Breaking - RMPP RMSPS - update on tax- 18 1st June application for winter payment 2020, diary time line

[celtic1967]

Is there a definitive answer to the question that has been raised on these threads a few times regarding how much you lose for taking the DBCBS early ? The RMPP site doesn't say.

I asked the question when I left on IHR last year and was told that if I take it with my NRA60 there would be no reduction

[stephen500]

Is there a definitive answer to the question that has been raised on these threads a few times regarding how much you lose for taking the DBCBS early ? The RMPP site doesn't say.

This is my estimation and the actual figures I received:
2018 DBCBS £5750
2019 DBCBS £5750
2020 DBCBS £3441 (@ £5900 per annum, reduced to 7 months Apr to Nov)
Total DBCBS £14941 This does not allow for any bonuses/increases paid??
Age 65 benefits shown with "statement of benefit options" DBCBS provisional fund value: £13776.81
I am taking my NRA 65, 5 years and 2 months early, with my NRA 60 (2 months early)
Looking at both my DBCBS for each year totalled and the provisional fund value, it looks to me that my reduction is around £233 for each year taken early.
Some one who is good at percentages, could perhaps work this out. But I think that's around 3 to 4% for each year??
Certainly less than the 26% I was expecting to lose.
However these figures or percentages may need adjusting as my intial figures do NOT include any increases due, so the reduction could be a little higher than the £233 per year I have shown.

RMPP pension with DBCBS 4.jpg

[RobertT]

Is there a definitive answer to the question that has been raised on these threads a few times regarding how much you lose for taking the DBCBS early ? The RMPP site doesn't say.

This is my estimation and the actual figures I received:
2018 DBCBS £5750
2019 DBCBS £5750
2020 DBCBS £3441 (@ £5900 per annum, reduced to 7 months Apr to Nov)
Total DBCBS £14941 This does not allow for any bonuses/increases paid??
Age 65 benefits shown with "statement of benefit options" DBCBS provisional fund value: £13776.81
I am taking my NRA 65, 5 years and 2 months early, with my NRA 60 (2 months early)
Looking at both my DBCBS for each year totalled and the provisional fund value, it looks to me that my reduction is around £233 for each year taken early.
Some one who is good at percentages, could perhaps work this out. But I think that's around 3 to 4% for each year??
Certainly less than the 26% I was expecting to lose.
However these figures or percentages may need adjusting as my intial figures do NOT include any increases due, so the reduction could be a little higher than the £233 per year I have shown.

RMPP pension with DBCBS 4.jpg

So Stephen lets ignore your estimates for a moment and go by what's actually included on the statement you've uploaded. As it says, the figures will be updated when all pay info, etc is known, so they're the most up to date official figures you've been given.

Your tax free DBCBS amount = £5,911
Your excess/taxable DBCBS amount = £7,865
Add the two together and you get a DBCBS pot = £13,766 – the total provisional amount!

So on the face of it, the statement suggests there won't be a reduction for taking the DBCBS early.
But the question is, how is that provisional amount made up? Will it increase to somewhere near your estimates? Or does it already include a %age reduction for taking it early?

[tractorboy2]

Um, I have given them 6 months notice to get my pension in Nov and leave RM in December.
I just spoke to Capita as the RMSPS is the pension that always seems to be paid after the RMPP.
From what I was told this will ALWAYS be the case. The RMSPS (Capita) pension CANNOT be paid until RMSPS have received a "trigger" from RMPP, stating that they are about to pay the RMPP pension.
That trigger takes a small amount of time and checking has to then take place.
Which means that if the "trend" followed for me, I could expect payment of my lump sum by RMSPS about 15 days at least after my RMPP payment date, leaving just enough time to get my first pension payment of 30th November.
RMSPS told me that cannot do any thing about RMPP sending this trigger and cannot pay until they receive it.
This makes RMSPS (Capita) look bad and RMPP look fantastic.
RMSPS did not suggest this was deliberate, but just a by product of the system in place.
Worst problems, to me, tend to be Avcs causing delays. I don't have any.

I am not sure I understand this
Prior to my 60th birthday , wouldn't my NRA60 options be automatically posted to me ? Does the RMPP have to notify RMSPS that my 60th is approaching ?
Also should I choose to retire at that age , how far in advance do I need to notify RMPP of my intention to take my NRA65 early.?
Do I have to continue working until I am in receipt of the NRA65 pension ?

[Steve_claret]

I am not sure I understand this
Prior to my 60th birthday , wouldn't my NRA60 options be automatically posted to me ? Does the RMPP have to notify RMSPS that my 60th is approaching ?
Also should I choose to retire at that age , how far in advance do I need to notify RMPP of my intention to take my NRA65 early.?
Do I have to continue working until I am in receipt of the NRA65 pension ?

If you take your 60 pension at 60 then everything should be done automatically. RMPP (PSC) send an electronic order to RMSPS (Capita) 17 weeks before your birthday to tell them to start the process and prepare your estimates. You should then receive both sets of estimates through the post which you have to return to them. I suppose a quick phonecall to the PSC around the 16 week mark to verify they have activated the process wouldn't go amiss.

[RobertT]

I am not sure I understand this
Prior to my 60th birthday , wouldn't my NRA60 options be automatically posted to me ? Does the RMPP have to notify RMSPS that my 60th is approaching ?

