Penion Supplement

Hawkey99 · Post by **Hawkey99** » 21 Oct 2020, 12:44

On my RMSPS NRA 65 benefit quote it has the same Supplement whether I take the lump sum or not..

Is this correct

RMSPS £963 per year plus £139 supplement

RMSPS £736 per year plus £4911 lump sum plus £139 supplement

Thanks

Post by **freespeech** » 21 Oct 2020, 13:04

Hawkey99 wrote:On my RMSPS NRA 65 benefit quote it has the same Supplement whether I take the lump sum or not..

Is this correct

RMSPS £963 per year plus £139 supplement

RMSPS £736 per year plus £4911 lump sum plus £139 supplement

Thanks

Yes, the only factor is whether you have left RM or not.

Hawkey99 · Post by **Hawkey99** » 21 Oct 2020, 14:13

Thanks,

Was aware of that but thought a lower pension if you take a lump sum might result in a lower supplement.

What is the supplement all about anyway.v??

Post by **RobertT** » 21 Oct 2020, 15:20

Hawkey99 wrote:What is the supplement all about anyway.v??

The pension supplement was worked out as:

1/60th of the Lower Earnings Deduction for each year of your pensionable service.

Hawkey99 · Post by **Hawkey99** » 21 Oct 2020, 20:06

Thanks Robert.

But why do we have a pension supplement at all ?

Post by **RobertT** » 22 Oct 2020, 07:08

Section C members have the LED taken away from their pay to work out their pensionable pay. So the supplement is just a way of increasing the amount of pension they get, albeit only to state pension age and only if they've left RM employment.

It's part of the rules of the scheme!

Bonusplan is also available to C members, which is a contribution of 4.5% gross of the LED. Presumably set up to initially help provide a lump sum for section C members, to prevent them having to give up some pension to get one?

Post by **stephen500** » 22 Oct 2020, 15:39

Hawkey99 wrote:Thanks,

Was aware of that but thought a lower pension if you take a lump sum might result in a lower supplement.

What is the supplement all about anyway.v??

I cannot believe that taking a lump sum (section C) won't result in a lower supplement??
How can that be?
I would have thought you have to give up some thing to get some thing?
However if true, I am happy for these members!

Post by **freespeech** » 22 Oct 2020, 16:57

stephen500 wrote:
Hawkey99 wrote:Thanks,

Was aware of that but thought a lower pension if you take a lump sum might result in a lower supplement.

What is the supplement all about anyway.v??
I cannot believe that taking a lump sum (section C) won't result in a lower supplement??
How can that be?
I would have thought you have to give up some thing to get some thing?
However if true, I am happy for these members!

You give up pension to get a larger lump sum. The supplement is unrelated.

Post by **tractorboy2** » 24 Oct 2020, 08:21

Then that would mean that the supplement wouldn't be included in a lump sum figure. So just annual pension plus pension increase amount ? Hope this is understandable.

Hawkey99 · Post by **Hawkey99** » 24 Oct 2020, 13:03

Pension Supplement is included if you have left RM or leave before reaching pension I believe...

Post by **stephen500** » 24 Oct 2020, 14:26

tractorboy2 wrote:Then that would mean that the supplement wouldn't be included in a lump sum figure. So just annual pension plus pension increase amount ? Hope this is understandable.

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It does appear the pension supplement can be used in totalling your pot and your lump sum, up to a max of 25%, but only seems to apply if you leave Royal Mail.
Do you have to leave just before your NRA?