Excess DBCBS and pension reconciliation - 12 weeks

[stephen500]

For section B and possibly section C members.
Once you receive your intial lumps sums, if you are due an Excess Defined benefit cash balance scheme lump sum (DBCBS) that will be paid up to around 12 weeks after your intial lump sums. This is called a reconciliation period, where they check your pensionable pay with RM HR wages and see that you have received the correct amount due.
I received my intial lump sums on the 2nd Nov 2020 and my 12 weeks was due on the 25th Jan 2021, but I will be paid within 7 days from 13th Jan 21.
So within expectation date.
I received my reconciliation letter today, dated 13th Jan 21 and now RMPP have received my final pay figures and my NRA 60 & 65 (although in my case, just NRA 65, as NRA 60 has been paid by RMSPS) benefits have been revised.
My NRA 65 yearly pension remains the same and has not changed! (£1751.82 per annum) (neither has my NRA 60 yearly pension or LS changed)
However my DBCBS provisional fund value has been added to.
It was £13776.81 and has now been revised upwards to £15489.66, an extra £1712.85
£5911.44 has already been paid with my 25% tax free allowance (NRA 65)
---------------------------------------------------------------------
Tax free lump sum (min) £5767.35 RMPP
Tax free DBCBS £5911.44 (paid with intial lump sum on 2nd Nov 21) RMPP
Total intial tax free lump sums from RMPP (NRA 65) £11678.79
----------------------------------------------------------------------
So DBCBS final figure £15489.66
minus £5911.44 already paid.
Due £9578.22 as excess DBCBS, original provisional amount £7865.37
-------------------------------------------------------------------------------------
25% tax free £2394.56
75% taxable under PAYE £7183.66 at my tax rate, which as I have a tax code with RMPP BR cum, should be 20%
Which means I am expecting after tax £8141, when with their original estimate I was expecting £6685, meaning I am better off by £1456 in my hand
Taking my pensions to £11800 per annum
-----------------------------------------------------------------------------------
27 years final salary, PHG, fully pensionable night allowance (reserved rights)
10 years CSDB
2 years 7 months DBCBS.
-------------------------------------------------------------------------------------
Lump sums RMSPS £67000
Lump sum RMPP incl intial DBCBS (tax free element) £11678.79
Excess DBCBS (UFPLS) 25% tax free and 75% taxable: (£9578.22 Gross, £2394.56 tax free) Net £8144.
Total cash £87,132.
So once you have received your pension, it may get a pleasant surprise and have your excess DBCBS uprated. Of course it could go down.
But I spoke to RMPP and a nice man there told me, he has never known it go down.

final DBCBS RMPP 13 1 2021.jpg

[onejontwo]

For section B and possibly section C members.
Once you receive your intial lumps sums, if you are due an Excess Defined benefit cash balance scheme lump sum (DBCBS) that will be paid up to around 12 weeks after your intial lump sums. This is called a reconciliation period, where they check your pensionable pay with RM HR wages and see that you have received the correct amount due.
I received my intial lump sums on the 2nd Nov 2020 and my 12 weeks was due on the 25th Jan 2021, but I will be paid within 7 days from 13th Jan 21.
So within expectation date.
I received my reconciliation letter today, dated 13th Jan 21 and now RMPP have received my final pay figures and my NRA 60 & 65 (although in my case, just NRA 65, as NRA 60 has been paid by RMSPS) benefits have been revised.
My NRA 65 yearly pension remains the same and has not changed! (£1751.82 per annum) (neither has my NRA 60 yearly pension or LS changed)
However my DBCBS provisional fund value has been added to.
It was £13776.81 and has now been revised upwards to £15489.66, an extra £1712.85
£5911.44 has already been paid with my 25% tax free allowance (NRA 65)
---------------------------------------------------------------------
Tax free lump sum (min) £5767.35 RMPP
Tax free DBCBS £5911.44 (paid with intial lump sum on 2nd Nov 21) RMPP
Total intial tax free lump sums from RMPP (NRA 65) £11678.79


