Breaking - RMPP RMSPS - update on tax- 18 1st June application for winter payment 2020, diary time line

[stephen500]

The RMSPS relates to benefits accrued up to 31st March 2012 and is paid by the government/taxpayer, so that includes:

Final salary pension up to 31st March 2008
CSDB from 1st April 2008 to 31st March 2012.

The RMPP relates to benefits accrued from 1st April 2012, including the DBCBS.

But your benefits will be paid out on a NRA60 & NRA65 basis:

NRA60 = all benefits accrued up to 31st March 2010, which includes all final salary pension and the first 2 years of CSDB.
NRA65 = all benefits accrued from 1st April 2010 to 31st March 2018, plus the DBCBS.

Hence your RMSPS figures are higher than you thought and your RMPP figures will be lower.

But, Robert, I don't understand if the CSDB started in 2008 and it includes 2 years? why does it goe up to 2012, which is 4 years?

[RobertT]

You have received a quote for what the RMSPS are going to pay you. That's all benefits accrued up to 2012. Therefore that includes your final salary benefits and the first 4 years of CSDB benefits.

The quote you get from the RMPP will include benefits accrued from 2012 to 2018 and the DBCBS.

Sorry but I don't know how else to say it!

[stephen500]

You have received a quote for what the RMSPS are going to pay you. That's all benefits accrued up to 2012. Therefore that includes your final salary benefits and the first 4 years of CSDB benefits.

The quote you get from the RMPP will include benefits accrued from 2012 to 2018 and the DBCBS.

Sorry but I don't know how else to say it!

yes but all along we have been told it includes 2 years of CSDB or 20% of it. At least it looks like I can expect at least what I thought

[RobertT]

The NRA60 includes 2 years of CSDB.

[RobertT]

To put it another way:

This quote includes all benefits accrued up to 2012, therefore it will include all FS and 4 years of CSDB.

As NRA60 benefits are those accrued up to 2010, the quote will also include the 2 years from 2010-2012 which come under NRA65 benefits, and I assume those 2 years have been actuarially reduced due to early payment.

[Jefferson Starfish]

I know RM pensions are quite hard to understand but this is all fairly basic stuff surely?

[nataddick]

Took my NRA 60 when it fell due and taking NRA 65 quite soon so I am able to confirm that Robert T is spot on with his explanations. I have had both NRA 65 benefit options quotes and only had a problem with RMPP pack which first time around failed to include any option to deal with my excess AVC’s. A phone call to PSC ‘baffled’ first line support but was referred to second line support and a revised benefit options pack was received within 48 hours. All forms completed an sent back - so now just waiting !

[NorthernBoy]

Thanks for sharing this info. Is this pension plan b or c?

I see that the conversion rate of pension to lump sum is 18.4. This used to be around 20 or over, I wonder if there is a trend downward in the conversion rate? If any other members have any other recent figures then it would be useful to compare.

[stephen500]

What is confusing is the illustration says if you have taken NRA60, you need to deduct 2 blocks from nra65 not 4? Never mind. My estimate for my NRA65 RMPP is £1667 pension and £4992 min lump sum + £4576 DBCBS tax free = £9568 tax free max LS + £6406 excess DBCBS minus £1281 tax at 20% =£14693 total RMPP lump sums inc DBCBS option 2 B. Add that to quotes received today and that gives me lump sums of £81975 which is more than the £74000 I originally estimated. I have taken off RMPP pension 40% for loss of 4 years to move to nra60 and 26% for 5 years 2 months early payment. Nra65 RMPP is an estimate. As for some one saying pensions are pretty basic stuff, that might be your opinion, but it is not mine. Any how I only need another £1000 from RMPP pension and £6000 lump sum to hit my original target, so I will get at least that , so I am happy. I will keep you posted. Just want it in November.

[stephen500]

Thanks for sharing this info. Is this pension plan b or c?

