and (d) can be taken as tax-free cash and it also Balance benefit (i.e. not reduced to
means that the maximum tax-free cash does not require any of the £7,500pa pension in (a) to be reflect early payment).
given up.
12 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 13Leaving the RMPP
Death in service benefits Dependants’ pensions – for a spouse or If one of the following events applies Automatic enrolment
civil partner or, if you are not married to you then you will stop paying into If you choose to opt out of the RMPP,
There may be a cash sum payable
or in a civil partnership, someone who the RMPP and stop building up any without leaving Company employment,
to your dependants when you die.
was financially dependent on you – may further benefits: you will most likely be enrolled into
The amount of any cash sum payable
also be payable. The pension is up to the Royal Mail Defined Contribution
will depend on your circumstances • You leave Company service;
half of the pension you built up before Plan (RMDCP) or another registered
at the time, for example whether:
1 April 2018 including revaluation since • Y
ou continue in Company service, arrangement. This is because the law says
• Y
ou are still working for the Company then. Pensions can also be paid to your but choose to begin receiving your that employers must offer a workplace
and contributing to the RMPP; children, usually until they turn 18. Age 65 benefits; or pension to their employees (unless
certain exceptions apply). For more
• Y
ou have begun receiving some If you were working part-time, the • Y
ou continue in Company service information about automatic enrolment,
or all of your benefits; or pensionable salary/pensionable pay but choose to opt out of the RMPP. including the qualifying requirements,
used in the lump sum death-in-service
visit gov.uk.
• You have left Company service or calculation is not adjusted to the In these circumstances you will be
chosen to leave the RMPP and so full-time equivalent. It will be based entitled to preserved benefits as What happens to my benefits
have deferred benefits in the RMPP. on your actual pensionable salary/ detailed below, or you may have the if I leave or opt out?
pensionable pay. option to transfer your benefits to You won’t lose the benefits you have
If you die in service and are not yet
another pension scheme. built up while you were working and
receiving any pension payments, a You should take the time to complete
lump sum of four times your pensionable contributing. You will be entitled to a
the relevant direction/nomination of If you choose to opt out of the RMPP
salary/pensionable pay at the date of ‘preserved benefit’ (sometimes called
death benefits forms to guide us when you must give two months’ notice if you
your death will be paid, plus the actual a ‘deferred benefit’). This simply means
taking decisions about who should are paid monthly and two weeks’ notice
value of your Cash Balance benefit that we work out how much benefit you
receive these benefits. if you are paid weekly. You will not be
(i.e. not reduced for early payment). have earned up to the date you leave
able to re-join the RMPP if you opt out.
If you leave a spouse, civil partner, Death benefits are also payable on death the RMPP and look after it until you
Contact your HR Service Centre if you
child or other dependant, a further in deferment and may be payable on reach Normal Retiring Age when we
wish to opt out.
two times your pensionable salary/ death in retirement. can pay it to you.
pensionable pay is payable.
14 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 15Your preserved benefits will be made up of the following: • If you are over age 55 and we agree
that you can take your benefits on You can find out more about
Benefits built up before Benefits built up on and from compassionate grounds - for example transferring your benefits on our
1 April 2018 1 April 2018 because you have to give up work to website – including some of the
be a full-time carer for your spouse, things you should think about
Your pension (and tax-free cash for Your Cash Balance benefit
civil partner or another close relative before making any decisions
Section A/B members)
or partner – some or all of your and how to protect yourself
benefits will be reduced. Please from scams and ‘unauthorised’
Your fund arising from paying Additional Voluntary Contributions (AVCs),
contact the Pensions Service Centre transfers which can cause you
if applicable
for further details. to lose your pension benefits
or suffer very high tax charges.
