Transfer AVC & DBCBS

[Hawkey99]

On one of my many sheets it says I can transfer out to another provider my AVC funds but not my Defined Benefit Cash Balance amount.

I know the AVC bit is correct but what about the DBCBS Part?

Has anyone come across this and is it correct ?

Many thanks

[RobertT]

Going by the RMPP website it is possible for section A, B & C members to transfer out 2012+ benefits which would include the DBCBS as well as the pension.
I don't think it says you can transfer out the DBCBS separately!

Considering the DBCBS is designed to fund the lump sum particularly with NRA65 benefits, and will probably be tax free for most section C members at least, then taking it with your NRA65 is probably the best option for most.

As soon as you transfer out, only 25% of your DBCBS(if you're allowed to transfer) and AVC's is guaranteed to be tax free with the remainder being classed as income with normal PAYE rules applying.

Personally I'm in section C and plan to transfer out my Bonusplan to my personal pension at some point but leave my Flexiplan to fund the tax free cash at 60 and 65. I've looked at transferring that too as it'll be more than 25% pot value, but that won't be as tax efficient as taking it with my main benefits.

However, as always with RM pensions, there is an anomaly!
If you read the info for section F members(that's people who've been in the RMDCP for at least 4 years and have chosen to join the DBCBS instead) they can transfer out their DBCBS funds to buy an annuity or drawdown.

So perhaps a little clarification from RMPP might be needed?

[Hawkey99]

Thanks as always Robert,

My concern is Im well over the 25% tax free amount with AVC and DBCBS amounts.

So my plan was to take my NRA 65 with the maximum lump sum and transfer out the AVC and DBCBS to another provider. However as I said, on the paperwork its say I can do this with the AVC but not the DBCBS.

So I guess its transfer out the AVC out to another provider and get the maximum tax free lump sum from my NRA 65 and DBCBS....

[RobertT]

But if you take the AVC's with your NRA65 they will be calculated as part of your overall pot and therefore less tax may be payable?

I believe that any excess AVC's paid out as taxable cash are treated as a UFPLS, meaning the first 25% of that excess is also tax free.

Just because you're likely to pay tax on your AVC's by taking them with your NRA65, doesn't necessarily mean you'll pay less tax by transferring them.

[tonythetiiger]

I do not have any avc's but have just received my figures, the option to buy an annuity or transfer to flexible drawdown scheme with the cash balance is an option. I am considering this rather than using cash balance to fund my tax free lump sum. I have already left RM