RMSPS Website

[freespeech]

I went on the website today having previously had problems with it in that it wouldn't give me any figures. Today, however, all seemed well. Am I correct in thinking that the only figure given here is the NRA60 illustration? On the assumption that it includes the supplement it appears to be about £800 in my favour which is always good news. Can anyone confirm what the "estimated annual pension" figure actually consists of please?

[freespeech]

Looking at this more closely (and using RobertT's excellent calculation), I reckon this is final salary plus 2 CSDB credits but less the supplement. This is about £230 more than the calculation which is probably the increase since last March.

[RobertT]

It's the RMSPS website so it includes benefits up to 31st March 2012, which is all final salary(up to 2008) plus the first 4 years(2008-2012) of CSDB.

My figures either include the supplement or are way off the mark. I assume it's the former!

[freespeech]

It's the RMSPS website so it includes benefits up to 31st March 2012, which is all final salary(up to 2008) plus the first 4 years(2008-2012) of CSDB.

My figures either include the supplement or are way off the mark. I assume it's the former!

Bloody hell....so confusing! SO your calculator for NRA60 benefits is final salary plus 2/10 of CSDB but the RMSPS website is all NRA60 and a bit of NRA65 so all final salary plus 4/10 of CSDB?

[freespeech]

It's the RMSPS website so it includes benefits up to 31st March 2012, which is all final salary(up to 2008) plus the first 4 years(2008-2012) of CSDB.

My figures either include the supplement or are way off the mark. I assume it's the former!

Bloody hell....so confusing! SO your calculator for NRA60 benefits is final salary plus 2/10 of CSDB but the RMSPS website is all NRA60 and a bit of NRA65 so all final salary plus 4/10 of CSDB?

Thats £1300 worse now and doesn't include the supplement either........

[RobertT]

It's the RMSPS website so it includes benefits up to 31st March 2012, which is all final salary(up to 2008) plus the first 4 years(2008-2012) of CSDB.

My figures either include the supplement or are way off the mark. I assume it's the former!

Bloody hell....so confusing! SO your calculator for NRA60 benefits is final salary plus 2/10 of CSDB but the RMSPS website is all NRA60 and a bit of NRA65 so all final salary plus 4/10 of CSDB?

Yes!

If I add together the following from my 2019 annual illustration:

final salary pension
final salary supplement
4 years worth of CSDB pension
4 years worth of CSDB supplement

it comes to £50 short of the figure shown on the RMSPS website, which is close enough for me.

[freespeech]

It's the RMSPS website so it includes benefits up to 31st March 2012, which is all final salary(up to 2008) plus the first 4 years(2008-2012) of CSDB.

My figures either include the supplement or are way off the mark. I assume it's the former!

Bloody hell....so confusing! SO your calculator for NRA60 benefits is final salary plus 2/10 of CSDB but the RMSPS website is all NRA60 and a bit of NRA65 so all final salary plus 4/10 of CSDB?

Yes!

If I add together the following from my 2019 annual illustration:

final salary pension
final salary supplement
4 years worth of CSDB pension
4 years worth of CSDB supplement

it comes to £50 short of the figure shown on the RMSPS website, which is close enough for me.

Using the same approach mine is close to a £3k difference to my detriment. No idea where to go from here in trying to work out my future. Guess I'll wait for the statements next month and see if they shine any light.

[tractorboy2]

I'm in section C , so would I be right in saying that any lump sum only comes from the final salary component ? As the RMSPS website only showed me an estimated annual pension figure which would include the CSDB portion as well.
I'm also not sure if taking the maximum lump is really that beneficial , I was planning on doing so and dividing that up until I reach state pension age , but once its gone its gone.

[Steve_claret]

I'm in section C , so would I be right in saying that any lump sum only comes from the final salary component ? As the RMSPS website only showed me an estimated annual pension figure which would include the CSDB portion as well.
I'm also not sure if taking the maximum lump is really that beneficial , I was planning on doing so and dividing that up until I reach state pension age , but once its gone its gone.

