NRA 65......Be careful

[Hawkey99]

So this is what I think the final plan is

Take maximum NRA 65 Approx £4000
Take AVC Bonus plan all tax free £2000
Take DBCBS all tax free approx £15,000 (approx)

This leave my Flexiplan which I believe I can either leave in place or move to another provider.

Then join the RMDC Scheme to continue utilising tax allowances until I retire which should be 2-3 years.

Sounds like a plan........

Are you taking your NRA65 early and factoring in the early payment reductions?
These figures include the reduction

Have you included the supplement in your 'pot value' calculations?
I haven't included them as they are not part of the quotation as I still work for Royal Mail

How does what you propose compare to taking your benefits at NRA?
It is 30% less but if invested correctly will be more beneficial to me in the short term..Who knows what tomorrow brings ?

Is it more tax efficient to take the Flexiplan with your NRA65 or transfer out?
It would be more efficient to transfer out as now I would like have to pay some of it at higher tax rate.

Have you factored in the CDC scheme and the fact that we'll all be enrolled into that, with existing schemes closing. Bearing in mind there are no definite timescales to CDC implementation.

I still want to pay into a pension scheme either the new one of the RMDC scheme...


Does all that make sense ?

Many thanks for your help as always.....You should send us all bills...lol

[RobertT]

So this is what I think the final plan is

Take maximum NRA 65 Approx £4000
Take AVC Bonus plan all tax free £2000
Take DBCBS all tax free approx £15,000 (approx)

This leave my Flexiplan which I believe I can either leave in place or move to another provider.

Then join the RMDC Scheme to continue utilising tax allowances until I retire which should be 2-3 years.

Sounds like a plan........

Are you taking your NRA65 early and factoring in the early payment reductions?
These figures include the reduction

Have you included the supplement in your 'pot value' calculations?
I haven't included them as they are not part of the quotation as I still work for Royal Mail

How does what you propose compare to taking your benefits at NRA?
It is 30% less but if invested correctly will be more beneficial to me in the short term..Who knows what tomorrow brings ?

Is it more tax efficient to take the Flexiplan with your NRA65 or transfer out?
It would be more efficient to transfer out as now I would like have to pay some of it at higher tax rate.

Have you factored in the CDC scheme and the fact that we'll all be enrolled into that, with existing schemes closing. Bearing in mind there are no definite timescales to CDC implementation.

I still want to pay into a pension scheme either the new one of the RMDC scheme...

Does all that make sense ?

Many thanks for your help as always.....You should send us all bills...lol

Without knowing any exact details of your circumstances, etc nobody can really tell you what's right or wrong, so I was just encouraging you to touch all bases and factor in all the pros and cons of the options you have available.

[Hawkey99]

Really appreciate that Robert and hope my answers made sense.

Interestingly I have just read that you cannot transfer your DBCBS to another provider.....

[rambo1]

I wonder what % of your NRA 65 Capita hold in the RMSPS....

Any thoughts ???

2 of the 8 CSDB blocks you accrued from 2010 to 2018 are proper to RMSPS so it should be about 25% of the total. The RMPP have given you their part which should therefore be about 75% of the total. Your last annual illustration will not have split this part of the pension into RMSPS or RMPP and has just given you a combined amount. When you get both estimates then the combined amounts without LS should now be worth about £3.9K per year with another years increase.
Use all of your DBCBS which will probably be worth about £14K for your LS so as not to reduce your annual pension. If you take all of your LS from your pension you will not only get a much lower annual pension but also have to pay tax on your excess DBCBS when you get it.

