Collective Plan statement

[Downeagle]

I’m 67 in April and have been sent a statement suggesting what I could receive if I retired then, just thought I’d share it.
I’m section C full time and in receipt of my NRA60 & 65.

I have been contributing like others since October 2024 with the 1% uplift

An income for life £128 per year
A lump sum of £385
A lump sum booster £226

[RobertT]

Assuming it's based on 6 months membership(7th Oct-7th April), I would say it's a bit less than I'd expect a full timer to get.

How does it compare to the net amount you'll have paid in, and the transfer value?

[Downeagle]

I pay in £30.84 plus £5.14 for the 1% lump sum booster per week

My indicative transfer value for my income for life is £2,214
Transfer value for lump sum* is £611
*includes lump sum booster

[RobertT]

You don't say how many weeks you'll have paid in by the time you're 67 in April, but let's say it's 26.

Your weekly gross contribution of £35.98 works out as £25.90 net x 26 = £673.40

Your total transferable pot is worth £2,825 which is an increase of 320% on your total net contributions.
Or you take the lump sum(inc booster) upfront and take the yearly pension which could change up or down each year.

The £611 works out as about 21% of the total pot, so that's comfortably within the 25% tax free limit. Had you not paid into the booster, the standard £385 lump sum works out as around 15%.


A good example of why it's rarely a good idea to opt out of a company pension!

[renrag40]

If you go on the RMCPP website you can download an up to date indicative transfer value.
I do it every week because nothing warms the cockles of my heart more than to know how that pension pot is growing nicely, largely at the expense of Royal Mail and approximately how much will be added to my SIPP the day after I leave Royal Mail and start the ball rolling to transfer it over.

[Jaggs]

If you go on the RMCPP website you can download an up to date indicative transfer value.
I do it every week because nothing warms the cockles of my heart more than to know how that pension pot is growing nicely, largely at the expense of Royal Mail and approximately how much will be added to my SIPP the day after I leave Royal Mail and start the ball rolling to transfer it over.

This is something I've considered doing with this pension when I leave Royal Mail. I do wonder though if this collective scheme might end up going the way of DB schemes with any transfer value over £30,000 needing the approval of a financial advisor.

[RobertT]

As things stand, a CDC pension is classed legally as a DC/money purchase scheme, so the £30k rule won't apply if you want to transfer the pension element of the RMCPP.

As far as I know, the lump sum(inc booster) is DB and could fall foul of those regulations, in a similar way to the DBCBS has for some people.

Who knows if the rules/laws may be changed in the future?