I see that the conversion rate of pension to lump sum is 18.4. This used to be around 20 or over, I wonder if there is a trend downward in the conversion rate? If any other members have any other recent figures then it would be useful to compare.

Section B

[RobertT]

What is confusing is the illustration says if you have taken NRA60, you need to deduct 2 blocks from nra65 not 4? Never mind.

Your annual illustration is set out as final salary(up to 2008) and CSDB(2008-2018).
The estimate you've received from the RMSPS includes all benefits accrued up to 2012.
The estimate from the RMPP is all benefits accrued from 2012 to 2018, plus DBCBS.

But your pension is paid out as:
NRA60, which is all benefits up to 2010; and
NRA65, which is all benefits from 2010 to 2018, plus DBCBS.

Therefore your RMSPS quote includes all of your NRA60 benefits plus the first 2 years of your NRA65. While your RMPP quote is for the other 6 years of your NRA65, plus DBCBS.

[RobertT]

Thanks for sharing this info. Is this pension plan b or c?

I see that the conversion rate of pension to lump sum is 18.4. This used to be around 20 or over, I wonder if there is a trend downward in the conversion rate? If any other members have any other recent figures then it would be useful to compare.

If you're in section C and wanting to commute pension to lump sum, then you want the rate to be as high as possible.
So a rate of 1:22 for example, would give you a lump sum of £22 for every £1 of annual pension you give up. That would be better than 1:20.

But if you're in section B you can commute the lump sum to more pension, therefore you'll want it to be as low as possible.
So it's better to give up £20 lump sum for an extra £1 pension, than £22.

[Steve_claret]

I expected my max lump sum NRA 60 and NRA65 (RMSPS only) to be £58921
Whereas it is £67312.06 (an extra £8391 more than I expected) and a pension of £1200 more than I expected.

Hi Stephen, glad things seem to be progressing nicely. Out of curiosity why do you think you were so far out with your original RMSPS calculation?
I know there is the additional 2 years for the NRA65 which you didn't factor in but the amounts are too far apart for this to be the only reason.
Out of interest when did you start paying into the pension scheme as you are Section B like me? I started in 1979 and have just taken my NRA60 at full term and got a PCLS of just under £62K which is pretty much what I was expecting after having worked it out using our last annual illustration to March 2019 and adding a bit on for inflation.

[NorthernBoy]

Thanks for sharing this info. Is this pension plan b or c?

I see that the conversion rate of pension to lump sum is 18.4. This used to be around 20 or over, I wonder if there is a trend downward in the conversion rate? If any other members have any other recent figures then it would be useful to compare.

If you're in section C and wanting to commute pension to lump sum, then you want the rate to be as high as possible.
So a rate of 1:22 for example, would give you a lump sum of £22 for every £1 of annual pension you give up. That would be better than 1:20.

But if you're in section B you can commute the lump sum to more pension, therefore you'll want it to be as low as possible.
So it's better to give up £20 lump sum for an extra £1 pension, than £22.

Thanks for this Robert.

Do you think they will ever allow section c members to use their avcs to buy a higher annual NRA 60 pension?

[RobertT]

Thanks for this Robert.

Do you think they will ever allow section c members to use their avcs to buy a higher annual NRA 60 pension?

There used to be an added years AVC which bought extra final salary service, but that was stopped for new applicants in 2008 and I think existing contributors in 2018.

I seem to remember some years ago(20 years+) there was a proposal to enable us to use Bonusplan and/or Flexiplan cash to buy more service, but it didn't actually happen. Although I could also be remembering incorrectly?

So considering.....

The RMPP is closed to future accrual and will close completely once the CDC scheme starts.
The added years AVC option stopped some time ago.
i think it was previously considered and discounted when the RMPP was still fully open.
The scheme/s liabilities would probably increase.

….then I would say there is no possibility whatsoever.

EDIT: According to the RMPP website, existing contributors(pre 2008) to Addplan can currently still pay into it: https://www.royalmailpensionplan.co.uk/ ... n-benefits" onclick="window.open(this.href);return false;