Zurich pension

hiviz · Post by **hiviz** » 26 Aug 2018, 22:10

I have 20 years service and taken my nr60 and 65 pension was looking into taking out the zurich pension until retirement is it worth it and what are the attached benefits I am 57 years old if anyone can help I would be most grateful thank you.

arnold cheshire · Post by **arnold cheshire** » 26 Aug 2018, 22:21

The new scheme from April?

PistolPete · Post by **PistolPete** » 26 Aug 2018, 22:30

hiviz wrote:I have 20 years service and taken my nr60 and 65 pension was looking into taking out the zurich pension until retirement is it worth it and what are the attached benefits I am 57 years old if anyone can help I would be most grateful thank you.

RobertT is your man. I'm sure he'll be along shortly

Seymour Buts · Post by **Seymour Buts** » 27 Aug 2018, 01:35

Mine is gonna be worth 60 quid a week apparently (great)

Is that my whole pension? Or do a get a lump sum too?

I'm in the contribution based sceme.

Post by **RobertT** » 27 Aug 2018, 03:52

hiviz wrote:I have 20 years service and taken my nr60 and 65 pension was looking into taking out the zurich pension until retirement is it worth it and what are the attached benefits I am 57 years old if anyone can help I would be most grateful thank you.

The Zurich scheme is a defined contribution pension, so is basically just a pot of money with which you'll have different options when you come to access it. It benefits from contributions off RM upto a maximum of 10% of pensionable pay aswell as tax relief and PSE.

You have 4 choices when you access a DC pension:

1. Take your whole pension pot as a lump sum in one go. A quarter (25%) will be tax free and the rest will be subject to Income Tax and taxed in the usual way. Bear in mind that a large lump sum could tip you into a higher tax bracket for the year.
2. Take lump sums as and when you need them. A quarter of each lump sum will be tax free and the rest will be subject to Income Tax and taxed in the usual way. Bear in mind that a large lump sum could tip you into a higher tax bracket for the year.
3. Take upto a quarter of your pension pot (or of the amount you allocate for drawdown) as a tax-free lump sum, then use the rest to provide a regular taxable income.
4. Take upto a quarter of your pot as a tax-free lump sum and then convert some or all of the rest into a taxable retirement income (known as an annuity).

There's more general DC info here. Or you might find this video informative.

The RM Defined Contribution Plan guide is available here.

Based on a basic full time wage of £432.92 per week and a 6% employee contribution, you'd be paying £25.97 gross or £17.66 net(factoring in tax relief & PSE), plus £43.29(10%) off RM. So every week there would be £69.26 going into your pension and it's only costing you £17.66.
*There's no LED reduction from your wage as there is with section C of the RMPP!

DC pensions are great ways to save because of the 'free money' you get, but aren't very good at providing an income for life, due to the fact they're just glorified savings accounts and the amount of income you can buy(via an annuity) is very low. This link gives you an idea of the amount of pension you might be able to purchase and the different annuities that are available.

If you wanted to maximise the amount of pension you receive for the rest of your life, you'd have been better off not taking your NRA60 & NRA65 early! But as you did, then I think you'd be a fool not to sign up to the RMDCP and pay in the highest(6% / 10%) contribution rate.

Post by **RobertT** » 27 Aug 2018, 03:52

arnold cheshire wrote:The new scheme from April?

No, he's taken his NRA60 & NRA65 benefits, so is no longer a member of the RMPP and so can't join the DBCBS. Meaning the RMDCP is his only option at this time. I think he will still qualify to join the CDC scheme when or if that is implemented?

Post by **RobertT** » 27 Aug 2018, 03:53

postietom wrote:Mine is gonna be worth 60 quid a week apparently (great) Is that my whole pension? Or do a get a lump sum too?

I'm in the contribution based sceme.

You have different choices, see above.

arnold cheshire · Post by **arnold cheshire** » 27 Aug 2018, 19:24

Thanks for the reply

arnold cheshire · Post by **arnold cheshire** » 27 Aug 2018, 23:03

Very nice to get a reply

hiviz · Post by **hiviz** » 28 Aug 2018, 16:29

Thankyou for all your help everyone

arnold cheshire · Post by **arnold cheshire** » 08 Sep 2018, 20:41

arnold cheshire wrote:The new scheme from April?

Thanks for the reply Robert t