Pension at 55

[TheStrangler]

Can anyone tell me how you go about taking your pension at 55.
Can they decline to let you take it?
I've done 23 years service but have no idea what sort of figures I'd be looking at as I'm 6 months or so from my 55th birthday so helpline can't give me even a rough idea on max pension or reduced and lump sum
There's also the possibility of vr to add to the confusion!

[RobertT]

Can anyone tell me how you go about taking your pension at 55.

You get in touch with the PSC a bit closer to the time and ask for a quote. You then say yes or no!

Taking your pension and continuing to work(if that's the plan) generally isn’t a good idea. This video tells you more: https://www.youtube.com/watch?v=ICYgWTAD3aA" onclick="window.open(this.href);return false;

Can they decline to let you take it?

They do say in the documentation that you need the companies consent to take it early, but as it’s legally possible to take a pension from age 55, there shouldn’t be a problem.

I've done 23 years service but have no idea what sort of figures I'd be looking at as I'm 6 months or so from my 55th birthday so helpline can't give me even a rough idea on max pension or reduced and lump sum

Your NRA60 will be reduced by 25% and your NRA65 to date by 50% - you can work it out roughly from the figures on your last annual statement.

Or try the calculator on the pensions website: http://www.royalmailpensionplan.co.uk/s ... ur-pension" onclick="window.open(this.href);return false; - you may have to alter your DOB!

There's also the possibility of vr to add to the confusion!

VR is a payment based on your salary, age and length of service and would be separate to you choosing to take your pension. Unless you’re actually offered EVR in which case you’d get an enhanced pension of 37.5% of what you would have got had you worked until 65. But EVR is probably unlikely due to the terms of MTSF2.

[TheStrangler]

Thanks Robert.
I wasn't sure if you're meant to add nra60 and nra65 together or if it were a case of one or the other.
Also, in what circumstances would Early Voluntary Retirement be offered (as opposed to voluntary redundancy) ?

[RobertT]

Thanks Robert.
I wasn't sure if you're meant to add nra60 and nra65 together or if it were a case of one or the other.

You have 4 options:

Carry on as you are and don’t take any benefits early
Take just your Age60 benefits early
Take just your Age65 benefits early
Take all of your benefits early

Bear in mind that the two important figures on your annual statement are the ‘pension at 60’ amount on page 2 and the ‘total pension’ amount on page 4. Subtract one from the other and you have the NRA65 amount up to statement date(31/3/16). It shouldn’t be too difficult to work out from that roughly what you’ve accrued since then.

Make the appropriate reductions and then add the NRA60 & NRA65 together(if you want to take both) to give you your combined pension amount.

Lump sums and supplements will also see the 5% per year reduction!

Also, in what circumstances would Early Voluntary Retirement be offered (as opposed to voluntary redundancy) ?

For EVR you have to be over 55 and the total cost to RM must not exceed 2 years pay. The full MTSF2 agreement is on this site somewhere, but this is the important bit:

Voluntary Redundancy Cap
It has not been possible to persuade the business to further extend the suspension of the cap. With effect from 1st October 2015 the suspension will be lifted. This does not affect redundancy terms based on the multiplier but will limit the ability of members of the Royal Mail Pension Plan (RMPP) to receive immediate payment of enhanced pension to circumstances in which the total cost to the business does not exceed the equivalent of two year’s pensionable pay.
Where the combined redundancy and pension cost would exceed the equivalent of two years pensionable pay, cash compensation of 104 weeks pensionable pay will be offered instead.

[TheStrangler]

Thanks for your help Robert did ring the pension helpline but they're insistent they will not help me with even a very rough estimate!
They said the figures on my statement assume I'm working till 60/65 and there's more to it than simply deducting 25/50%
Told them there may be vr opportunity several months before my 55th birthday but it was no use!

[RobertT]

Thanks for your help Robert.
Are the pension supplement figures for Nra 60 and 65 also reduced by the same percentages when calculating?

As far as i know yes they are. Although if you're using the online calculator it does give figures that are much lower than you'd expect.

Thanks for your help Robert did ring the pension helpline but they're insistent they will not help me with even a very rough estimate!
They said the figures on my statement assume I'm working till 60/65 and there's more to it than simply deducting 25/50%
Told them there may be vr opportunity several months before my 55th birthday but it was no use!

Like I said, if you use the ‘total pension’ amount, and the NRA60 amount, you can get a rough ballpark idea of what you might get, minus the reductions for early payment.
The ‘estimated pension at 65’ in particular is irrelevant, because the scheme is closing in April 2018 anyway. So for example:

Total pension = £10,000
NRA60 pension =£7,000
Therefore NRA65 pension at statement date = £3,000. Which equals 6 years worth(2010-2016), so another year up to 2017, would be roughly another £500. Giving you a total of £3,500.

Then make the 5% per year reductions. In that example your NRA60 would be £5,250 & your NRA65 would be £1,750 if taking them both at 55.

Alternately use the calculator on the website and change your date of birth so that you fit the criteria.

No method will be 100% accurate, but they will give you a reasonable idea of what you might get.

[fly-catchers]

Thanks for your help Robert.
Are the pension supplement figures for Nra 60 and 65 also reduced by the same percentages when calculating?

As far as i know yes they are. Although if you're using the online calculator it does give figures that are much lower than you'd expect.