That was my plan also. I took the max NRA60 lump sum and just banked it and will only dip into it when I leave RM in about 2 years time at 62. I get my state pension at 66 so will need to have 4 years worth of money to bridge the gap. My lump sum should easily cover that plus have enough for a few luxuries once this Covid virus goes away. I agree you have to be disciplined once you have a stash of money sat in your bank account but that is totally down to the individual.

[freespeech]

I'm in section C , so would I be right in saying that any lump sum only comes from the final salary component ? As the RMSPS website only showed me an estimated annual pension figure which would include the CSDB portion as well.
I'm also not sure if taking the maximum lump is really that beneficial , I was planning on doing so and dividing that up until I reach state pension age , but once its gone its gone.

That was my plan also. I took the max NRA60 lump sum and just banked it and will only dip into it when I leave RM in about 2 years time at 62. I get my state pension at 66 so will need to have 4 years worth of money to bridge the gap. My lump sum should easily cover that plus have enough for a few luxuries once this Covid virus goes away. I agree you have to be disciplined once you have a stash of money sat in your bank account but that is totally down to the individual.

My view is that it depends on your ability to not spend the money. If you draw max lump sum tax free that will reduce the taxable element of the pension assuming you are above the personal tax allowance. It will also gain a bit of interest too. However, if you are tempted to spend some of it you could be in dire straits in future years.

[TheStrangler]

I'm also not sure if taking the maximum lump is really that beneficial , I was planning on doing so and dividing that up until I reach state pension age , but once its gone its gone.

As has been said, it all depends on your lifestyle. If you like brand new cars and expensive holidays maybe not such a good idea.
I'm more than happy to let the lump sum bridge the gap from retirement to pension age, after all,it's your pension and that's what it's for!
Once you have 2 pensions at state pension age I reckon that should be sufficient and I regard myself as fortunate if I get to that point.
Some people (I do realise not all of course) manage ok with just the state pension. To have maybe double that is, to my mind, a good position to be in.

[Steve_claret]

I'm in section C , so would I be right in saying that any lump sum only comes from the final salary component ? As the RMSPS website only showed me an estimated annual pension figure which would include the CSDB portion as well.
I'm also not sure if taking the maximum lump is really that beneficial , I was planning on doing so and dividing that up until I reach state pension age , but once its gone its gone.

That was my plan also. I took the max NRA60 lump sum and just banked it and will only dip into it when I leave RM in about 2 years time at 62. I get my state pension at 66 so will need to have 4 years worth of money to bridge the gap. My lump sum should easily cover that plus have enough for a few luxuries once this Covid virus goes away. I agree you have to be disciplined once you have a stash of money sat in your bank account but that is totally down to the individual.

My view is that it depends on your ability to not spend the money. If you draw max lump sum tax free that will reduce the taxable element of the pension assuming you are above the personal tax allowance. It will also gain a bit of interest too. However, if you are tempted to spend some of it you could be in dire straits in future years.

As I planned on carrying on working full time for a couple of years after drawing my 60 pension my thinking was take the max lump sum and so reduce my annual pension to pay less tax. I have also increased my AVC payments quite substantially to offset the additional tax I pay on my pension and also with PSE saving the 12% NI it's a no brainer for me. For every pound that goes into my AVC fund it only reduces my take home pay by 68p. My monthly pension payments even after paying the 20% BR tax more than makes up for the reduction in my take home pay.

[RobertT]

I'm in section C , so would I be right in saying that any lump sum only comes from the final salary component ? As the RMSPS website only showed me an estimated annual pension figure which would include the CSDB portion as well.

