MTSF - estimate received please help

[HAZIEC]

Hello
Can someone give me some advice please?
I am a postman with 17 years service. I will be 65 in Dec 2015.
My manager asked me if I was interested in VR as he needs to lose staff. He said he would get me an estimate and that I could prob go in July. I will be 64.627 - age at LDOS
He said it would take 2 weeks to get the information and after a week he said I had passed to stage 2 (whatever that means?)
He handed me a bit of paper today & i looked when I got home...
It is not giving me anything much that I wouldnt get if I retire in December? IS THAT CORRECT ?? Other blokes have got lump sums (VR) and their pensions.
Under terms..MTSF . The only figures are £12,610.99 MTSF under compensation and £1887.06 under annual pension & Supplement (pops only) £307.03
All other columns are 0.00
Cost in - 'yes'
Status- estimate complete
Offer to be made - MTSF

Im thinking that this just looks like my pension and I won't gain anything by going early?? Perhaps spmeone could help? I would be grateful for any advice please
Cheers
Len

[RobertT]

As I understand it your pension will be up rated by 37.5% of what you would have got if you continue until age 65. On top of that you will get 26 weeks pay or statutory redundancy pay, whichever is higher. More info can be found by clicking the link in Fishtanks post here: http://www.royalmailchat.co.uk/communit ... 36&t=33667" onclick="window.open(this.href);return false;

It would seem that the £12,610 is either the 26 weeks pay or SRP which you wouldn’t be getting if you wait until December. While it’s slightly unclear in your post whether the £1,887 is your annual pension or an amount on top of it. With 17 years service I would assume it would be higher than that(although that may depend on hours worked) so can you clarify please?

[baldrick]

Are you already receiving a pension from RM? £1887pa would seem to be a rather low pension for 17 years service - unless you are part time.
From what I can make out it would seem that this is a quote for the additional pension accrued after 60, plus 26 weeks VR lump sum payment.
If so I would have thought it is worth taking if you were going to retire at 65 anyway. You will be getting 6 months VR lump sum. If you retire at 65 you will be working another 6 months for the same amount. Also, you won't be paying tax on the VR lump sum as it is less than £30k, but if you continue working to 65 you will presumably be paying 20% tax on your earnings.

[N1-22postman]

Another option for you is to stop paying into any Royal Mail pension you are currently contributing to and you will be entitled to a larger VR lump sum and no pension enhancement. The lump sum will be calculated - "1.5 weeks pay for each full year of service where age during year is 41+ ; multiplied by 3.75". This would be 16 or 17 x 1.5 x 3.75 weeks pay = at least 90 weeks pay lump sum (maximum 104 weeks pay).
This may be a better option for you depending on your circumstances and it is what I did last year when I was 63 and accepted VR. You need to act quickly as it takes a few weeks to stop pension contributions.

[baldrick]

As N1-22postman says, if you can opt out of all RM pension scheme you are currently paying into before taking VR you would get a lump sum VR payment of 95.625 weeks. Your pension would be frozen until you reach 65 in December.

[HAZIEC]

Thank you for your replies...
I am full time and I took a lump sum of £18,500 at 60 and at present my pension is £3214.53 pa
I assumed that my manager has just given me a print out of what my pension will pay if I go now in terms of the £12k and the monthly amount? But puzzled as the manager offered me VR - is it because of my age?
I would be grateful for advice as I feel a bit concerned and would really like to get out now (as I had pneumonia in Dec and a chest infection in March) so its getting a bit too much for me.
Cheers
Len

[baldrick]

OK, so you have already taken your RM pension to 60.
So as you are over 55 and still paying into an RM pension, you are being offered EVR (Early Voluntary Retirement), which is the pension accrued since 60, plus a VR payment of 26 weeks pay.
If you can opt out of the RM pension which you are still paying into you will receive a VR payment of 95.625 weeks, and your accrued pension after 60 will be frozen until you are 65. This would seem to be the best option, as you will receive almost 70 weeks more VR (about £35,000 more).
But I don't know if you can opt out of your pension in time to get the VR. You would need to get in touch with HR to find out if that can be done.

[HAZIEC]

Thank you Baldrick thats very useful ! Clarifies things a lot !