I will interested to see what the Pension centre say about taking the NRA65 early with regards to the supplement. Because assuming the calculator is wrong you would end up much better off taking at least the NRA65 supplement early. On my calculations if you took it for the one year till in my case the state pension kicks in I would get £440 for one year. If on the other hand it is reduced by 25% if taken 5 years early I would get on average £330 for those 6 years till my state pension starts giving me about £1980 in all! So would not be surprised if the far greater reduction to £78 on the calculator is correct!!

[TheStrangler]

I've been reading a lot of pension literature and I saw something about "if you leave the company before you're 55 you can't touch your pension till you're 60 , would anyone know if this is the case as I've a feeling I'd be offered vr before I reach 55!
If this is indeed the case , if I accepted vr but working my notice period took me beyond my 55th birthday would that then mean I could in fact access my pension at 55?

[RobertT]

I've been reading a lot of pension literature and I saw something about "if you leave the company before you're 55 you can't touch your pension till you're 60 , would anyone know if this is the case as I've a feeling I'd be offered vr before I reach 55!
If this is indeed the case , if I accepted vr but working my notice period took me beyond my 55th birthday would that then mean I could in fact access my pension at 55?

If you leave RM before age 55 whether that’s by voluntary redundancy or not, your pension will be deferred. You can then choose to take it any time after 55 if you want to.

Have a read of ‘your options as a deferred member’ guide here: http://www.royalmailpensionplan.co.uk/s ... an/library" onclick="window.open(this.href);return false;

[TheStrangler]

Thanks , I had a look at the link but it would appear from this , that if I left before the age of 55 I'd have to wait till I'm 60 to access it?
It lists the options (top of page) as
1 leaving it alone until I reach 60 or
2 transferring to another pension!
Hopefully I'm taking it too literally otherwise I'm gonna be crossing everything that vrs don't kick in until I hit 55!

[RobertT]

Thanks , I had a look at the link but it would appear from this , that if I left before the age of 55 I'd have to wait till I'm 60 to access it?
It lists the options (top of page) as
1 leaving it alone until I reach 60 or
2 transferring to another pension!
Hopefully I'm taking it too literally otherwise I'm gonna be crossing everything that vrs don't kick in until I hit 55!

There are more to these guides than just the first paragraph!

If you scroll down the page you get to this bit:

Can I take my benefits early?
There are some circumstances when you can apply to receive your benefits before you reach Normal Retiring Age:

Ill health
If you are too ill to work at any time after you leave the Company, you may be eligible to receive your benefits early (without any reduction) on ill health grounds. If this applies, all of your RMSPS benefits (NRA 60 benefits and NRA 65 benefits) must start to be paid at the same time. In order to establish whether you qualify for immediate payment of your benefits you will need to apply to the PSC whose details are included at the back of this guide. They will ask you to complete an authority for a medical report from your GP or specialist to be sent to our medical adviser who will consider this against the Rules on ill health retirement and applicable tax legislation.
To qualify for immediate payment, we have to agree that you would have been retired on ill health grounds had you still been in Company employment. If you are under age 55 however, you must not be engaged in any employment at the time of application or payment.

Compassionate grounds
If you are age 55 or over and have left the Company’s employment, you may be eligible to receive your benefits early on compassionate grounds. This may apply, for example, if you have to give up work to be a full-time carer for your husband, wife, partner or a relative. In this case, a reduction to reflect payment before NRA would be applied to the benefits relating to any pensionable service on or after 1 December 2006. Benefits relating to pensionable service before that date would (if paid) be payable without reduction.
In order to establish whether you qualify for immediate payment of your benefits on compassionate grounds, you will need to apply to the PSC. They will ask you to provide some details about your circumstances (and those of anyone for whom you are providing care). We will then decide whether to put your preserved benefits (which may be your NRA 60 benefits, NRA 65 benefits, or both) into payment.

Reduced early payment
At any other time, provided you are at least age 55, you can apply to us to receive early payment of your benefits (NRA 60 benefits, NRA 65 benefits or both). Your benefits will be reduced to reflect payment before NRA, using a factor determined by us, subject to the reduced pension not being less than your GMP.
If you want to apply to receive your benefits early you should write to the PSC.

[stroller]

Thestrangler,

If you was offered VR at 54 and your LDOS was on or after your 55th birthday your pension figures would be on your VR or EVR figures, hope this helps

[TheStrangler]

Yes , thanks.

[sweepster70]

A question to RobertT,
I know the best time to take your pension is when you are supposed to take it.
As we no longer retire at 60, how does this work with our final salary pension?

[RobertT]

A question to RobertT,
I know the best time to take your pension is when you are supposed to take it.
As we no longer retire at 60, how does this work with our final salary pension?

The final salary pension closed in 2008 but our NRA60 relates to our pensions up to 2010, so includes the first 2 years of the CARE/CSDB scheme.

If we take our pension early it gets reduced by 5% per year, plus if we’re still working another 20% would come off in income tax. But if we defer it after NRA, it doesn’t increase other than by inflation, which it would do in payment anyway.

So although we would be paying tax on the NRA60 pension if still working, we would lose a lot more by deferring it.

Bear in mind that anything earned over the personal tax allowance(currently £11,500) is taxed and pensions including the state pension count as income!

These things will always vary on the individual, but in general taking our pensions at their normal retirement age’s (60 & 65) will give the best outcome, based on average life expectancy. This will be particularly true with someone with the majority of their RM service in the pre 2010 NRA60 pension.