Section A/B – While your pension and For each of these circumstances, if the
When will my preserved Visit royalmailpensionplan.co.uk
lump sum related to benefits earned Trustee/Company agrees that your
benefits be paid? for details.
before 1 April 2018 (excluding AVC funds) RMPP benefits can be paid early, the
Your Age60 benefits and Age65
are preserved by us, the part that does Manager of the RMSPS will pay your
benefits will typically start to be paid
not relate to the Guaranteed Minimum RMSPS benefits at the same time. Charges and how to obtain
when you reach the relevant Normal
Pension (GMP) will be increased in line
Retiring Age. We’ll write to you further information about
Can I transfer my preserved
with Pension Increase (Review) Orders
beforehand to tell you how much your your benefit options
benefits somewhere else?
issued by Government. The GMP part Generally there are no charges levied if
benefits are and explain your options.
of your preserved benefits will be Instead of preserved benefits, you can
you ask us to transfer your benefits to
increased by the RMSPS up to the You may also be able to take your ask that a transfer value be paid into
another pension scheme nor are there
date you take your benefits in line with preserved benefits before Normal Retiring another registered pension scheme.
charges if your benefits are paid to you
regulations relating to GMP. Age in any of the following situations:
The receiving pension scheme by us. We reserve the right to charge
Section C – Until your pension is paid, could be: if you request a transfer value within
• A
s long as you have reached the age
the part that does not relate to the 12 months of the previous quotation,
of 55 you can apply to have either your
Guaranteed Minimum Pension (GMP) • A
new employer’s scheme (if they or if the transfer value request relates
Age60 or Age65 benefits (or both)
will be increased in accordance with allow transfers into their scheme); to matrimonial proceedings.
paid early. Any benefits paid before the
legislation. The GMP part of your relevant Normal Retiring Age will be • A
personal pension scheme; or
preserved pension will be increased reduced to take account of the early
by the RMSPS in line with regulations payment. If you are 55 or over, you can • A
buy-out policy with an Further details on those charges,
related to GMP. get an estimate of the value of your insurance company. and about your benefit options,
benefits by contacting the Pensions can be obtained from the
While your Cash Balance benefit is Pensions Service Centre – their
Service Centre.
preserved by us, it remains eligible for contact details are shown on
Please note: It is not possible to
any discretionary increases awarded. • If you are unable to work because of ill the back page.
transfer your pension to another
Royal Mail’s policy regarding annual health at any time after you have left Royal Mail Group/Post Office
increases is described on page 11. the RMPP, you can apply to have your Limited pension scheme.
benefits paid early. If your application
is accepted, your benefits will be paid
without any reduction. You can find
more information about how to apply
and the ill health standard that you
need to meet on our website
royalmailpensionplan.co.uk.
16 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 17When it’s time to pay your benefits Your pension benefits and tax
Unless you have already asked us to pay Ensuring you receive your Both the RMSPS and the RMPP • You can take a tax-free cash amount
your benefits early, we will contact you pension regularly are registered pension schemes. when your pension starts (up to
before you reach Normal Retiring Age We have a responsibility to make sure The advantages of this are that: certain limits).
(60 or 65) to ask you how you would like that pensions are only being paid to • Y
ou normally receive income tax relief When it is paid, your pension is treated
to take your benefits. You will normally people who are entitled to receive them. on the contributions you pay to the as income and taxed. The amount of
have a choice about how much of your That means that from time to time we RMPP up to the level of the Annual tax you pay (if any) will depend on your
benefits are paid as a regular income may ask for evidence to help confirm Allowance (see below). individual circumstances at the time such
(pension) or as a one-off tax-free that is the case.
cash amount. • Investments in the RMPP build up as whether you have any other income
Assignment mostly free tax-free, and and what tax-free allowances apply.
Your pension will be paid directly into
Generally, benefits may not be assigned
your bank or building society on the last
by you to anyone else and they cannot be
working day of each month. We expect Annual Allowance Lifetime Allowance
used as security for loans. If any attempt
that you will receive two payments – one
is made to assign a benefit, the benefit The Annual Allowance is a limit to the The Lifetime Allowance is the maximum
from the RMSPS and one from the RMPP
will cease to be payable. There are total amount of benefits that you can amount of pension savings you can build
– the total of which will be your overall up over your lifetime which can receive
occasions where the law may override build up (or contributions you can pay)
pension entitlement each month. Before tax relief. It is set by government and
this rule, for example, on divorce (or each year, for tax relief purposes. The
you begin receiving your pension, we reviewed regularly. It is set at a high level,
dissolution of a civil partnership) where Annual Allowance applies across all of
will send you details so you know what so it is unlikely that most members of
courts can require that part of a pension the schemes you belong to (if you pay
amounts you can expect to receive. the RMPP will be affected by it.
