Royal Mail Pension calculator

[stroller]

How accurate is the pension calculator on the Royal Mail pension website, you can now go on there at 54 years and 8 months for a estimate, i calculated somebody's figures in our office for them and It came out a lot better figures then they expected, just wondered how many of you had used it and how it compares to the figures you get sent to you?

[RobertT]

I’m still in my 40’s but I have played about with it a bit and all it really tells you is how much your estimated pension/s will be reduced by if you take them before normal retirement age.

So it’s very basic, for example there’s no allowance for inflation! But the trustees have stated they want to make things easier to understand and this is a start and something is better than nothing. Although I don’t really see why it’s not possible for younger people to use it aswell – retirement planning is all about the long term, not just from age 54 and 8 months onwards!

There are two words of caution I would add:
1) The figures you input into the calculator are just the estimated figures from your annual statement, they are not written in stone.
2) The closure of the RMPP to future accruals seems likely in 2018, so if that happens any figures relating to service after then would be wrong and the NRA65 estimates would be less.

[stroller]

RobertT,

Thanks for your reply, after putting my friends figures in and telling him how much his estimate pension was he was happy with the results that came up, like you I put my figures in and although my 55th birthday is in August I put my birthday down as the 15th of April 4 months time and set me taking it at 55.

It came up with a pension of £10,209 pension and £33,700 lump some for 33 1/2 years service can those figures be right?

[RobertT]

The figures will only ever be estimates and they do seem a bit high to me to be honest. But assuming you input the correct numbers from your statement then they should be in the right ball park.

[stroller]

RobertT

There is one vital section I overlooked when putting in my figures, the boxes where you have to put in your remaining service up to 65, which I found on my pension statement, anyway I added them in and re-calculated it and it came out quite a bit lower

[stephen500]

RobertT,

Thanks for your reply, after putting my friends figures in and telling him how much his estimate pension was he was happy with the results that came up, like you I put my figures in and although my 55th birthday is in August I put my birthday down as the 15th of April 4 months time and set me taking it at 55.

It came up with a pension of £10,209 pension and £33,700 lump some for 33 1/2 years service can those figures be right?

Note the figures it gives are for the min lump sums. I multiplied the min lump sums by approx 1.86 to get the max lump sums, although doing so will reduce your yearly pension for both pensions

[pj2001]

I thought you lost 5% for every year you take your pension early. So 5 years early at -5% pa = loss of 25% can't see your figures being so much.

[stroller]

pj2001

Did you not see my post to RobertT? Saying that I overlooked the box where you have to put in your remaining service, when I put the date in it came out at £8208 pension and £26791 minimum lump sum, but it will be slightly higher now as they were last years figures

[pj2001]

pj2001

Did you not see my post to RobertT? Saying that I overlooked the box where you have to put in your remaining service, when I put the date in it came out at £8208 pension and £26791 minimum lump sum, but it will be slightly higher now as they were last years figures

Oops, sorry stroller missed that

[fly-catchers]

On the Pension Plan calculator where it has the box Potential service to 65th birthday do you add in the number of years you have left till you reach 65 or the number of years from the age you want to retire? For example I am 58 but plan to retire at 60. So do I put in 7 or 5 years into that box? I guess 5. Also should the CSDB plan close in 2018 and is replaced by a DC plan would you get a better deal by taking the reduced CSDB as that would I assume still be based on what it would be worth if it had continued. Rather than the poorer DC replacement you would get if you retired later? And finally I know you get the pension supplement as long as you are retired, but do not get that bit if you stay in service. Do you still get it if you retire later than 60- again I guess you should!

[RobertT]

On the Pension Plan calculator where it has the box Potential service to 65th birthday do you add in the number of years you have left till you reach 65 or the number of years from the age you want to retire? For example I am 58 but plan to retire at 60. So do I put in 7 or 5 years into that box? I guess 5.

You put in the remaining years from your current age to 65, so if you’re 58, it would be 7. The exact figure can be found on your latest statement, although that is based on your service on 31st March 2015.

Also should the CSDB plan close in 2018 and is replaced by a DC plan would you get a better deal by taking the reduced CSDB as that would I assume still be based on what it would be worth if it had continued. Rather than the poorer DC replacement you would get if you retired later?

The figures on your statement(NRA65) are just an estimate of what you might get if you carry on working until 65 and if the scheme stays open. What you actually get will depend on your actual service when you take your pension and not on an estimate.

If/when the scheme closes in 2018 everybody still employed and paying in will have built up 10 years worth of CSDB pension. The first 2 years count as NRA60 and the other 8 years as NRA65. I assume what you’ve accrued up to that date will be ringfenced and will increase with inflation in a similar way to how the final salary part does now.

These things will vary from person to person to some extent because of different allowances, etc. But personally my CSDB pension has accrued at the average rate of just under £300 per year, so by 2018 the NRA65 part should be worth around £2,400. If the scheme closes then, it won’t be worth anymore than that, but as i say, will presumably increase by inflation each year afterwards.

And finally I know you get the pension supplement as long as you are retired, but do not get that bit if you stay in service. Do you still get it if you retire later than 60- again I guess you should!

Section C members get the supplement when they take their pension and leave RM. If that’s after 60 then they would still get it, equally if they take it early it would be reduced. But the supplement is only payable until you reach state pension age.

[fly-catchers]

Thanks Robert.
I see from my calculation forecast that retiring at 60 would see about a 49% reduction to my 65 pension and quite a bit more than that to the supplement part of the 65 pension. And of course that is before any further changes/reductions to the pension schemes!