PENSION, AVC & SIPP

[RobertT]

The last couple of weeks I have been an increased amount of AVCs. I have qualified for PSE. This week, the payments are in the right hand column and I am no longer benefiting from PSE. Any ideas why this should happen, if I WAS previously?
Week 52 of pay.

Your post PSE pay has dropped below the £10k yearly limit?

[RobertT]

I know of a chap at our place who is aged about 63 and I pointed out that he needed to really consider taking NRA60 benefits NOW but I got the feeling that he just didn't have a clue what I was talking about. I fear that he did not start drawing the NRA60 benefits when they became available.

We can debate on the merits of taking your pension early and taking the 5% per year hit, as we have done many times on these threads and it’s something I don’t particularly agree with. But not taking it until after NRA is just as bad, if not worse.

Someone else today at work mentioned something about ISAs and how poor they were doing. I can only only surmise that they invested in cash ISAs. I have kept a spreadsheet track of all my ISAs (Stocks and Shares) and AVCs from the point I was able to invest and they have done very nicely in the last 2-3 years.

My S&S ISA investments, AVC’s and another pension I have, have done brilliantly over the last few years too. They can be volatile sometimes but over the longer term, equities always outperform cash.
And as many cash accounts offer interest rates below inflation, your money will effectively be going down in value.

I will shortly divert some of my present stuff into more 'solid' stuff before retirement just in case the market tanks. But even if it did, in the short-medium term I can ride it out so long as we don't get a 'Wall Street Crash' scenario

It’s always a good idea to transfer some money to safer havens prior to retirement. But as retirement can last 20-30 years, keeping a chunk in equities could well be a good thing too.

[BeamishStout]

It’s always a good idea to transfer some money to safer havens prior to retirement. But as retirement can last 20-30 years, keeping a chunk in equities could well be a good thing too.

Agreed. The lump sums I intend taking in 2018 (when I retire) may be depleted somewhat until state pension age (6 years later in my case) depending on lots of things but my goal is to draw my state pension at 66 (max if I can possibly stumping up some extra years) and my wife at 67 and still have at least 50% of assets (ISA's) still available to do with what we wish once we are both past state pensions kicking in. I fear many of my colleagues may be severely disappointed in what they are able to do when they retire.

[RobertT]

Agreed. The lump sums I intend taking in 2018 (when I retire) may be depleted somewhat until state pension age (6 years later in my case) depending on lots of things but my goal is to draw my state pension at 66 (max if I can possibly stumping up some extra years) and my wife at 67 and still have at least 50% of assets (ISA's) still available to do with what we wish once we are both past state pensions kicking in. I fear many of my colleagues may be severely disappointed in what they are able to do when they retire.

I’m planning on doing basically the same. My RM pension won’t be enough on its own, so will use AVC’s & ISA’s to supplement it until SPA(67). From then on, my basic income will be a healthy amount and I should still have some savings left over to dip into on an ad-hoc basis, as and when I chose.

It sounds as if your colleagues are similar to mine. Many will be working for much longer than they seem to realise and will be worse off than they think.

[heapsy]

The last couple of weeks I have been an increased amount of AVCs. I have qualified for PSE. This week, the payments are in the right hand column and I am no longer benefiting from PSE. Any ideas why this should happen, if I WAS previously?
Week 52 of pay.

Your post PSE pay has dropped below the £10k yearly limit?

No idea. Cannot understand why it was ok for two weeks, then it changed. Will phone them tomorrow.

[RGSIPP]

Does anyone have any experience of transferring a Royal Mail NRA 60 pension to a SIPP or a flexible benefit personal pension scheme.

I've contacted RM pensions and they say it isn't possible and spoken to Aegon (my personal pension provider) who say I'll need a letter from a IFA.

Any replies would be appreciated.

[RobertT]

Does anyone have any experience of transferring a Royal Mail NRA 60 pension to a SIPP or a flexible benefit personal pension scheme.

I've contacted RM pensions and they say it isn't possible and spoken to Aegon (my personal pension provider) who say I'll need a letter from a IFA.

Any replies would be appreciated.

The RMSPS which relates to all RM pension up to 2012(the NRA60 element closed in 2008), is now the responsibility of the government. They have said transfers are not allowed!

The same question was asked on here only a few days ago: http://www.royalmailchat.co.uk/communit ... 27&t=80756" onclick="window.open(this.href);return false;

[RGSIPP]

thank you

[milly]

Does anyone have any experience of transferring a Royal Mail NRA 60 pension to a SIPP or a flexible benefit personal pension scheme.

I've contacted RM pensions and they say it isn't possible and spoken to Aegon (my personal pension provider) who say I'll need a letter from a IFA.

