AVC Alignment

[freespeech]

I was originally thinking of taking both NRA60 and 65 at 55 but I am now considering what NRA60 in isolation would look like. Can anyone confirm what AVC's are aligned to NRA60 please? I have both Bonusplan and Flexiplan and VR may also be a possibility so I could move some of that into Flexiplan too. I think I am right in saying the cash balance fund is NRA65 only?

My aim is to maximise the lump sum but use the AVC's and CB fund to fund the LS so maintaining the pension. I'm trying to establish whether this can be done better by drawing NRA 60 and 65 at the same time or whether I can effectively fund the LS from NRA60 only with the AVC's and cash balance. I'm in Section C.

Hope this makes sense.

[RobertT]

In theory you could move some of a VR payment into your Flexiplan, but as AVC payments must be paid via payroll, you would have to arrange payment on the exact week you receive it, as I assume you can't pay it in after you've left the company.

The RMPP is responsible for paying benefits relating to our post 2012 service – basically the 6 years from 2012-2018. Plus those RMSPS(pre 2012) benefits that continue to increase after 2012.
So in practice some of the Cash Balance(DBCBS) is paid out with NRA60, but the majority will be with NRA65.

When taking your NRA60, they will multiply by 20 and add on the AVC's, plus a some DBCBS to get your NRA60 pot value. For example(random figures):

NRA60 section C pension = £6k(inc. supplement) x 20 + £1k DBCBS + £40k AVC's = pot value of £161k

You can take 25% as tax free cash, with the remainder either being taken as a taxable lump sum, or deferred to take with your NRA65.
In the above example, the maximum lump sum would be £40,250, meaning an excess AVC amount of £750.

It's not really a case of Flexiplan being payable with NRA60 and Bonusplan with NRA65, or vice versa. It's more a case of you can take a maximum of 25% of pot value as a tax free lump sum, which can be made up of both, depending on the amounts involved.

*It's also possible to defer taking AVC's after taking your NRA65 and take the money independently. Although whether that's advantageous, particularly from a tax point of view, will depend on individual circumstances.

I've looked into various scenarios of taking benefits at different ages and have come to the conclusion that taking my main benefits at NRA, with just 25% tax free cash at 60 and deferring my excess AVC's until 65 plus the majority of the DBCBS, being the best option overall.

But what's right for one person isn't always right for another.

[freespeech]

In theory you could move some of a VR payment into your Flexiplan, but as AVC payments must be paid via payroll, you would have to arrange payment on the exact week you receive it, as I assume you can't pay it in after you've left the company.

The RMPP is responsible for paying benefits relating to our post 2012 service – basically the 6 years from 2012-2018. Plus those RMSPS(pre 2012) benefits that continue to increase after 2012.
So in practice some of the Cash Balance(DBCBS) is paid out with NRA60, but the majority will be with NRA65.

When taking your NRA60, they will multiply by 20 and add on the AVC's, plus a some DBCBS to get your NRA60 pot value. For example(random figures):

NRA60 section C pension = £6k(inc. supplement) x 20 + £1k DBCBS + £40k AVC's = pot value of £161k

You can take 25% as tax free cash, with the remainder either being taken as a taxable lump sum, or deferred to take with your NRA65.
In the above example, the maximum lump sum would be £40,250, meaning an excess AVC amount of £750.

It's not really a case of Flexiplan being payable with NRA60 and Bonusplan with NRA65, or vice versa. It's more a case of you can take a maximum of 25% of pot value as a tax free lump sum, which can be made up of both, depending on the amounts involved.

*It's also possible to defer taking AVC's after taking your NRA65 and take the money independently. Although whether that's advantageous, particularly from a tax point of view, will depend on individual circumstances.

I've looked into various scenarios of taking benefits at different ages and have come to the conclusion that taking my main benefits at NRA, with just 25% tax free cash at 60 and deferring my excess AVC's until 65 plus the majority of the DBCBS, being the best option overall.

But what's right for one person isn't always right for another.

Many thanks Robert.......I understand from payroll that you can email pensions when you sign on the dotted line for VR so that they know to pay some of your redundancy into flexiplan when paying the redundancy. The caveat is that they need to know before that weeks/months cutoff. Also if you want to transfer more than £30k it gets a little more complicated. That said, with £30k tax and NI free I doubt there are many people that will have more than a £60k payoff.

[freespeech]

In theory you could move some of a VR payment into your Flexiplan, but as AVC payments must be paid via payroll, you would have to arrange payment on the exact week you receive it, as I assume you can't pay it in after you've left the company.

The RMPP is responsible for paying benefits relating to our post 2012 service – basically the 6 years from 2012-2018. Plus those RMSPS(pre 2012) benefits that continue to increase after 2012.
So in practice some of the Cash Balance(DBCBS) is paid out with NRA60, but the majority will be with NRA65.

When taking your NRA60, they will multiply by 20 and add on the AVC's, plus a some DBCBS to get your NRA60 pot value. For example(random figures):

NRA60 section C pension = £6k(inc. supplement) x 20 + £1k DBCBS + £40k AVC's = pot value of £161k

You can take 25% as tax free cash, with the remainder either being taken as a taxable lump sum, or deferred to take with your NRA65.
In the above example, the maximum lump sum would be £40,250, meaning an excess AVC amount of £750.

It's not really a case of Flexiplan being payable with NRA60 and Bonusplan with NRA65, or vice versa. It's more a case of you can take a maximum of 25% of pot value as a tax free lump sum, which can be made up of both, depending on the amounts involved.

*It's also possible to defer taking AVC's after taking your NRA65 and take the money independently. Although whether that's advantageous, particularly from a tax point of view, will depend on individual circumstances.

I've looked into various scenarios of taking benefits at different ages and have come to the conclusion that taking my main benefits at NRA, with just 25% tax free cash at 60 and deferring my excess AVC's until 65 plus the majority of the DBCBS, being the best option overall.

But what's right for one person isn't always right for another.

Also, in terms of multiplying by 20.......is that my NRA60 value as is or NRA60 less 25% for taking at 55?