is paid to a former spouse/civil partner. into schemes other than just the RMPP)
and includes all of the contributions that Pension benefits need to be valued at
When you start to receive your pension
Don’t lose your entitlement you or your employer pays. The limit is certain times – this will usually only be:
we will send you a copy of the guide
‘Your pension payments and increases It’s very important to keep the set by the Government and sometimes • When you start to receive your
– Section A/B members’ which contains administrators informed if you move changes, in the Budget for instance. pension/tax-free cash; and
more information about how pensions house. As explained above, we may
The vast majority of members will not • If any lump sum is paid in the event
are increased during payment. contact you from time to time to confirm
of your death.
your continued entitlement to a pension. have to worry about exceeding the
Also we send you important information Annual Allowance and there are ways to Broadly speaking, the annual pension
about your pension each year. If post is reduce the impact or use your pension you have built up is multiplied by 20
Further detail is also benefits to offset any tax that might and added to the tax-free cash you are
returned to us marked ‘gone away’ or
available on our website apply if you do exceed it. entitled to in order to arrive at the ‘capital
‘not known’ and we can’t trace you, your
royalmailpensionplan.co.uk. value’. Provided this is within the Lifetime
pension may be suspended until you get
Allowance at the time, there will be no
in touch. If any of your pension payments
additional tax charges – the examples on
have been suspended for more than six page 12 illustrate this.
years, they may be forfeited.
You can find out more information about the Annual Allowance and the
Lifetime Allowance – including what the current limits are – on our website
royalmailpensionplan.co.uk.
18 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 19Other useful information and common questions
The RMSPS and the RMPP each appoint Changes to your How does divorce or dissolution
an administrator which is responsible for personal circumstances of a civil partnership affect
Here is some useful information
the day-to-day activities of calculating my benefits?
and some common questions. It is very important that the Pensions
and paying pension benefits. Their
Remember – more detail can Service Centre know if your personal If you get divorced, or you have a civil
work is monitored regularly by us under
be found on the website. circumstances change. If you are still partnership dissolved, the court can take
contractual arrangements, including
employed and have not yet taken any account of your pension benefits in the
a service level agreement.
of your benefits, you should notify your RMSPS and the RMPP in your divorce/
Who looks after my benefits? Keeping you informed Line Manager or HR Service Centre of any dissolution settlement by:
changes to your personal circumstances
The assets of the RMPP (broadly, Whilst you are an employee who has not • Offsetting the value of your pension
(e.g. change of name, address or marital
contributions made by you and by the taken benefits, we will normally send you against other assets; or by
status). Your Line Manager or HR Service
Company, together with investment a ‘Benefit Illustration’ every year giving
Centre will then be able to ensure that
returns) are held in trust by the Trustee you details of the benefits you have • Sharing pension rights at the time of
your pension records are kept up to date.
to pay the benefits due to members. built up (from both the RMSPS and the divorce/dissolution through a pension
RMSPS benefits are underwritten by the RMPP), together with a summary of the If you are no longer employed by the sharing order.
Government and are paid out of general RMPP Annual Report and Accounts. Company or if any of your benefits are
taxation. Both schemes are registered by You should request information from
already in payment then you should
The Trustee’s full Annual Report and the Pensions Service Centre on the
HM Revenue & Customs (HMRC) under inform the Pensions Service Centre of any
Accounts, which includes details of the value of your pension benefits at the
Part IV of the Finance Act 2004. changes (e.g. change of name, address or
RMPP’s general progress and investment time proceedings for divorce/dissolution
marital status). Their contact details are
The Trust Deed and Rules of the RMPP information, is available to download begin. If you require more information
given on the back page. If the Pensions
may be amended by the Company from our website or on request from about how your pension benefits may
Service Centre cannot contact you or
and Trustee jointly. The RMSPS is a the Pensions Service Centre. be affected by divorce/dissolution and
post is returned from an old address, they
statutory scheme and its Rules may be what charges might be payable in
In addition, we may issue other may not be able to pay your pension.
amended by Acts or Regulations made order to comply with any Court Order
communications about matters of concerning your pension, please contact
in Parliament.
relevance or interest to members from the Pensions Service Centre.
