Supplement & Lump Sum

[Hawkey99]

If you have left Royal Mail do they include your supplement when they work out your maximum lump sum...

e.g. Pension £3200 + lump sum £600= £3800 x 20 = £76,000

£76,000 divided by 4 = £19,000 lump sum ?

[tractorboy2]

If you have left Royal Mail do they include your supplement when they work out your maximum lump sum...

e.g. Pension £3200 + lump sum £600= £3800 x 20 = £76,000

£76,000 divided by 4 = £19,000 lump sum ?

No

[RobertT]

If you have left Royal Mail do they include your supplement when they work out your maximum lump sum...

e.g. Pension £3200 + supplement £600= £3800 x 20 = £76,000

£76,000 divided by 4 = £19,000 lump sum ?

According to the 'member guide to benefits' on the RMPP website, the supplement is included in the lump sum calculation. But the experience of some posters on this forum suggests it's not and the supplement is worked out separately.

You may also have the DBCBS and AVC's to factor in?

[NorthernBoy]

I am hoping the members guide is correct and I am basing my lump sum projection on the promise that the supplement is used to work out the lump sum.

For all those taking their pension early (say 55) remember to factor in the reduction in the tax free lump sum, you would otherwise get at 60. This may not alter your decision but I believe you need to be aware of it.

[heapsy]

I recently posted on here somewhere about this very subject. It was niggling at me, as I was also trying to do the maths, so I rang pensions and they told me that the supplement is separate, in other words, added later.

[tractorboy2]

The RMSPS option form clearly states that if you retire from work you will also receive a pension supplement of £xx per year till state pension age.
This figure is the same whether you take a lump sum or not.

[Jefferson Starfish]

The RMSPS option form clearly states that if you retire from work you will also receive a pension supplement of £xx per year till state pension age.
This figure is the same whether you take a lump sum or not.

The point of this thread though is that people want to plan ahead before they get to the option form stage. I'm guessing?

[heapsy]

The RMSPS option form clearly states that if you retire from work you will also receive a pension supplement of £xx per year till state pension age.
This figure is the same whether you take a lump sum or not.

You are right mate. The point I was making was that they do not include the supplement when calculating your lump sum. It is a separate thing, according to the bloke I spoke to at Sheffield.

[NWpostie]

You would be well building up a cash reserve to see you through the application process, as I'm doing so I won't become unstuck by money shortages.

[Hawkey99]

So the paperwork says it is but conversations and reality says it isn't.....

You couldn't make this up....lol...

Thank you to all contributors.....

[RobertT]

So the paperwork says it is but conversations and reality says it isn't.....

Basically, yes!

You couldn't make this up....lol...

Another example of the shambles that is RM pensions.

[Hawkey99]

Just got this email reply from Royal Mail pensions.....

"if the supplement is payable at the point of taking the benefits then it would be included in the Capital Value calculation. Therefore if you took your benefits on the same day or if you left employment then applied for the benefits the supplement would be included.

The Capital Value would be the total pension being crystallised (pen + supp) multiplied by 20, plus any lump sums (DBCBS fund)"

Hope this helps....

[RobertT]

I'm planning on leaving RM before I take any of my RMSPS/RMPP benefits, so I hope that is the case Hawkey99.

The fact that people are getting different answers to the same question, is worrying. Although I've found you have to be very specific when asking questions of the PSC, as they seem to always assume you're going to take benefits while still working, which obviously may not be the case.

[NorthernBoy]

Just got this email reply from Royal Mail pensions.....

"if the supplement is payable at the point of taking the benefits then it would be included in the Capital Value calculation. Therefore if you took your benefits on the same day or if you left employment then applied for the benefits the supplement would be included.

The Capital Value would be the total pension being crystallised (pen + supp) multiplied by 20, plus any lump sums (DBCBS fund)"

Hope this helps....

Yes that’s useful information, it’s looks a clear response to me.

I will be working out my lump sum calculation where by it includes the supplement.

[heapsy]

So, if this is right, my NRA60 pension is Annual pension £5,904.25 + £1,225.99 supplement + pension increase £1,597.17 = £8,727.41. If I multiply this by 20 I get £174,548.20. Then there's my most recent AVC figures £1,885.54 + £31,887.63 =£208,321.37. If I divide that by 4 = £52,080.34 for the lump sum. I haven't included any DBCBS fund. Doesn't sound right to me but I hope I'm right.