Pension Mess

[freespeech]

Thanks for the info, I am pleased that your figures have not been reduced as much as you thought.

However, something doesn’t look right to me as I don’t see why the figures would deviate so much from the 25% reduction for nra 60.

I agree..I’ve read and reread the estimates to see whether they are definitely already actuarily reduced and that’s what they say. I even wondered whether they already include a degree of the cash balance fund but there is reference to that too as not being included. Where can I go from here? The only option seems to be tick the box and then get a 100% figure but then there is no turning back. It’s madness.

Might be worth just checking your NRA60 statement from last year and seeing what the reduction % based is on this figure?

That's the issue.....we haven't had NRA60 on a statement since 2016 and all my calculated figures were derived after that so could have always been wrong due to my situation.

[stephen500]

So, now in receipt of both statements and both estimates of retirement at 55 I have the following split....

My annual statements are 85% RMSPS and 15% RMPP for NRA60, my retirement estimates are exactly the same.

For NRA65 my annual statements are 77% RMPP and 23% RMSPS where as the retirement estimates are 74% RMPP and 26% RMSPS.

Overall then not much difference. What it has highlighted though is that in my particular circumstances the usual calculations shown on this board has underestimated my overall pot (at 55) by just over £2k. That is NOT intended as a criticism and more an observation if anyone else is reading this and is still in the same job family as they were within the final salary scheme and has also received promotional increases since then too.

Thankfully the error is in my favour.

What’s the % reduction on your NRA60 and NRA65 respectively for taking at 55? Does the old rule of taking of 25% for NRA60 and 50% for NRA65, still work out as an accurate guide.

Many thanks.

The estimates are for 55....the annual statements are at the usual NRA60 and NRA65........the usual 25% and 50% was too much in my case.

In comparing the reduced estimates to the yearly statement I have the following reductions......

NRA60......RMPP reduced by 12% and RMSPS reduced by 17% (expected 25%)

NRA65.....RMPP reduced by 42% and RMSPS reduced by 32% (expected 50%)

Overall my combined reductions were reduced by 31% in the RMPP and 18% in RMSPS.

Have you included any of the DBCBS in this reduction, as I found my reduction for taking that 5 years and 2 months early was only 8%. That could be where your reduction was not as much.?

[freespeech]

So, now in receipt of both statements and both estimates of retirement at 55 I have the following split....

My annual statements are 85% RMSPS and 15% RMPP for NRA60, my retirement estimates are exactly the same.

For NRA65 my annual statements are 77% RMPP and 23% RMSPS where as the retirement estimates are 74% RMPP and 26% RMSPS.

Overall then not much difference. What it has highlighted though is that in my particular circumstances the usual calculations shown on this board has underestimated my overall pot (at 55) by just over £2k. That is NOT intended as a criticism and more an observation if anyone else is reading this and is still in the same job family as they were within the final salary scheme and has also received promotional increases since then too.

Thankfully the error is in my favour.

What’s the % reduction on your NRA60 and NRA65 respectively for taking at 55? Does the old rule of taking of 25% for NRA60 and 50% for NRA65, still work out as an accurate guide.

Many thanks.

The estimates are for 55....the annual statements are at the usual NRA60 and NRA65........the usual 25% and 50% was too much in my case.

In comparing the reduced estimates to the yearly statement I have the following reductions......

NRA60......RMPP reduced by 12% and RMSPS reduced by 17% (expected 25%)

NRA65.....RMPP reduced by 42% and RMSPS reduced by 32% (expected 50%)

Overall my combined reductions were reduced by 31% in the RMPP and 18% in RMSPS.

Have you included any of the DBCBS in this reduction, as I found my reduction for taking that 5 years and 2 months early was only 8%. That could be where your reduction was not as much.?

There is no DBCBS calculation involved at all as that is in addition.......I have quotes from both schemes broken down into NRA60 and NRA65 and the same breakdown in the annual statements.