A corporate trustee company – time to time. These may be posted,
Royal Mail Pensions Trustees Limited published via Company communication
– acts as the Trustee of the RMPP. channels and/or uploaded to
Trustee Directors are selected by the royalmailpensionplan.co.uk.
Company and members and include
an independent Chair. A similar
function in relation to the RMSPS is the
responsibility of the Secretary of State
(or those to whom they have delegated
responsibility for that scheme’s
management).
20 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 21Data Protection Complaints
What information we hold A separate privacy notice has been
and what we do with it prepared by the Manager of the RMSPS. Contact us if you are dissatisfied about the administration of the RMPP, we will try and
The Trustee holds personal data which put things right without you needing to use the formal procedure described below.
The privacy notices are updated from
you have provided to them. They need
time to time and you can see the current The RMPP has a formal internal dispute resolution procedure, which is a two-stage
this to be able to administer/pay your
version of each on the Trustee’s website procedure for dealing with complaints. Details of the dispute resolution procedure
benefits under the RMPP.
at royalmailpensionplan.co.uk. will be sent to you if you make a complaint about the RMPP or the Pensions Service
The Trustee (as a ‘data controller’ for data Centre’s administration of your benefits.
Alternatively, if you prefer to receive
protection purposes) is required to look
a hard copy of these notices, please If you have a complaint, for stage one, please contact:
after your personal data in accordance
contact the Pensions Service Centre. Head of Pensions & Severance, Pensions Service Centre, PO Box 5863,
with legal requirements. This means
that we are responsible for deciding Pond Street, Sheffield, S98 6AB
Keeping your information
what personal information needs to up-to-date If you are not satisfied with the response, you can appeal to the Trustee of the RMPP
be processed and the way in which
It is your responsibility to keep us – we will issue a Notice of Appeal decision under stage two of the procedure.
that information is processed.
up-to-date with any changes to/in
your personal information, including The Pensions Ombudsman may investigate and determine any complaint or dispute
In processing your personal data, we
your marital status, contact and bank of fact or law relating to an occupational pension scheme, such as the RMPP.
may need to pass personal information
about you, your dependants and other details. Without this information, there
members and beneficiaries, to the may be delays in paying benefits to you
RMPP’s administrators, auditors, legal or your dependants.
advisers, insurers and such third parties
Future developments
as may be necessary for the purposes
of administering the RMPP. From 25 May 2018, the General Data
Protection Regulation (GDPR) came into
Where to find out more force in all EU and EEA member states.
Full details of the types of personal Despite the UK’s intention to exit the EU,
data the Trustee holds, how we use the Government has confirmed that the
that information and who we share it GDPR will apply in the UK from that date. You will find contact details
with are set out in our privacy notice. It has passed the Data Protection Act for The Pensions Ombudsman
The privacy notice also sets out your 2018 which incorporates the GDPR into under the ‘Other useful
rights in connection with the personal UK Law and replaces the Data Protection contacts’ section towards the
data held about you by the Trustee, and Act 1998. end of this guide.
who to contact if you want to exercise
those rights, make a complaint, or
generally have any questions.
22 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 23Glossary of terms
Age60 benefits/Age60 pension Company
Benefits in respect of pensionable Royal Mail Group or any of its subsidiary
service/reckonable service prior companies which are participating
to 1 April 2010, where the applicable in the RMPP.
Normal Retiring Age is 60.
