Pension News - Spring 2020

[stephen500]

Hi Robert,

Can you please say how you got to the figure you £7925 figure ad is that since the scheme started?

Also and it might be a stupid question this is just the lump sum payable alongside your NRA 60/65 schemes and not anything to do with the other future pension scheme you will get ? I Probably got that completely wrong....

Many Thanks

My Cash Balance(DBCBS) pot was worth £3,830 as at 31st March 2019 as featured on my annual illustration. That's seen a 3.7% increase making it £3,971.

My weekly 6% contributions during the 2019/20 tax year were £23.27, add on RM's 13.6% and I get £76.04 x 52 = £3,954.

Add the two amounts together and I get £7,925.

The annual increases are discretionary and will vary from year to year, some years there might not be one! But they are added 12 months afterwards, so the increase we've just had only applies to the first year. Next years increase(if there is one) will apply to years 1 & 2.

The DBCBS, for sections A, B or C members is there to fund the tax free lump sum with existing benefits. It is nothing to do with the proposed new CDC scheme!

Robert, as you know I am planning to take the lot in Dec. As I will be part way through year 3 of the Cash bal scheme, do you think I will get (if there is one) any up ratings after I am in pension for year 2 and part year 3. Thanks.

[Thailand1]

Not sure if same rules apply if you cash it in before you reach 60.
As I said before I can’t confirm all the above.....but hope it helps

My understanding is that if you're in sections A, B or C you can't separately cash in your DBCBS pot – you have take it with your other benefits. But you can transfer all of your RMPP(post 2012)benefits, including the DBCBS as one pot.

If you're in section F, then your DBCBS pot can be transferred out to a DC scheme for annuity purchase or drawdown.

There seems to be a little misunderstanding here.....Yes the cash balance scheme has to be taken with the other benefits.....but what I was trying to say is if you take your NRA 60 benefits at 55 you would lose 25% as we all agree......but if you took your cash balance scheme along side it you may not incur an Early redemption as it is regarded,at present, as a sort of AVC scheme due to being in a transitional pension scheme until the CDC kicks in.


Again not confirmed but worth finding out.

[Hawkey99]

So the 6% that we make is this simply 6% of basic pay and nothing else.

Or does it include anything else such as allowances.?

Thanks

[RobertT]

So the 6% that we make is this simply 6% of basic pay and nothing else.
Or does it include anything else such as allowances.?
Thanks

It's 6% of pensionable pay!
Some people will have allowances that are pensionable, while some will be in section C or F and will see their pensionable pay reduce because of the Lower Earnings Deduction.

If you have any payslips from the 2018/19 tax year, the contributions should tally with the pensionable pay quoted on your last annual pension illustration.

[stephen500]

Some of you may be interested to know that the latest version of Pension News is out. It's available to view online and I assume we'll be getting a paper copy aswell. https://www.royalmailpensionplan.co.uk/ ... _web_0.pdf" onclick="window.open(this.href);return false;

The important points:

Cash Balance(DBCBS) benefits up to 31st March 2019 have been increased by 3.7%.
Funding update – there's just about enough in the pot to pay our pensions.
We're getting new look annual illustrations from both the RMSPS and RMPP.
The information they provide us will be clearer, starting with option letters when taking benefits.

So the increase would have made little change in my reduction figures of around 1.6% per year as the bonus for one year of my DBCBS (£5750) was £212.

[freespeech]

Some of you may be interested to know that the latest version of Pension News is out. It's available to view online and I assume we'll be getting a paper copy aswell. https://www.royalmailpensionplan.co.uk/ ... _web_0.pdf" onclick="window.open(this.href);return false;

The important points:

Cash Balance(DBCBS) benefits up to 31st March 2019 have been increased by 3.7%.
Funding update – there's just about enough in the pot to pay our pensions.
We're getting new look annual illustrations from both the RMSPS and RMPP.
The information they provide us will be clearer, starting with option letters when taking benefits.

I'm not holding my breath for a breakdown of NRA60 and 65 from each then.......

[RobertT]

Some of you may be interested to know that the latest version of Pension News is out. It's available to view online and I assume we'll be getting a paper copy aswell. https://www.royalmailpensionplan.co.uk/ ... _web_0.pdf" onclick="window.open(this.href);return false;

The important points:

Cash Balance(DBCBS) benefits up to 31st March 2019 have been increased by 3.7%.
Funding update – there's just about enough in the pot to pay our pensions.
We're getting new look annual illustrations from both the RMSPS and RMPP.
The information they provide us will be clearer, starting with option letters when taking benefits.

I'm not holding my breath for a breakdown of NRA60 and 65 from each then.......

Going by the diagram in the pdf I linked to, there is a chance the statements might show NRA60 & NRA65 benefits, although whether they actually do remains to be seen.

The one from the RMSPS will be the important one, as it needs to show benefits up to 2010(NRA60) and benefits between 2010-2012 separately, and not just total RMSPS benefits up to 2012.

The 2010-2012 figures can then be added to the 2012-2018 figures on the RMPP illustration to get NRA65 benefits.

We'll just have to wait and see whether that happens or not.