----------------------------------------------------------------------
So DBCBS final figure £15489.66
minus £5911.44 already paid.
Due £9578.22 as excess DBCBS, original provisional amount £7865.37
-------------------------------------------------------------------------------------
25% tax free £2394.56
75% taxable under PAYE £7183.66 at my tax rate, which as I have a tax code with RMPP BR cum, should be 20%
Which means I am expecting after tax £8141, when with their original estimate I was expecting £6685, meaning I am better off by £1456 in my hand
Taking my pensions to £11800 per annum
-----------------------------------------------------------------------------------
27 years final salary, PHG, fully pensionable night allowance (reserved rights)
10 years CSDB
2 years 7 months DBCBS.
-------------------------------------------------------------------------------------
Lump sums RMSPS £67000
Lump sum RMPP incl intial DBCBS (tax free element) £11678.79
Excess DBCBS (UFPLS) 25% tax free and 75% taxable: (£9578.22 Gross, £2394.56 tax free) Net £8144.
Total cash £87,132.
So once you have received your pension, it may get a pleasant surprise and have your excess DBCBS uprated. Of course it could go down.
But I spoke to RMPP and a nice man there told me, he has never known it go down.
final DBCBS RMPP 13 1 2021.jpg

Wow you sure understand your numbers! I am due to retire after almost 14 years on Saturday 16/01/2021, I have a rough idea of the numbers and the delay in actually receiving your pension , but hopefully I can come on here and get some guidance from you knowledgeable people when it comes to the form filling applications.

[stephen500]

I can confirm that I have paid only 20% on the taxable portion (75%) of my excess Cash balance (DBCBS).
You may find it helps you to pay 20% on that too, if you have HMRC attach if possible a BR Cum tax code to your RMPP pension, if part way through the tax year when you retire.
I am not sure what happens, if you have a normal tax code against that pension.
I can only say what has happened to me.

[RobertT]

I'm no expert on tax codes but my understanding is:

BR means Basic Rate. It basically means you've already used up your personal tax allowance, so all income is taxed at 20% until the end of the current tax year.

Higher rate tax should only be paid on income over £50k.

CUM is short for cumulative. When a tax code is cumulative, the monthly tax calculation will take in to account taxable pay and tax paid year to date in order to determine the tax due in that period. That means that any overpayments and underpayments from previous pay periods can be corrected in real-time via the payroll.

Stephen, I would expect your tax code to change from the new tax year in April to L or NT.

https://www.lovemoney.com/guides/15060/ ... for-202021

[stephen500]

I'm no expert on tax codes but my understanding is:

BR means Basic Rate. It basically means you've already used up your personal tax allowance, so all income is taxed at 20% until the end of the current tax year.
[Well that is and isn't quite true, what happened to me is I had my tax codes adjusted part year and for my RMSPS, that became my main income, switched from RM, (which for my last payment of overtime became BR), and they gave me a tax code of 1128L (before this tax code was issued I paid £168.20 tax for two months Nov and Dec 2021, for January 2021 my pension pay advice has just advised me that I will pay no tax) My PAYE was near enough up to date with RM with a couple of little adjustments. But HMRC told me they could not spilt a tax code three ways, so they gave a code for RMPP of BR (basic rate 20%, as you say) CUM (which can be adjusted as you say in real time)


Higher rate tax should only be paid on income over £50k.

(Why I found it important to have a tax code issued, in this case it was BR Cum for RMPP was that HMRC told me that without a cum tax code, they may take tax on the 75% of the UFLS by taking away the weekly tax allowance and then taxing it as week 1 resulting in a much higher temporary tax bill. But as I was issued with BR Cum that meant it would be taxed at 20% only)

CUM is short for cumulative. When a tax code is cumulative, the monthly tax calculation will take in to account taxable pay and tax paid year to date in order to determine the tax due in that period. That means that any overpayments and underpayments from previous pay periods can be corrected in real-time via the payroll.

Stephen, I would expect your tax code to change from the new tax year in April to L or NT.

(HMRC told me to ring them around the start of the new tax year. Overall after adjustments for underpayment of tax, which will be corrected by PAYE before the end of this tax year, my personal allowances will revert to £12500 and they will spilt the tax codes between the two pensions, RMSPS and RMPP.
I would expect to have two codes to cover my gross pension of £841.41 x 12 and RMPP a code to cover £145.99 x12, I am guessing I should ring them towards the end of March 2021)

https://www.lovemoney.com/guides/15060/ ... for-202021

[RobertT]

As your total income from the new tax year will be below the personal tax allowance, and assuming no other income, the NT code would seem appropriate?

NT = No Tax.

Or the usual L code?

As I say, I'm no expert.

[stephen500]

As your total income from the new tax year will be below the personal tax allowance, and assuming no other income, the NT code would seem appropriate?

NT = No Tax.

Or the usual L code?

As I say, I'm no expert.

Thanks, neither am I, I just thought I would share what I know about the tax codes they gave me and why.

[stephen500]

As your total income from the new tax year will be below the personal tax allowance, and assuming no other income, the NT code would seem appropriate?

NT = No Tax.

Or the usual L code?

As I say, I'm no expert.

Thanks, neither am I, I just thought I would share what I know about the tax codes they gave me and why.