CSDB pensionable pay
Age65 benefits/Age65 pension This is used to calculate benefits related
Benefits in respect of pensionable to service on and after 1 April 2008.
service/reckonable service on and from It is equal to:
1 April 2010, where the applicable Normal
Retiring Age is 65. • Your basic pay at 1 April 2014 and
The State Pension Additional Voluntary
subsequent increases that the
Company deems to be pensionable,
Contributions (AVCs)
You’ll be able to claim the new State • Plus (where appropriate) London
Extra contributions you can pay to
Pension (which was introduced on weighting, assigned allowances,
increase your RMPP benefits. You may
6 April 2016) if you are a man born on contributory allowances or other
pay up to a total of 100% of your taxable
or after 6 April 1951 or a woman born payments that the Company has
pay to the RMPP if you wish (including
on or after 6 April 1953, and provided stated to be pensionable in your
your normal contributions). If you wish
that you have paid sufficient National terms and conditions,
to pay significant AVCs, they may have
Insurance contributions. You can find to be restricted to make sure that any • Minus, for members of Section C,
out your State Pension age, and an normal regular deductions can be the indexed Lower Earnings Deduction
estimate of the amount that you will made from your earnings. Details of applying. (For a full-time employee
receive at gov.uk. the AVC arrangements are included this is £3,328 increased each April
in the Guide to Additional Voluntary with effect from 1 April 2014 by the
Contributions which can be downloaded increase in the Retail Prices Index for
from royalmailpensionplan.co.uk the 12 months up to the preceding
or requested from the Pensions September. Each annual increase is
Service Centre. limited to 5%.)
Civil partner
One of a same sex couple with rights
conferred via registration in accordance
with the Civil Partnership Act 2004.
24 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 25Glossary of terms cont...
Ill health he has delegated responsibility for The maximum combined pension in any three consecutive tax years in the
management of the RMSPS. supplement permitted is a pension last 10 years before you leave service, take
Serious physical or mental ill health (not
which would be equal to that calculated your benefits or die. Where a calculation
simply a decline in energy or ability) such Minimum Pension Age (MPA) using the maximum of 45 years, year or tax year other than that which
that in the opinion of the Company you
The earliest age at which you are able pensionable service. ends on your last day of reckonable
are permanently incapable of; carrying
to begin receiving your pension benefits service is used, pensionable pay will
out your current duties, carrying out Pensionable pay
(except on ill health retirement where be increased to take account of the
such other duties as the Company might
there is no minimum age). The MPA is 55; This is used to calculate the part of intervening period.
reasonably expect you to perform for
prior to 6 April 2010 it was 50). Section C members’ pension benefits
it, and engaging in employment with
that relate to service before 1 April If you work part time, the pensionable
any other employer of a type which in Normal Retiring Age (NRA) 2008. It is your basic pay at 1 April 2014 pay used to calculate your benefits for
the opinion of the Company would be
In relation to pensionable service/ and subsequent increases that the pension purposes but not for lump sum
reasonable and appropriate for you.
reckonable service before 1 April 2010, Company deems to be pensionable, death in service purposes will first be
However, if you became entitled to this is your 60th birthday. In relation plus any pensionable allowance, minus adjusted to its full time equivalent.
preserved benefits and you were in to pensionable service/reckonable the Indexed Lower Earnings Deduction
When calculating the lump sum
pensionable service on 31 March 2000, service after that date this is your applying (which for a full-time employee
death in service benefit, pensionable
ill health means; for a Section A/B 65th birthday. is £3,328 increased each April with effect
pay is not reduced by the Lower
member physical or mental disablement from 1 April 2014 by the increase in the
Pension supplement Earnings Deduction.
