Pension Mess

[freespeech]

So, like many of you, I have received my annual statement from Capita. Purely by coincidence I have also received figures through from both Capita and RM for a request for drawing my pension at 55. The issue is that I cannot reconcile the requests to the statement even though they are dated days apart.......furthermore neither of them include any info on the cash balance fund other than to say that I needed to commit to taking my pension before this is calculated!!!. I didn't expect my AVC's to be included but I did expect the CB.

How the hell can we make informed decisions about a major life event (i'm considering leaving the business) when the detail available is so poor.

[RobertT]

In previous years, the annual statement date was always 31st March, the RMSPS one this year is 1st April for some reason.
The quotes for taking your pensions from RMSPS and RMPP are presumably dated September/October?

I agree that it's a complete mess, and can't really see why rough DBCBS and AVC's figures can't be included in the initial quotes to at least give a reasonable idea of how much to expect.
Although with a bit of maths and perhaps some help from this forum, I don't think it's too difficult to calculate ballpark figures yourself.

[vmaxv4]

This is probably one of the reasons it’s a complete mess.. Check-Out the confusion below.Oh we ain’t finished yet!!

[stephen500]

This is probably one of the reasons it’s a complete mess.. Check-Out the confusion below.Oh we ain’t finished yet!!

And introducing...our brand new CDC scheme...

cdc 1.jpg

cdc 2.jpg

[RobertT]

Introducing it......?????
That document was released 2.5 years ago and was voted on by the CWU membership!

Nothing new there!

[freespeech]

..........to be fair my figures are better than I expected but my concern is that I really can't reconcile them back to anything I have previously worked out. The killer paragraph on my estimate letter is this "If you choose to take benefits at this time, once your correctly completed application has been received and processed you will receive details of your benefits including any defined benefit cash balance fund and your AVC fund". So, at present, it's a bit of a guess. As I am going for max lump sum there is no way I can tell how that will impact the final pension - I only know it will be more than the figure in the quote with the max pension (because some of the AVC and CB will fund the LS).

So the above is a best guess........but I have to decide on that with no recourse because the return confirmations advises "if you choose to apply for some or all of your benefits this decision is irrevocable".

[Wednesday]

So I take my 60 pension in 15 months.can I work out my 25% tax free lump sum from the figures I have?

[RobertT]

So I take my 60 pension in 15 months.can I work out my 25% tax free lump sum from the figures I have?

Yes, you should be able to to work out fairly accurate ballpark figures. But they won't be 100%.

[freespeech]

So I take my 60 pension in 15 months.can I work out my 25% tax free lump sum from the figures I have?

NRA60 will give you the higher LS assuming you have a few years service........the RMSPS part of that will be the bigger sum.

[stephen500]

Introducing it......?????
That document was released 2.5 years ago and was voted on by the CWU membership!

Nothing new there!

It was an attempt at humour and a hint of sarcasm aimed at Royal Mail and their myriad of pension schemes..

[stephen500]

..........to be fair my figures are better than I expected but my concern is that I really can't reconcile them back to anything I have previously worked out. The killer paragraph on my estimate letter is this "If you choose to take benefits at this time, once your correctly completed application has been received and processed you will receive details of your benefits including any defined benefit cash balance fund and your AVC fund". So, at present, it's a bit of a guess. As I am going for max lump sum there is no way I can tell how that will impact the final pension - I only know it will be more than the figure in the quote with the max pension (because some of the AVC and CB will fund the LS).

So the above is a best guess........but I have to decide on that with no recourse because the return confirmations advises "if you choose to apply for some or all of your benefits this decision is irrevocable".

Mine, but it is section B . 27 years FS £28,000 pensionable pay, but they may have used less? Now £30,000 pensionable pay.
10 years CSDB and DBCBS 2018 to Nov 2020.
I choose option 2 for RMSPS and option 2A RMPP.
Section C can have different options.

pen 3.jpg

pen 4.jpg

RMPP pension with DBCBS 4.jpg

[freespeech]

In previous years, the annual statement date was always 31st March, the RMSPS one this year is 1st April for some reason.
The quotes for taking your pensions from RMSPS and RMPP are presumably dated September/October?