FS ended 31st march 2008 and CSDB started from 1st Apr 2008 , and RMSPS are responsible up to 2012. So unless 2 blocks have vanished, 4 blocks must be handled by RMSPS and that would be 40% of the CSDB blocks.
"CSDB service blocks 1 April 2008 to 31st March 2019" 10 blocks (illustration 2019)
The figures below won't tally perfectly, but there is no way only 20% of my CSDB has been transferred to RMSPS, it is too big a hit of my NRA65 RMPP.
I have no idea how it worked out, but to me around 40% of my CSDB was transferred to my RMSPS from my illustration.
The 2019 illustration showed my CSDB pension at £3748 if I take 40% away for transferring to RMSPS that leaves £2248, if I then deduct 26% for taking it 5 years and 2 months early, it reduces to £1664 (it actually showns up on my final figures as £1751. So my NRA 65 (RMPP) is £1758 around 53% lower.
Yet although my NRA 60 showed in the illustration as £9675 (with 1% deduction for 2 months early) My quote was £11,211 (16% higher than my illustration figure) and min Lump of £33, 770 set against £29000 in the illustration. I can only presume this is because this includes some of my pension transferred from the CSDB blocks? and to add to that another £600 annual pension was also transferred with another £3463 lump sum. So my NRA 60 was £1536 a year more than expected and I also had £600 from my NRA65 transferred from RMPP? £1536 + £600 = £2136 more than I was expecting from the illustration. Whilst my NRA 65 RMPP was £1758 set against £2876 on illustration = minus £1118. I don't know for sure how it ended up like this, but I am of the opinion that 4 CSDB blocks (40%) have been transferred to RMSPS 2008 to 2012, leaving 2012 to 2018 with RMPP ie 6 years or 60% of the CSDB. It's the only way I can work it out.
I have had my final figures. And £1751 per year divided by 6 = £291 which sounds about right for each yearly CSDB block. It did my head in, trying to get my head around it and many think, they may be right that just two blocks are transferred, but FS ended in 2008 with CSDB starting from then and RMSPS being responsible up to 2012. See what I mean, when I say my head hurts.

Jeez I think Richard has some competition on the pension advice! Why oh why does it have to be sooooo complicated?

[rambo1]

I wonder what % of your NRA 65 Capita hold in the RMSPS....

Any thoughts ???

2 of the 8 CSDB blocks you accrued from 2010 to 2018 are proper to RMSPS so it should be about 25% of the total. The RMPP have given you their part which should therefore be about 75% of the total. Your last annual illustration will not have split this part of the pension into RMSPS or RMPP and has just given you a combined amount. When you get both estimates then the combined amounts without LS should now be worth about £3.9K per year with another years increase.
Use all of your DBCBS which will probably be worth about £14K for your LS so as not to reduce your annual pension. If you take all of your LS from your pension you will not only get a much lower annual pension but also have to pay tax on your excess DBCBS when you get it.

FS ended 31st march 2008 and CSDB started from 1st Apr 2008 , and RMSPS are responsible up to 2012. So unless 2 blocks have vanished, 4 blocks must be handled by RMSPS and that would be 40% of the CSDB blocks.
"CSDB service blocks 1 April 2008 to 31st March 2019" 10 blocks (illustration 2019)
The figures below won't tally perfectly, but there is no way only 20% of my CSDB has been transferred to RMSPS, it is too big a hit of my NRA65 RMPP.
I have no idea how it worked out, but to me around 40% of my CSDB was transferred to my RMSPS from my illustration.
The 2019 illustration showed my CSDB pension at £3748 if I take 40% away for transferring to RMSPS that leaves £2248, if I then deduct 26% for taking it 5 years and 2 months early, it reduces to £1664 (it actually showns up on my final figures as £1751. So my NRA 65 (RMPP) is £1758 around 53% lower.
Yet although my NRA 60 showed in the illustration as £9675 (with 1% deduction for 2 months early) My quote was £11,211 (16% higher than my illustration figure) and min Lump of £33, 770 set against £29000 in the illustration. I can only presume this is because this includes some of my pension transferred from the CSDB blocks? and to add to that another £600 annual pension was also transferred with another £3463 lump sum. So my NRA 60 was £1536 a year more than expected and I also had £600 from my NRA65 transferred from RMPP? £1536 + £600 = £2136 more than I was expecting from the illustration. Whilst my NRA 65 RMPP was £1758 set against £2876 on illustration = minus £1118. I don't know for sure how it ended up like this, but I am of the opinion that 4 CSDB blocks (40%) have been transferred to RMSPS 2008 to 2012, leaving 2012 to 2018 with RMPP ie 6 years or 60% of the CSDB. It's the only way I can work it out.
I have had my final figures. And £1751 per year divided by 6 = £291 which sounds about right for each yearly CSDB block. It did my head in, trying to get my head around it and many think, they may be right that just two blocks are transferred, but FS ended in 2008 with CSDB starting from then and RMSPS being responsible up to 2012. See what I mean, when I say my head hurts.

Jeez I think Richard has some competition on the pension advice! Why oh why does it have to be sooooo complicated?