Having read the detail again the annual statements are up until March 2020 and the estimates are based on leaving in March 2021 so there is a full one year difference. Applying a 25% reduction to the NRA60 and a 50% reduction to NRA65 (ie both taken at 55) to my annual statements leaves me about £2500 below what the estimates are saying. I can't see how my pension will increase by this much in one year.

[rambo1]

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

That does look ridiculous on one page like that. No wonder most (younger) people don't even want to know about pensions. Why does it have to be this complicated.

[RobertT]

Up to 2008, RM pensions were relatively simple to understand. We had a final salary scheme and an NRA of 60.
But changes at that time, in 2010, 2012, 2014 and 2018 have made it what it is today – a complete mess!!!!!

Although at the same time. I think it's reasonable to say that most people don't really take that much notice of their pension provision until their 50's anyway. Meaning they have to take in a lot of information in one go.

With CDC not far away, I can't see things getting any easier to understand!

[stephen500]

I have had my RMSPS illustration and with my benefits actually due in Nov it is almost spot on.
I cannot comment re the RMPP as I still have not had an illustration and may not get one, as I am so near to taking it.
But when I compare last years illustrations to actual benefits due this Nov, it is confusing to me.
My NRA 60 (RMSPS) is much higher than my combined 2019 illustration.
My NRA 65 is much less, even allowing for moving some of it to RMSPS.
But overall, when allowing the the increase to my NRA 60 (RMSPS) and my reduction (RMPP) NRA65, they come out about right.
I have tried all kinds of formulas and ratios.
Joint Illustration 2019.
Final sal pension at 31st March 2019. £9773
Final Sal lump sum ditto £29319.
CSDB till 31st March 2018 revalued £3748
CSDB Tax free lump sum £11,242.
Cash bal DBCBS till 31st March £5724.
---------------------------------------
RMSPS illustration (sole scheme)
As of Apr 2020 new illustration.
Basic annual pension £8912.69
Pension increase amount £2279 (what is this? Is this inflation since 2012, because if it is, it is a big increase and certainly looks higher than inflation (does it include some DBCBS?))
Current value of annual pension £11,192.62 Which is £1419.62 higher than 2019
Basic lump sum £26738.06
Pension increase amount (standard lump sum) £6839.80 (how is this formulated?)
Current value of standard lump sum £33,577.86
NRA 65 (RMSPS) two blocks
Basic annual pension £628.27
Pension increase amount £140.73 (what is this?)
Current value of annual pension £769.00
Basic lump sum £1884.81
Pension increase amount (lump Sum) £422.19
Current value of standard lump sum £2307
--------------------
Now compare this to the actual benefits I am taking this Nov 2020.
I will pretend I am taking the standard lump sums for ease of comparasion.
Actual benefits due:
Full retirement pension £11218.58 (£1445 higher than my 2019 illustration £18.97 higher than my new RMSPS 2020 illustration)
Standard lump sum £33,770.89 (£4451 higher than the 2019 illustration £193 higher than my new RMSPS 2020 illustration)
NRA 65 RMPP
standard pension £1751.82 (my 2019 illustration was £3748, I still get confused as to how many blocks are transferred, whether it is 2 or 4) But I still think this appears even with the 26% reduction for 5 years 2 months early payment about £460 less than I expected)
Tax free lump sum Standard £5767.35
tax free DBCBS £5911.44
Total tax free lump sum £11678.79

---------------------
Excess DBCBS £7865.37
provisional DBCBS pot till Nov 2020 £13776.61
-----------------
I am not complaining, my overall pension is what I was expecting and my lump sum, so much more.
But I do find it hard to work out why my NRA60 is so much more (£1445 a year) (compared to my 2019 joint Illus) and my NRA 65 about £400 less for no apparent reason and the difference in lump sums, my NRA 60 being so much higher £4451?

