Old AVC transfer to New AVC

[July 1981]

Does anyone know if I can transfer my AVC from the old pension over to my new AVC so they are both in the same place?

[Wullie10]

No but you can transfer it to a private pension. I'm waiting for the paperwork to begin the process

[Hyrrokkin]

No but you can transfer it to a private pension. I'm waiting for the paperwork to begin the process

Got my transfer forms as well - easy enough

[July 1981]

Thanks for the replies, are there advantages to moving to a private pension rather than leaving were they are until I want to access the money.

[Wullie10]

As I've already taken my 60 with AVC as a lump sum , it's just tidying up small amounts for me ( what remained ) . I wouldn't transfer an AVC before NRA 60 is accessed.

[RobertT]

Thanks for the replies, are there advantages to moving to a private pension rather than leaving were they are until I want to access the money.

Depends how and when you want to access it and the amounts of money involved. Also the charges, investment choices and returns.

Personally, I transferred my Bonusplan over to my personal pension after leaving RM, which meant I had more cash to fund my early retirement. Plus I'm avoiding paying tax on it too.

The Flexiplan will be used for the tax free cash when taking NRA60, with the excess(I have more than 25%) then also being transferred.

It'll come down to your circumstances and choices as to whether transferring is the right thing for you!

[July 1981]

Thanks Robert, I’ve just taken my NRA 65 early and have left my AVC untouched as I was trying to minimise my the amount of tax paid on my cash balance fund, I commuted by lump sum from my pension and used the CBF for my lump sum with the rest taxable, I won’t be accessing the AVC until I retire and intend to transfer at this point, it seems odd that you can’t roll the two AVC’s into one!

[Hyrrokkin]

As I've already taken my 60 with AVC as a lump sum , it's just tidying up small amounts for me ( what remained ) . I wouldn't transfer an AVC before NRA 60 is accessed.

Why not may i ask ?

I am thinking of transferring mine to my SIPP (HL) but leave untouched until NRA60

Just curious

[sweepster70]

I was going to start a new topic, but this one is similar to my question.
Once you have enough AVC's to fund your 25% is it worth continuing to invest in them?
Also, what would you say is the best way to invest the AVC's, with only having Royal Mail pensions?

[RobertT]

it seems odd that you can’t roll the two AVC’s into one!

Technically Bonusplan and Flexiplan are part of the RMPP and the new AVC is part of the RMCPP, and transfers between different RM pension schemes aren't allowed.

[RobertT]

As I've already taken my 60 with AVC as a lump sum , it's just tidying up small amounts for me ( what remained ) . I wouldn't transfer an AVC before NRA 60 is accessed.

Why not may i ask ?

I am thinking of transferring mine to my SIPP (HL) but leave untouched until NRA60

Just curious

The main reason being you may be able to take all your AVC's with NRA60 totally tax free, depending on which section you're in and how much you have in your pot.

If you transfer to a personal pension only the first 25% will be tax free, with the rest being classed as income and coming under normal PAYE tax rules.

As ever, it'll be an individual thing and what's best for one person isn't necessarily best for another.

[RobertT]

I was going to start a new topic, but this one is similar to my question.
Once you have enough AVC's to fund your 25% is it worth continuing to invest in them?

Depends which AVC's you're talking about?

No more contributions are allowed into Bonusplan or Flexiplan, so what you've got now towards your NRA60 lump sum will only change in line with the funds you're invested in.
If your AVC's are worth more than 25% you can either take the excess as a UFPLS, meaning the first 25% of that is also tax free, or transfer out for more flexibility.

The RMCPP has the lump sum booster which will help to push the standard lump sum towards 25% anyway, and paying into that is a no brainer.

Personally think the main benefit of the RMCPP AVC is salary sacrifice(PSE), which you take advantage of then transfer out your pot for more flexibility.

Also, what would you say is the best way to invest the AVC's, with only having Royal Mail pensions?

The RMPP website has a very good guide to AVC's, giving lots of info on how you should invest at different ages.
It'll come down to personal attitude to risk, but generally the younger you are, the more risk you should take. And as you approach retirement, you go the safer route and protect your gains.

[sweepster70]

Thanks Robert,
My plan to retire in just over 9 years. If I can go earlier I will.
I'm in Bonusplan and Flexiplan, so all that will go towards my NRA60, along with a small amount of my Cash balance, hopefully.
I'm also paying the extra 1% and paying AVC's along with the new pension.
I have written about this before, but the concern is the Cash balance and my NRA65. The cash balance is £40.998 as of 31st March this year. My NRA65 in Capita is £939.87 including the supplement, as of last year. The NRA65 in the one looked after by Royal Mail is £3.392 as of the end of March this year. After taking 25% tax free, would I be able to take the rest as a UFPLS? (No idea what it is, but I will find out)
You mention transferring out my pot, what does this actually mean.
Sorry for the long winded reply, but every bit of useful information goes towards me hopefully making the right choice.
Thanks again.

[Wullie10]

As I've already taken my 60 with AVC as a lump sum , it's just tidying up small amounts for me ( what remained ) . I wouldn't transfer an AVC before NRA 60 is accessed.

Why not may i ask ?

I am thinking of transferring mine to my SIPP (HL) but leave untouched until NRA60

Just curious

Robert beat me to it. Yes I took the full amount they allowed as a tax free lump sum. The remaining £3000 odd I'll just transfer to my private pension. Everyones situation Is different of course.

[RobertT]

I have written about this before, but the concern is the Cash balance and my NRA65. The cash balance is £40.998 as of 31st March this year. My NRA65 in Capita is £939.87 including the supplement, as of last year. The NRA65 in the one looked after by Royal Mail is £3.392 as of the end of March this year. After taking 25% tax free, would I be able to take the rest as a UFPLS? (No idea what it is, but I will find out)

You don't say which section you're in(sounds like C), but the usual use of the Cash Balance(DBCBS) is to fund the tax free lump sum with NRA65, with any excess being paid out as an UFPLS. That stands for Uncrystalised Funds Pensions Lump Sum, which in the world of RM pensions just means that 25% of that excess is also tax free, with the remainder being classed as income and coming under normal PAYE tax rules.

The DBCBS is specifically attached to your RMPP NRA65 pension, so the RMSPS element isn't relevant.
Plus in a twist only known to RM pensions, a small amount can sometimes be taken with NRA60, which you'll be advised on at the time.

You mention transferring out my pot, what does this actually mean.
Sorry for the long winded reply, but every bit of useful information goes towards me hopefully making the right choice.
Thanks again.

Instead as taking your AVC's and DBCBS with your main NRA60/65 benefits, you also have the option to transfer them out to a personal pension, which might offer different options, such as drawdown or annuity. Which are more flexible ways to access that cash.
But be wary of any tax implications, as already been mentioned upthread.

The rules with AVC's and the DBCBS are slightly different:

AVC's – If there's any excess after taking the tax free cash with NRA60, that can either be paid out as a UFPLS or transferred.

DBCBS – any excess can be paid out as a UFPLS, but it can't be transferred.

Both have the option to transfer separately from taking your main NRA60/65 benefits. But an IFA needs to 'sign off' any DBCBS transfers over £30k and most won't be interested as it's low value, or their charges will be high and make it expensive.