which permanently prevents you from Retail Prices Index for the 12 months
providing regular and efficient service An additional amount of pension up to the preceding September). If you Pensionable salary
in your post, for a Section C member calculated as follows: work part-time, the pensionable pay in
This is used to calculate the part of
physical or mental incapacity that respect of a calculation year – i.e. any year
• F
or your pensionable service up to Section A/B members’ pension benefits
prevents you from following your normal within the last three, providing it ends
and including 31 March 2008, 1/60th of that relate to service before 1 April 2008
occupation or seriously impairs your on the last day of reckonable service
the lower earnings deduction over the and the lump sum death benefit paid
earning capacity. or a date which is 91 days or up to eight
period during which final pensionable to your dependants if you die whilst still
multiples of 91 days) before the last day
pay is calculated (with an additional working for the Company. It is your basic
The Company’s decision as to whether of reckonable service – used for pension
pro-rata amount for part years) pay and London allowance at 1 April
you are in ill health will be final. purposes but not for lump sum death
2014 and subsequent increases that the
• F
or your pensionable service on in service purposes will first be adjusted
Confirmation will be required from a Company deems to be pensionable, plus
and after 1 April 2008, the sum of the to its full-time equivalent.
registered medical practitioner that you any pensionable allowance, in whichever
are (and will continue to be) incapable supplement blocks that have built up of the last three years of reckonable
When calculating pension benefits and
of carrying on your occupation because for your pensionable service between service gives the highest amount. It
lump sum death in service benefits,
of physical or mental impairment. In 1 April 2008 and 31 March 2018. The is adjusted to the full-time equivalent
we use your highest pensionable pay
addition, if you are under 55 when you supplement block for each Plan Year during periods of part-time employment
for any calculation year – i.e. any year
apply for a pension on ill health grounds, is calculated at the renewal date as unless otherwise stated. Where it would
within the last three, providing it ends
you must have ceased carrying on 1/60th of the lower earnings deduction give you a higher amount, your average
on the last day of reckonable service
your occupation. (reduced appropriately for any period annual pensionable salary plus other
or a date which is 91 days or up to eight
that you worked part time or if you had pensionable payments over the best
multiples of 91 days) before the last day
Manager any periods of non-reckonable service three consecutive tax years in the last
of reckonable service – or, if greater the
The Secretary of State or those to whom during the Plan Year concerned). ten years will be used.
highest average of your pensionable pay
26 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 27Glossary of terms cont... Contact information
Pensionable service For Section C members this service
For Section C members, this is the period
as an RMSPS and/or RMPP member,
service transferred in from other pension
Pensions Service Centre
of your employment that is taken into
schemes and additional service bought For further information on the RMSPS or the RMPP, you can contact the Pensions Service
account when working out your pension
by Additional Voluntary Contributions Centre using the details below:
benefits. It is the same as reckonable
(AVCs) or additional Company
service unless it has been scaled down
contributions. It does not include any
by reference to your hours because 0114 241 4545 or Postline 5456 4545
periods during which you opted out
you worked part time. The maximum
of the RMPP.
pensionable service used to calculate
pre 1 April 2018 benefits is 45 years.
pensions.helpline@royalmail.com
Renewal date
Plan Year 31 March each year.
royalmailpensionplan.co.uk
1 April to 31 March. RMPP
Preserved benefits Royal Mail Pension Plan. Pensions Service Centre, PO Box 5863,
If you leave service (or opt out of RMSPS Pond Street, Sheffield S98 6AB
membership) before Normal Retiring
Royal Mail Statutory Pension Scheme.
Age, the benefits that you have built
up will be preserved (otherwise referred Trustee
to as ‘deferred’) and will normally be All booklets are also available to download from the website
Royal Mail Pensions Trustees Limited royalmailpensionplan.co.uk.
paid from Normal Retiring Age.
– the organisation that manages the
RMPP in accordance with its Trust Deed Please quote your full name, date of birth and either your National Insurance
Reckonable service
and Rules. number or membership number when you write or call.
For Section A/B members this is the
service used to work out your pension ‘We’ ‘Us’ ‘Our’
benefits. It includes service as an
The Manager of the RMSPS and/or the
RMSPS and/or RMPP member, service
Trustee of the RMPP.
transferred in from other pension
schemes and additional service bought
by Additional Voluntary Contributions
(AVCs) or additional Company
contributions. It does not include any
periods during which you opted out of
the RMPP. The maximum reckonable
£ £ £ £ £ £ £ £ £
service used to calculate pre 1 April 2018
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28 | royalmailpensionplan.co.uk Member Guide 2018 Member Guide 2018 royalmailpensionplan.co.uk | 29
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