Choosing between RMDCP and the Cash Balance Scheme
If you’ve been a member of the RMDCP for five years – and have saved 4%, 5%, or 6% for the last four – you have a choice.
You can carry on saving into the RMDCP or you can start saving into the Cash Balance Scheme instead. The choice you make could have a big effect on how much money you have in your pension pot when you retire.
You get more from Royal Mail in the Cash Balance Scheme
In the Cash Balance Scheme, you save 6% of pensionable pay and Royal Mail add 13.6%.
In the RMDCP, if you save 6%, Royal Mail add 10%.
The Cash Balance Scheme is a Defined Benefit scheme. As long as you don’t take the money in your pot until you’re 65, it guarantees that you’ll get all the money that you and Royal Mail have paid into it – no matter what happens to investments. Every year, you might get a bonus added to your pot too, which you’d also be guaranteed to get.
Defined Contribution schemes, like the RMDCP, don’t give you these guarantees – the money you get depends on how your investments perform.