NRA60 benefits relate to service up to 2010, while NRA65 is from 2010 to 2018.
Each will have a pot value which is worked out as pension x 20. You can take a max 25% of each pot as tax free cash. For example with an NRA60 worth £6k(inc. supplement):

6,000 x 20 = 120,000 / 4 = 30,000 lump sum
Divide the remainder by 20 to give remaining pension, which in this example would be £4,500

It's easy to find rough NRA60 & NRA65 figures using the amounts on your annual illustration and the method here.

Remember to reduce your pot values by 5% for each year you want to take them before NRA.

I'm also not sure if taking the maximum lump is really that beneficial , I was planning on doing so and dividing that up until I reach state pension age , but once its gone its gone.

I'm not sure I can add anything more to what's already been said. There are plenty of uses for your lump sum, assuming you take one:

Invest it for sometime in the future.
Use it to bridge the gap to state pension age.
Pay off some debts.
Help the kids/grand kids out.
Go on a spending spree.
Etc.

There's no one size fits all, because everyone's circumstances will be different. Some will prefer the bigger pension, while others will want to do a Viv Nicholson.

But using it to bridge the gap to state pension age is a good use in my opinion. Because although it means less income for life, it might mean being able to retire earlier.

[tractorboy2]

I'm also not sure if taking the maximum lump is really that beneficial , I was planning on doing so and dividing that up until I reach state pension age , but once its gone its gone.

I'm not sure I can add anything more to what's already been said. There are plenty of uses for your lump sum, assuming you take one:

Invest it for sometime in the future.
Use it to bridge the gap to state pension age.
Pay off some debts.
Help the kids/grand kids out.
Go on a spending spree.
Etc.

There's no one size fits all, because everyone's circumstances will be different. Some will prefer the bigger pension, while others will want to do a Viv Nicholson.

But using it to bridge the gap to state pension age is a good use in my opinion. Because although it means less income for life, it might mean being able to retire earlier.[/quote]
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I have been contemplating retiring at 60 which is around 16 months away, so let me see if I can clarify what I mean regarding the lump sum.
If you take the lump sum and your only plan is to use this to bridge the gap to State Pension , you would divide the lump sum by 84 (7 years * 12 months) to give yourself a monthly amount to play with.
But the difference between the full pension and reduced pension when multiplied by 84 is almost going to equal the amount you got as a lump sum. Which after the 7 years (taking it all as pension) you would still be getting that difference , whereas the lump sum would be gone. Under the scenario I have illustrated ( clearly hopefully) is there any benefit in taking the lump sum ?

ps Thanks RobertT

[stephen500]

The choices with the NRA 60 (RMSPS) are clear, You can reduce your pension by around 15% and take the max lump sum and you also have another choice to totally wipe out your lump sum and have a bigger pension, or have a standard pension and min LS.
But the option to take the biggest pension instead of the standard and min LS, or the reduced and the max LS, for both options, you would have to live 19 years with increased annual pension payments to start gaining money.

pen 3.jpg

NRA 65 (RMPP)with the choice to take the max pension options 3B, the loss for me would be almost £6000.
For option 3B instead of 2A, gaining the same £146.19 a year, would see me recovering my losses in just 39 years of annual pension payments.
Option 2A for me is a no brainer, I get a standard pension and £19544 lump sums.
For me taking the max LS for NRA 60 (RMSPS option 2) Above slide, and option 2A for RMPP NRA 65 (below slide) are the best options.
I will use the lump sums to supplement my income for 7 years (using £57000 of it, to make my £11800 pension up to £20,000 per year), a much better use than a brand new car. At 67, yes I won't have that element of my lump sum, but at 67 I doubt I will care as my state pension comes in.
This is my personal opinion, you will have to make your own decision. Do not make any decisions based on my advice, I am just a postman. If unsure what to do, see a financial advisor.

RMPP pension with DBCBS 4.jpg

Options 1, 2,3,4 or 5, if you do not wish to use your DBCBS as a tax free lump sum in the way shown in options 2A or 3B you can:
See slide below;

pension fri final.jpg