[Jefferson Starfish]

You're not still forgetting about the NRA60 being up to 2010 and the NRA65 from 2010-2018 are you?

[stephen500]

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.

My cash balance quote as you say, was not included till I decided to take it.
However you can work that out 19.6% of pensionable pay per year and use ratios for part year.
I think I lost about 8% for taking 5 years and 2 months early (but I have not allowed for the 3.7% increase that we had.

[stephen500]

You're not still forgetting about the NRA60 being up to 2010 and the NRA65 from 2010-2018 are you?

I think I know more about pensions, than I ever did, with the help of Robert T.
But yes, it still confuses me.
You may be right.
But I still find it hard to work it all out.
Take my NRA 65 (RMPP)
Was £3748 in joint statement. 2019 illustration
Move two blocks to NRA 65 (RMSPS) ( edit -Yet I still get confused as to whether it is two or four blocks moved! They say if you have taken your NRA 60, your NRA 65 CSDB will be two blocks less and else where they also say, 4 blocks are in RMSPS?? It confuses the heck out of me!)
Leaves £2998 in NRA 65 (RMPP)
minus 26% for taking 5 years 2 months early
leaves £2218.
Actual pension due in payment in Nov 2020
£1751
£467 less?
But my NRA 60 is so much more? So overall my annual pension is what I was expecting and my lump sum so much more.

[freespeech]

You're not still forgetting about the NRA60 being up to 2010 and the NRA65 from 2010-2018 are you?

There is nothing to forget or calculate......I have an annual statement and a recent estimate and am comparing like for like.

[Jefferson Starfish]

You're not still forgetting about the NRA60 being up to 2010 and the NRA65 from 2010-2018 are you?

There is nothing to forget or calculate......I have an annual statement and a recent estimate and am comparing like for like.

I was replying to Stephen500.

[Hawkey99]

My wife left RM in 2018.

At that time they provided her with an estimate even though she was only 53.

The estimate showed

NRA 60 including supplement £3354.

NRA 65 including supplement £3364

She has now received the 2 statements and they say

NRA 60 including supplement £3409

NRA 65 including supplement £3025


So the NRA 60 has marginally increased but the NRA 65 has decreased. Is this possible?

Is this a mistake

[stephen500]

You're not still forgetting about the NRA60 being up to 2010 and the NRA65 from 2010-2018 are you?

There is nothing to forget or calculate......I have an annual statement and a recent estimate and am comparing like for like.

This is on reference to my post

[heapsy]

My wife left RM in 2018.

At that time they provided her with an estimate even though she was only 53.

The estimate showed

NRA 60 including supplement £3354.

NRA 65 including supplement £3364

She has now received the 2 statements and they say

NRA 60 including supplement £3409

NRA 65 including supplement £3025


So the NRA 60 has marginally increased but the NRA 65 has decreased. Is this possible?

Is this a mistake

Could the decrease be due to a correction in the figures, that is to say due to her no longer working for RM. When the tax man works out our tax, they make the assumption we will continue in work for the entire year. When we retire, there is an adjustment, as your pension kicks in and your wage stops. I remember a former work mate that this happened when he stopped work. Just a thought.

[RobertT]

My wife left RM in 2018.

At that time they provided her with an estimate even though she was only 53.

The estimate showed

NRA 60 including supplement £3354.

NRA 65 including supplement £3364

She has now received the 2 statements and they say

NRA 60 including supplement £3409

NRA 65 including supplement £3025


So the NRA 60 has marginally increased but the NRA 65 has decreased. Is this possible?

Is this a mistake

I've never seen a deferred RM pension statement so it's hard to say, but a few things spring to mind:

Are you reading it correctly?
Are there several figures to add together from 2 statements to get the total, as is the case with like current members statements? If so, are you including all the figures?
How does her 2019 statement compare?

I would normally expect it to increase with inflation, so if none of the above applies, it could be a mistake either in this year figures, or previous years.