Sorry, Robert, don't know why my phone put Richard. Don't even know a Richard lol

[RobertT]

I've been called a lot worse.

[Hawkey99]

Received this from RMPP today.......

"The supplement unfortunately takes more of a hammering than the 5% (guide) and would be reduced currently to around £70-£80 from the £374.80. This isn’t just a simple reduction calculation.

The reason I said about using the AVC only with RMSPS is because we use the DBCBS fund first when running our calculations and then if any remaining scope we would use some of the AVC within RMPP. This depends on the value of the fund. When you do elect to take your benefits the first set would be based upon this

Your formula is sort of correct, but it is based upon the amount of your standard pension, but then a restriction is applied to how much AVC / DBCBS can be used (20 times pension divide by 3), then you can take 25%. If there was an excess DBCBS fund you have a choice depending on the amount for an annuity or an UFPLS (Uncrystallised Fund Pension Lump Sum) where 25% of the excess is tax free and the remaining 75% would be taxed."


So thought......

1 Im surprised my Pension supplement drops so much from £374 to £70-£80. My RMSPS NRA 65 Pension has been quoted as 3963 per month and a supplement of £139 per year.

2 How the hell can you decide what you want to do with your AVC money when you don't receive any information from RMPP what your DBCDC is worth?

3 I plan to take the max pension with my DBCBS and Bonus plan but transfer my Flexiplan to another provider...Sensible ?

Talk about complex.....

[fly-catchers]

My guess with the supplement being reduced so much is that a 5% reduced per year supplement would actually end up giving you quite a bit more money than if you had just taken it for the year or two you would normally have got from it. When the RMPP website still had its pension calculator it showed a 25% reduction on the NRA65 pension taken 5 years early. But the supplement went from about £500 to £78 per year.

[david1456uk]

Some really good advice on this thread .I would like to thank those that spend quite a lot of time dealing with queries .

[Hawkey99]

Something else I was hoping Robert or someone could clarify.??....

Your DBCBS can only used with you RMPP part of your NRA 65 to contribute to your 25% tax free lump sum and not the RMSP part or certainly there is no mention of it on the paperwork.

Is that right or wrong please anyone. ?

[Hawkey99]

Also when calculating your tax free lump sum I assume they don't include this unless you are leaving the business ?

[RobertT]

Something else I was hoping Robert or someone could clarify.??....

Your DBCBS can only used with you RMPP part of your NRA 65 to contribute to your 25% tax free lump sum and not the RMSP part or certainly there is no mention of it on the paperwork.

Is that right or wrong please anyone. ?

Most of the DBCBS will be used to fund the tax free lump sum associated with RMPP(2012-2018) benefits.

However the plan guide states that it's also used to fund the benefits that 'continued to build up' after 2012. Which means the RMPP are responsible for paying inflationary increases on RMSPS(pre 2012) benefits.
I think it's a case of the government paying CPI increases and the RMPP making that up to RPI for section C members.

Therefore some DBCBS will also be paid out with your NRA60, as posters on this forum can testify.

If there's any left it will be paid as a UFPLS, meaning 25% of that excess will be tax free and the remainder being subject to your marginal tax rate.

Also when calculating your tax free lump sum I assume they don't include this unless you are leaving the business ?

Why do you assume that?

You can currently take all of your pension benefits, including the lump sum from the main scheme, DBCBS and AVC's anytime after age 55. That's applies regardless of your employment situation with RM.

[Hawkey99]

Sorry, Didn't write my sentence properly.

I meant too say when calculating the 25% lump sum I assume they do not include the pension supplement in this total unless you are leaving RM....

[RobertT]

Sorry, Didn't write my sentence properly.

I meant too say when calculating the 25% lump sum I assume they do not include the pension supplement in this total unless you are leaving RM....

When working out the pot value and therefore the maximum tax free lump sum, everything is included!

Pension x20 + supplement(section C) x20 + standard lump sum(sections A/B) + DBCBS + AVC's.

[Hawkey99]

I have received my NRA65 quote from both RMPP and RMSPP.

Neither one mentions a supplement which I guess they wouldn't as Im not quite leaving yet.

I assume this will be on the next quote which gives me the options as described by Stephen.....

Are you certain the supplement is included even if your not yet leaving Royal Mail Robert ?

Many thanks as always.......