Stephen is actually taking his early and the he wanted to try and make sure he gets it on a certain date. If you're taking yours at NRA, they should contact you automatically.

Also should I choose to retire at that age , how far in advance do I need to notify RMPP of my intention to take my NRA65 early.?

As has already been said, you'll get a choices form asking whether you want to also take your NRA65 benefits at 60.

Do I have to continue working until I am in receipt of the NRA65 pension ?

You can leave whenever you want / can afford to.

[tractorboy2]

Thanks for your answers Guys.

The last question was because Stephen was told not to quit work until he had received his first pension payment , but I assume that is because he is retiring 2 months before his 60th birthday.

[stephen500]

Thanks for your answers Guys.

The last question was because Stephen was told not to quit work until he had received his first pension payment , but I assume that is because he is retiring 2 months before his 60th birthday.

Yes you are right. But also there are two ways of taking your pension, depending on whether you are still working for Royal Mail or have left.
If you are working for Royal Mail and want your pension at your NRA, they will contact you.
I wanted my NRA 60 2 months early and NRA 65, 5 years and 2 months early. So I requested my quote and pension.
The procedure for me, whilst still working, is that I had to contact RMPP, who are in charge of getting the ball rolling for both RMPP and RMSPS, as I said if you are still working.
But if you have left the business and are a deffered member, there is a different process. I think you have to contact both the RMPP and RMSPS.
If I chose to resign today, before I have received my confirmation date of payment and possibly my lump sums, then my request would actually be cancelled and I would have to follow the defered route of contacting both RMPP and RMSPS.

[stephen500]

Aug 2020 RMPP 1 blanked.jpg

Aug 2020 RMPP 2 blanked.jpg

Aug 2020 RMPP 3 blanked.jpg

Note statement of benefits does not include "excess DBCBS" paid as an "uncrystallised pension lump sum payment" after the revision process (checking pay details and pension payments correct) this can take 12 weeks.
Then I should receive, if correct around £7800 (excess DBCBS) minus tax on 75% of this amount at my tax rate, which I think will be 20% or around £1100.

[vmaxv4]

What happens to the DBCBS when the CDC scheme starts?

[RobertT]

What happens to the DBCBS when the CDC scheme starts?

No more payments will go in, but what's in your DBCBS pot will continue to provide a lump sum when taking your NRA60/65 benefits. I assume the aim will still be to add annual discretionary bonuses each year.

The plan is that CDC will have the Defined Benefit Lump Sum Scheme to provide the tax free cash. The DBLSS will be very similar to the DBCBS, in as much as it will provide a guaranteed lump sum of at least the sum total of the contributions going in, with the addition of bonuses each year if investment returns allow.

[stephen500]

What happens to the DBCBS when the CDC scheme starts?

No more payments will go in, but what's in your DBCBS pot will continue to provide a lump sum when taking your NRA60/65 benefits. I assume the aim will still be to add annual discretionary bonuses each year.

The plan is that CDC will have the Defined Benefit Lump Sum Scheme to provide the tax free cash. The DBLSS will be very similar to the DBCBS, in as much as it will provide a guaranteed lump sum of at least the sum total of the contributions going in, with the addition of bonuses each year if investment returns allow.

For other people here. Will the DBCBS which is currently part of my section B or section F for some remain as it is and be totally seperate from the new CDC scheme? Ie they won't take the money already in the DBCBS and place it in the lump sum for the new CDC scheme?

[RobertT]

I can only really repeat what I've already said above!

The DBCBS is part of the RMPP and is there to provide a lump sum when taking your NRA60/65 benefits.

The CDC scheme will be totally separate and will have it's own lump sum scheme to provide the tax free cash, called the Defined Benefit Lump Sum Scheme.

The DBCBS will NOT be transferred over to CDC/DBLSS!

For more info see the CDC Q&A's here: https://www.myroyalmail.com/2018pensionreviewqanda" onclick="window.open(this.href);return false;

[vmaxv4]

Thanks Robert
It has been established by the figures that @Stephen500 has supplied that taking the DBCBS early that it has only been reduced by a smaller than thought amount.
My question is based on the premise above If/what benefit would it be to take my NRA65 before the CDC scheme is in motion.
I’m already in receipt of my NRA60 and appalled at the thought of my benefits being further reduced (67) as I plan to retire at 65 on 05/04/2025 (COPA Free).

[RobertT]

Thanks Robert
It has been established by the figures that @Stephen500 has supplied that taking the DBCBS early that it has only been reduced by a smaller than thought amount.
My question is based on the premise above If/what benefit would it be to take my NRA65 before the CDC scheme is in motion.
I’m already in receipt of my NRA60 and appalled at the thought of my benefits being further reduced (67) as I plan to retire at 65 on 05/04/2025 (COPA Free).

There would be no benefit in specifically taking your NRA65 benefits before CDC comes in, because CDC will be completely separate from the current RMPP.

Benefits in NRA60, NRA65 and DBCBS will not be affected by the introduction of CDC!

The NRA of 67 will only apply to the pension you accrue in the CDC scheme, so you'll have the choice of taking that early but with a reduction, or waiting until 67 with no reduction.

We don't yet know how much that reduction is likely to be, but 5% per year is probably as good a guess as any.

As the DBLSS will be very similar to the DBCBS, I assume that any early payment reduction for that will also be similar, ie smaller than 5% per year.