Transferring DB pension to another DB pension? Is that even possible? Please help me understand this!

[coldjim]

Hi,I am trying to help my mother-in-law understand her pension, and I'm completely lost as to what has happened (I am usually very good with these things)

Basically she worked at Co-op (at the time called CWS) for 6 years from 1980 to 1986, and by the looks of their scheme from their website, it was a DB scheme. She then moved to Royal Mail for 4/5 years from 1986 to 1991. Their scheme was called RMSPS, and again was a DB scheme.

However when she left the CWS, the HR department asked if she would like to "leave her pension with them, or take it/transfer it to Royal Mail when she leaves as they have a better scheme"....

She opted to take it with her/transfer it in. Which at this point, i don't understand. Is that even possible? Surely you can't transfer DB to DB as it comes out the companies individual pockets, right? Unless I'm misunderstanding something.

She has just received her letter from the RMSPS scheme, and there is something on there that states £X from a top up from a 'Transfer in Pension Supplement' until 2031, I'm wondering if this is that but it also a very low amount compared to just her 4 years with Royal Mail.

She is turning 60 year this so she is now trying to work everything out.

Any help would be appreciated.

[NorthernBoy]

Yes many people who changed jobs would have transferred pensions between different companies, it sounds like Rm was the better scheme so. she did the right thing.

With regard the extra payment until 2031 probably connected to the transfer terms not sure.

[FAB]

The transferred pension from CWS to RMSPS is not shown separately but will be part of her final salary RMSPS amount. The transfer in supplement is the bit of extra pension you get until you reach State Pension age. At that point it along with the rest of the supplement stops.

[renrag40]

The transferred pension from CWS to RMSPS is not shown separately but will be part of her final salary RMSPS amount. The transfer in supplement is the bit of extra pension you get until you reach State Pension age. At that point it along with the rest of the supplement stops.

If she joined Royal Mail in 1986 and joined the pension scheme in 1986 then she would be a Section B member.
Section B members do not receive the pension supplement that members in Section C are entitled to when they leave Royal Mail employment and are receiving their Royal Mail pension until they reach their state pension.
So she is either in Section C or the transfer in supplement is something different if she is a Section B member.

[coldjim]

Thanks for all the replies! Its my understanding also that if she takes it before she is 60, she loses 25% right? so the lump sum will be 25% less also?

[heapsy]

Thanks for all the replies! Its my understanding also that if she takes it before she is 60, she loses 25% right? so the lump sum will be 25% less also?

Yes, that's right., it would be reduced. Further to previous comments regarding supplement. Did she join the RM pension when she joined the company, or after 31st March 1987? If the latter, that might explain the supplement mentioned.