Is 25% of DBCBS Tax Free

[Hawkey99]

If you take the maximum lump sum of 25% of your NRA 65 pension with both RMPP and RMSPS can you also get 25% of your DBCBS as tax free as well.

Thanks

[RobertT]

I believe you can, but the idea of the DBCBS is basically the same as AVC's – it's used to fund the tax free cash, meaning a bigger tax free lump sum and a higher pension for life.

[stephen500]

If you are section B.
You can for RMSPS reduce your pension by 15% and take 25% max tax free lump sum.
RMPP you have several options, but the best (in my opinion) is to take pension with Min lump sum and have some of your DBCBS make up your lump sum to what would have been around your max lump sum and have the rest of the DBCBS as a seperate payment entitled an "excess DBCBS ", that can be taken 25% tax free and 75% is taxable at your tax rate.
If you over pay tax you can claim it back.
If you are section C, you can reduce your annual pension and take up to 25% max lump sum and then take your DBCBS with 25% of that being tax free and 75% taxed.
Examples below from mine. This is section B.

RMPP pension with DBCBS 4.jpg

RMPP pension with DBCBS 1.jpg

RMPP pension with DBCBS 2.jpg

[stephen500]

RMPP pension with DBCBS 3.jpg

[stephen500]

I believe you can, but the idea of the DBCBS is basically the same as AVC's – it's used to fund the tax free cash, meaning a bigger tax free lump sum and a higher pension for life.

But the excess DBCBS if you take option 2A is known as an Uncrystallised fund and 25% of that is tax free and as you know 75% is taxable at the tax rate applicable for that person.

[RobertT]

I believe you can, but the idea of the DBCBS is basically the same as AVC's – it's used to fund the tax free cash, meaning a bigger tax free lump sum and a higher pension for life.

But the excess DBCBS if you take option 2A is known as an Uncrystallised fund and 25% of that is tax free and as you know 75% is taxable at the tax rate applicable for that person.