NRA 65......Be careful

[RobertT]

I have received my NRA65 quote from both RMPP and RMSPP.

Neither one mentions a supplement which I guess they wouldn't as Im not quite leaving yet.

I assume this will be on the next quote which gives me the options as described by Stephen.....

Are you certain the supplement is included even if your not yet leaving Royal Mail Robert ?

Many thanks as always.......

The supplement forms part of your section C benefits, so I don't really see why it wouldn't be included in the pot value calculations. The plan guide says it is.
It's good for you if it is included anyway, as your tax free lump sum would be higher!

I'm not 100% sure of the exact procedure as I have no personal experience. But as far as I'm aware they first give you a 'soft quote' for basic pension and then only include the supplement, DBCBS and AVC's once you've decided you actually want to take your benefits.
That seems to be the experience of others on this forum, but I'm happy to be corrected.

Whether they ask you if you're leaving and then include the supplement if you are, I don't know. But as you've already taken your NRA60, you presumably know the procedure already?

[Hawkey99]

Hi Robert,

They didn't include the supplement on my NRA 60 pension thats why I thought it would only be included if your leaving.

Anybody got their NRA 65 recently and can confirm if it included the supplement for calculating your 25% tax free amount ?

[RobertT]

Hi Robert,

They didn't include the supplement on my NRA 60 pension thats why I thought it would only be included if your leaving.

Anybody got their NRA 65 recently and can confirm if it included the supplement for calculating your 25% tax free amount ?

They obviously haven't been paying your supplement if you're still with RM. It's only paid if you leave.

So when you get a quote, do they ask you if you're leaving? Or do you have to tell them?
What was the procedure when you took your NRA60? I assume it'll be the same with your NRA65?

The plan guide says the supplement is included in the calculation for working out the pot value and therefore the max lump sum. So I think it's fair to say it is.

[Hawkey99]

The procedure when I took my NRA 60 was they just gave me the figures but nowhere did it mention or show any pension supplement had been added or included...

I guess somehow they must have included it.....

[RobertT]

It obviously won't be included in the annual pension, because you're still an employee of RM. But you could probably work it out from your NRA60 pot value figures.

Take your yearly gross NRA60 pension payment and multiply by 20, then add on the lump sum.
If the lump sum equals more than 25%, then the supplement was probably factored in.

You should also be able to work out what the NRA60 supplement is worth(had you left RM), from the figures you come up with.

[Hawkey99]

I have got my RMSPS statement of benefits.

It clearly states there is no Pension supplement and when I times my pension by 20 then add my lump sum and then take awaye 25% it comes to exactly the lump sum I have received.....

So either my RMSPS NRA 60 was paid incorrectly or your pension supplement is not included unless you are leaving at the same time.

[RobertT]

There was someone on here a while ago who had to chase Capita to have their supplement paid, apparently they knew nothing about it.

My supplement isn't included in my RMSPS figures when I log into the online portal. I'll have to wait and see whether it's on my annual illustration.

So it is possible your NRA60 was calculated incorrectly, this is Capita we're dealing with after all!

[Hawkey99]

Shooting Blind....

What is truly crazy is that I am committing to taking my NRA 65 with only half the information. i.e. No figures of AVC money or DBCBS.

Surely when the full and final information arrives you shouldn't be forced to take it if it doesn't work out the way you want.

Also on Stephen pension thread he had 3 Options with his RMSPS and I only have 2. I assume that is because he is section B and Im in C.

I also still don't know percentage wise how much of my DBCBS will go to my RMPP pot and which will go to my RMSPS pot.

I believe my AVC can only be used with my RMPP pension.....So confusing.....

[RobertT]

I agree with you that the whole RM pension situation is a total shambles – all the info on the supplement, DBCBS and AVC's should be included on all quotes, illustrations, etc, with clear indication of which is NRA60 and which is NRA65.

I believe your comment about section B members having 3 options to section C's 2 to be correct, as B get a lump sum as standard.

The vast majority of your DBCBS will be used to fund the tax free lump sum with your RMPP(2012-2018) benefits. With a relatively small amount being used for the remainder of your NRA65 benefits(2010-2012) via the RMSPS, as the RMPP are responsible for paying some inflationary increases on those benefits and a DBCBS lump sum will be assigned to those increases too.

AVC's can be used with all of your pension – both RMSPS and RMPP, that has always been the case.

Any excess DBCBS will be paid out as a UFPLS.
That will also happen with excess AVC's unless you chose to transfer the whole AVC fund out instead.
Bonusplan and Flexiplan can be treated separately, with one being used to fund the tax free cash and one transferred.

[Hawkey99]

Thanks Robert,

Not expecting to receive any payments of any kind until early next year.

And my final cock up is having to much AVC which if Im allowed I will be transferring all of my Flexiplan to another provider and using my Bonus plan to add to my DBCBS lump sum.....

[RobertT]

I would say, make sure you do your maths with regards to the tax situation of transferring out compared to taking a taxable lump sum via RM.

If you transfer out only 25% is guaranteed to be tax free, with the remainder being classed as income via an annuity or drawdown.
While leaving your Flexiplan where it is will increase the value of your RM pension total value, and therefore it's possible you may pay less tax.

Obviously it will vary depending on exact numbers and circumstances.

[Hawkey99]

I would say, make sure you do your maths with regards to the tax situation of transferring out compared to taking a taxable lump sum via RM.

If you transfer out only 25% is guaranteed to be tax free, with the remainder being classed as income via an annuity or drawdown.
While leaving your Flexiplan where it is will increase the value of your RM pension total value, and therefore it's possible you may pay less tax.

Obviously it will vary depending on exact numbers and circumstances.

I am taking my NRA65 having already taken my NRA 60. How would I be able to leave my Flexiplan where it is ?

I assume you mean due to money paid into the new scheme when it arrives ?.

[RobertT]

By leaving it where it is, I meant to take with your NRA65 benefits rather than transferring it.

Although if you do transfer, that would have to take place independently of taking your NRA65 benefits, which could be either before or afterwards. There is no compulsion as far as I'm aware, to remove all of your AVC cash by the time you take your NRA65 benefits and you could theoretically leave your Flexiplan and/or Bonusplan with RM/SW until age 75 if you want to!
Whether that's a good thing to do will depend on circumstances.

I'm younger than you and haven't taken any of my RM benefits yet, but I expect to have an amount of excess AVC cash, like you.
In my case I will pay less in tax by taking my excess with my NRA65 benefits rather than transferring to a personal pension, hence why I suggested you look at the maths of both options.

The new CDC scheme will be completely separate and have no connection with any of the current RM pension arrangements.