CONTACT : Tel: 0345 112 0025
11 May 2020

A Covid-19 (coronavirus) update

We understand you may be worried about the Covid-19 outbreak and have provided information to help you understand how it may affect your pension from the Amey OS Pension Scheme.

Can the Scheme’s administrator, RPMI, continue to provide the services at this time?

Yes, administration continues to be business as usual and the Trustees are operating and closely monitoring investments.

Due to the Coronavirus situation, RPMI is prioritising urgent queries. Therefore, please be aware it may take longer than usual to respond to any queries that you send.

RPMI has very detailed plans in place to make sure it can continue to provide services as well as look after its people. It is following all advice from the Government as well as central authorities and has put its plans into action.

What actions has RPMI taken to address the current situation?

As well as closely monitoring and following Government and authority advice, RPMI is prioritising urgent queries and key processes as this time. This includes paying members’ monthly pensions, setting up new retirements, and settlement of death benefits. The majority of the administration team have been enabled to work from home, with a very small team being office based to deal with essential tasks that allow RPMI to continue to provide a reliable services for members. 

How will Covid-19 affect my pension?

Everyone’s worried about Covid 19. As it’s affected stock markets, it is completely understandable that you should think about how it might affect your pension.

In the middle of March stock prices fell. By the end of April, prices had gone up again, but overall the average price of shares was lower than it was at the start of March. It’s normal for shares to go up and down in value, but these recent changes were bigger than we’d have expected under normal circumstances.

So, what does this mean for your pension? Well, it depends on the type of pension you have, whether you’re already getting an income from it, and if not, how long it is until you plan to retire.

I am in a Defined Benefit (DB) Pension scheme (where the amount of pension I get is based on how much I earn and the number of years I’ve worked)

Whether you’re getting an income from this type of pension right now or will be in the future, the amount you get isn’t affected by stock markets and share prices.

I am in a Defined Benefit (DB) Pension scheme – but I also make Additional Voluntary Contributions (AVCs)

Whether you’re already getting an income from your DB pension, or will be in the future, the amount you get isn’t affected by stock markets and share prices.

It’s unlikely that all your AVCs are invested in stocks and shares.

If you’re building up a pot of money alongside your pension by making AVCs, the value of this pot might be affected by changes in the stock market. However, most AVC pots are invested in a range of different types of investment. So, while you might be investing in stocks and shares, you might also be investing in government bonds and property. If this is the case, it will have reduced the effect that changes in the stock market have on the value of your pot. This spreading of investments is often done automatically when you set up AVCs.

If you’re close to retiring, the effect of stock market changes on your AVC pot may have been reduced

Lots of AVCs also use something called lifestyling. Lifestyling changes the way your AVC pot is invested as you get closer to retiring – instead of the emphasis being on making your pot grow, the emphasis becomes protecting growth you’ve already had. To achieve this, about 5 to 10 years before the date you’re expected to retire, it starts moving your investments out of stocks and shares and into cash and bonds. If your AVC pot is invested with lifestyling and you are close to retiring, changes in the stock market will have had less effect on the value of your pot.

If you’re at least 5 years from retiring, there could be time for the value of your AVC pot to recover in value

In the past, sudden falls in stock markets, like those we’ve seen recently, have been followed by periods of growth, when markets recover. So, there’s a good chance that its value will increase before you need it. If you have 5 years, there’s a very good chance that your pot will recover and even grow to more than you had before. If you’re more than 5 years away from retiring, those chances get even better.

There’s a risk referring to ‘now’ as you don’t know when members will be looking at the website and what could have happened to share prices at that point in time so I’ve reworded slightly.