Any replies would be appreciated.

The RMSPS which relates to all RM pension up to 2012(the NRA60 element closed in 2008), is now the responsibility of the government. They have said transfers are not allowed!

The same question was asked on here only a few days ago: http://www.royalmailchat.co.uk/communit ... 27&t=80756" onclick="window.open(this.href);return false;

I have asked for a CETV figure off my Final Salary Pension with a view to possibly transferring it into a Sipp.
According to the person in the Pension Service Centre it is possible.

[RobertT]

I have asked for a CETV figure off my Final Salary Pension with a view to possibly transferring it into a Sipp.
According to the person in the Pension Service Centre it is possible.

That's not what they say on the website: http://www.royalmailpensionplan.co.uk/s ... erring-out" onclick="window.open(this.href);return false;

Your pension has different parts, including:
• The RMSPS benefits you built up before 1 April 2012 and the RMPP benefits you built up after this date.
• Age60 benefits, which are usually paid when you reach 60, and Age65 benefits, which are usually paid when you reach 65.
• Additional Voluntary Contributions (AVCs), if you choose to pay them.

You can transfer different parts separately. However, under Government rules you can’t transfer your RMSPS benefits to a Defined Contribution arrangement (that includes the Royal Mail Defined Contribution Plan). Contact the Pensions Service Centre for more information. Remember: you should always get financial advice to ensure you make the choice that’s right for you.

[milly]

I have asked for a CETV figure off my Final Salary Pension with a view to possibly transferring it into a Sipp.
According to the person in the Pension Service Centre it is possible.

That's not what they say on the website: http://www.royalmailpensionplan.co.uk/s ... erring-out" onclick="window.open(this.href);return false;

Your pension has different parts, including:
• The RMSPS benefits you built up before 1 April 2012 and the RMPP benefits you built up after this date.
• Age60 benefits, which are usually paid when you reach 60, and Age65 benefits, which are usually paid when you reach 65.
• Additional Voluntary Contributions (AVCs), if you choose to pay them.

You can transfer different parts separately. However, under Government rules you can’t transfer your RMSPS benefits to a Defined Contribution arrangement (that includes the Royal Mail Defined Contribution Plan). Contact the Pensions Service Centre for more information. Remember: you should always get financial advice to ensure you make the choice that’s right for you.

It says you can't transfer it into a Defined Contribution Plan,it doesn't mention that you can't transfer to a SIPP.

[RobertT]

It says you can't transfer it into a Defined Contribution Plan,it doesn't mention that you can't transfer to a SIPP.

A SIPP is just a different kind of DC pension, alongside personal pensions & stakeholders. The only real difference is that the investment choice is much bigger.

[milly]

It says you can't transfer it into a Defined Contribution Plan,it doesn't mention that you can't transfer to a SIPP.

A SIPP is just a different kind of DC pension, alongside personal pensions & stakeholders. The only real difference is that the investment choice is much bigger.

I am not sure why they would agree to send me a CETV that takes 13 weeks to produce if it is not possible to transfer out my Final Salary Pension.

[jetblack]

It says you can't transfer it into a Defined Contribution Plan,it doesn't mention that you can't transfer to a SIPP.

A SIPP is just a different kind of DC pension, alongside personal pensions & stakeholders. The only real difference is that the investment choice is much bigger.

I am not sure why they would agree to send me a CETV that takes 13 weeks to produce if it is not possible to transfer out my Final Salary Pension.

Be sure to keep us posted how you get on with that Milly - will be interesting.

[nataddick]

This is a very interesting development ! I have followed the link provided by Robert to the relevant section on the RMPP website and the option on the RMSPS part appears to be ruled out. I am not sure why the Government would not want to reduce its liabilities if a member found the CETV offered to be at an acceptable level and provided they had sought professional advice that would mitigate any criticism, bad press etc.

Asking for a CETV as an option that I had intended to explore post RMPP closure and I am fully aware of all the caveats including the need to demonstrate that I have received financial advice. The actual value offered by RM, Is of course, critical to the decision making process. A value of around 20 times my pension would be of no interest to me but at 30 it would be worthy of serious consideration. At the top end, 40 times I would snap their hand off. To pay for advice that I don't need would be painful but I understand the need for this requirement. At 40 times it would go straight into my SIPP and give far greater control of my retirement and inheritance planning. Agree, a SIPP is a DC scheme.

I take milly's point about what she had been told but then experience tells me that our own Pensions Department in Sheffield are not without fault. I will need to do some research on this hot topic. I am sure I have a copy of the RMSPS scheme rules stored away somewhere.