I agree that it's a complete mess, and can't really see why rough DBCBS and AVC's figures can't be included in the initial quotes to at least give a reasonable idea of how much to expect.
Although with a bit of maths and perhaps some help from this forum, I don't think it's too difficult to calculate ballpark figures yourself.

So, the actual figures I have had for taking all my pension at 55 is either a pension of £21,497 and no LS or a pension of £17,178 with a LS of £103,869. These are actuarily reduced figures and NOT derived from this years pension statements. This doesn't include my AVC's (which total around £9k) nor my cash balance fund which was £11k last year so I am expecting it to be £22k on this years statement and approx £29k up to October. So my question is, with this £38k (£9k AVC's and £29k CB fund) how much of it could fund the max LS of £103K? My own workings suggest that if it is around £23k (ie reduced due to early retirement) then that would reduce the LS needed from the two schemes to £80k and increase my pension to around £18,170.

[freespeech]

To give some more detail of why I can't reconcile things......I have had my pension estimates (aged 55) from both RMSPS and RMPP but only my annual statement from RMSPS. If I look at my NRA60 on the annual statement I get a figure (inc supplement) of £17437. If I reduce this by 25% for taking it five years early that reduces to £13077. However, my early pension estimate gives £14,459. The figures look too good to be true......

[stephen500]

In previous years, the annual statement date was always 31st March, the RMSPS one this year is 1st April for some reason.
The quotes for taking your pensions from RMSPS and RMPP are presumably dated September/October?

I agree that it's a complete mess, and can't really see why rough DBCBS and AVC's figures can't be included in the initial quotes to at least give a reasonable idea of how much to expect.
Although with a bit of maths and perhaps some help from this forum, I don't think it's too difficult to calculate ballpark figures yourself.

So, the actual figures I have had for taking all my pension at 55 is either a pension of £21,497 and no LS or a pension of £17,178 with a LS of £103,869. These are actuarily reduced figures and NOT derived from this years pension statements. This doesn't include my AVC's (which total around £9k) nor my cash balance fund which was £11k last year so I am expecting it to be £22k on this years statement and approx £29k up to October. So my question is, with this £38k (£9k AVC's and £29k CB fund) how much of it could fund the max LS of £103K? My own workings suggest that if it is around £23k (ie reduced due to early retirement) then that would reduce the LS needed from the two schemes to £80k and increase my pension to around £18,170.

Wow, are you a manager! I thought I had a good pension and I can't get any where near that! Good luck to you.
I am taking mine at 59 years and 10 months. (2 months early NRA 60 and 5 years 2 months early NRA 65)
For NRA 65 if you choose option 2A (RMPP) then you can get your annual pension without reduction and just pay tax on 75% of the excess DBCBS.
As for NRA60/65 (RMSPS) you can choose to to lose around 15% to get a max 25 % lump sum or any percentage in between,
Use my slides above of my actual pension quotes (my pensionable pay is £29000 with 27 years FS, 10 years CSDB and 2 years 8 months DBCBS) PHG reserved rights, fully pensionable night allowance.
You should be easily able to work out your DBCBS (it is on page 2 of your RMPP statement for this year)
It will at least run to April 2021. So thats 19.6% of your pensionable pay times 3 years.
I used to think I would lose 25% of DBCBS for taking it early, but I appear to have only lost around 8% for taking it 5 years and 2 months early.
It's hard to calculate how they work it out. But if you look at what would have been your max lump sum (nra 65 rmpp) Then for option 2A take your min lump sum and take from your DBCBS enough money to take you up to your old max Lump sum. What you have left of the DBCBS is your excess DBCBS and that is taxed at your tax rate on 75% of that fund, with 25% being tax free. (My quote with my original tax free DBCBS added to the standard Lump sum was just a little more than the orignial max Lump sum, but not much more).

[stephen500]

To give some more detail of why I can't reconcile things......I have had my pension estimates (aged 55) from both RMSPS and RMPP but only my annual statement from RMSPS. If I look at my NRA60 on the annual statement I get a figure (inc supplement) of £17437. If I reduce this by 25% for taking it five years early that reduces to £13077. However, my early pension estimate gives £14,459. The figures look too good to be true......

Don't forget that some of your pension is moved from RMPP to RMSPS.
That's why my RMSPS pension quote was far better than the orignal old style illustration and my NRA 65 RMPP much less.