AVC's - PSE

[11aaa222]

Hi, maybe Robertt is best placed to answer this.

I am looking at maximizing my contributions into the avc scheme, however I do not wish to drop out of PSE and wish to remain under this threshold.

I am wondering if anyone can provide advice and guidance.

I am currently a full time 38 hours opg on the late shift being and have been for the last few years. I am getting no other allowances apart from late shift allowance and the processing supplement which is about £9 a week.

Current deductions are the contribution into the section C pension plan and the share plan which is £100 a month, as well as the avc bonus plan £2.88 a week, also purchasing six weeks holiday and this deduction is about £7 a week.

Can anyone please guide and help me what is the maximum I can pay into the flexiplan AVC a week and still be in PSE to make the NI savings. I want the maximum contribution and would be comfortable with this.

I have been in touch with the pensions team and they are not very helpful as they say "We cannot provide you with exact amounts as we are not permitted to give Financial Advice as we are not legally permitted to do this"

Many thanks in anticipation!

[regalia25]

When I have contacted the pension people about PSE I too have also found them very vague !
If it helps I currently pay 6% pension plus 20% AVCs and this amounts to around £117 per week. This keeps me inside the PSE limits and is based on full-time pay with no other PSE eligible deductions.
I'm sure others will chip in with any advance on that figure !

[RobertT]

To work out your maximum AVC payments you need to keep your basic pay above the level of the minimum wage. So a simple bit of maths is required:

Basic wage(not including allowances) – national minimum wage x hours worked = max contributions to benefit from PSE

Or in money terms for a full timer on 38 hours, that would be:

12.05– 8.91 x 38 = 119.32

For someone who's already gone onto the 37 hour week, it would be 128.02

I'm not sure if POAL benefits from PSE(perhaps somebody else does?), but the P&M share scheme does.

Personally I would advise a bit less than the maximum to be on the safe side. Therefore it sounds as if your ability to pay substantially more into Flexiplan and benefit from PSE is fairly limited unless you choose to reduce your P&M payments.

[11aaa222]

Thanks for you reply guys!!

No way am I going to give up on my p&m plan, I have done and doing very well out of it!

Any idea on the POAL anyone???

So I can work it out. Just for clarity shift allowance and processing supplement do not count as part of basic wage even though it is guaranteed every week??? strange can someone please clarify???

[RobertT]

I think I misread your original post slightly as some payments were in weeks and the P&M is in months.

£100 P&M per month works out as £23 per week, which I think is the maximum you can pay in. Therefore ignoring POAL, you should be able to put about £90 into Flexiplan per week and stay within PSE.

I don't really know why only basic pay is used other than it's in the rules and mentioned in the PSE booklet. Available here: https://www.myroyalmail.com/node/6791

[Streets4228]

I think basic wage is used because if you are off sick for longer than 8 weeks you lose all your allowances, therefore dropping below PSE bottom line.