RMPP benefit illustration question

[fly-catchers]

Looking at my Your Pension 2014 I was wondering why the differnce in amounts between the the Your Pension on page 2 and the NRA 60 benefits on page 4.
In both cases the final salary pension amount (section c) is the same as is the supplement. But the CSDB pension on page 2 has two headings with pension up to 31st March 2014 and also CSDB pension blocks up to 31st March revalued. On the page 3 listing it just lists a CSDB amount. The difference between page 2 and page 3 is about £1100. So which figure could I expect to get if I retired at 60? Or does the page 2 listing assume you are staying on till 65? Though the NRA 65 benefits for the CSDB are different again!

[RobertT]

The pension you accrued up to April 2010 has a NRA of 60 and those figures are under the heading ‘NRA60 benefits’.
The pension you might accrue if you carry on working for RM on the same pay as now until you’re 65 is under the heading ‘NRA65 benefits’.

The figures under ‘your pension’ are your NRA60 Benefits plus your NRA65 benefits from April 2010 to April 2014 and that’s what would be paid out if you were taking your pension in April 2014,minus any deductions for early payment.

It’s fair to say that the statements aren’t particularly clear and reading the latest edition of Pensions News it would seem that the trustees agree and are planning changes. Let’s hope they come up with something a bit easier to understand.

[fly-catchers]

Thanks for the reply Robert. Perhaps they should have you on the Pension team!
I know that the final salary ended in March 2008, but what is the significance of the March 2010 date? Or is that when the Goverment took the pension on?

[RobertT]

The FS pension did end in 2008 and was replaced by the CARE scheme, but the first two years of that (taking you up to March 2010) has a NRA of 60 aswell. Hence why you've got a fairly small amount of CSDB pension & supplement under your NRA60 benefits.

I think the government took the pension on in April 2012.

[stroller]

RobertT

My figures under your pension are £10,014 so does that mean if I leave now and call it in at 55, would that figure be minus 25%? and is that with the minimum lump sum?

[RobertT]

RobertT
My figures under your pension are £10,014 so does that mean if I leave now and call it in at 55, would that figure be minus 25%? and is that with the minimum lump sum?

The 'your pension' figures include your NRA60 benefits up to April 2010 and your NRA65 benefits up to April 2014, as at your last statement.Therefore the NRA60 element will face a 25% reduction while the NRA65 will see a 50% hit.

So in practical terms taking your pension at 55 would mean the 'Total Pension' amount under 'NRA60 benefits would be reduced by 25%. While the 'CSDB for year ending 31/3/14' and the 'CSDB pension blocks up to 31/3/14 revalued' under 'your pension' would need to be added together and then reduced by 50%.

The lump sums would also face reductions of the same percentages.
If you're a section C member, the supplement amounts would need to be reduced by those percentages aswell.

[stroller]

Thank you RobertT, a brilliant rely as always

[fly-catchers]

If you lose 25% & 50% from the two pensions if you retired at 55- what would the reduction be for age 57- having worked 27 years ?
Given my current knee issues I wonder if I will even be able to keep going till 60 and certainly not 65! :( Constant grumbles and being treated like a naughty schoolboy from DOMS who have had a fraction of the time at RM at my age is not what I want!

I have got Added years which had 7 years and 116 days purchased on the last 2014 statement. With 1 year and 49 days still left on the contract also from the 2014 statement.

[RobertT]

If you lose 25% & 50% from the two pensions if you retired at 55- what would the reduction be for age 57- having worked 27 years ?
Given my current knee issues I wonder if I will even be able to keep going till 60 and certainly not 65! :( Constant grumbles and being treated like a naughty schoolboy from DOMS who have had a fraction of the time at RM at my age is not what I want!

I have got Added years which had 7 years and 116 days purchased on the last 2014 statement. With 1 year and 49 days still left on the contract also from the 2014 statement.

Both elements of the pension are reduced by 5% for each year you take it early. So taking both at 57 would see your NRA60 reduced by 15% and your NRA65 by 40%.
If you leave and/or take your pension before you finish buying your added years, you obviously won't get the amount you would have got had you carried on paying.