Transferring out, has anyone done this?

[NorthernBoy]

Is this allowed…

I am wanting to know if anyone has transferred their NRA 60 and 65 benefits out of the scheme or they know someone who has.

I know this is not generally a good idea but I am curious as to what transfer values people were given in relation to the amount of annual pension that they gave up.

From what I have read you can’t transfer to a Dc scheme, but you can transfer to another Db scheme or an insurance buy out policy, from which I think you would have to buy an annuity.

If this is allowed, perhaps I could get a higher pension, if say I was single and I didn’t need the spouse half pension option for example.

Anybody done this?

[heapsy]

RobertT probably knows better than me. What I will say being single myself is, think carefully. You will still get a guaranteed pension for the rest of your life. My NRA 60 is worth about £8700 per year without the lump sum. That's £174,000 over 20 years, without increases. Even more if you factor increases in and living beyond that 20 years. On top I've got the NRA 65, and then the NRA 67 to come, plus state pension. I understand your situation might not be the same. Remember, pension freedom came about due to the poor performance from pension providers. An annuity probably wont be a great investment, rates are pretty dire. Think about an increasing payment, this will cost you dearly going down the annuity route. Yes, it grates on me that we don't get some sort of refund for being single at the time of taking our pensions. My neighbour got just such a refund, then again, he was a civil servant, they always look after their own. Tbh it wouldn't be such a bad thing if pension funds did do it. Many people marry later in life, or remarry after quite a few years being single. A payoff such as that would draw a line under things for the company scheme. And tbh, older people tend to be better off, more than one pension, inheritance, their own property etc, so some might go for it instead of money for a spouse that may never happen.

[RobertT]

RMSPS(pre 2012) benefits can only be transferred to another DB scheme, details here: https://www.royalmailsps.co.uk/im-not-r ... y-benefits

RMPP (post 2012) benefits can be transferred into a DC scheme, but will be subject to the £30k advice rule. Details here: https://www.royalmailpensionplan.co.uk/ ... erring-out

AVC's and the DBCBS can be transferred out separately

I've never looked into this seriously myself, but I seem to remember someone on this forum a few years ago who got a CETV which was his pension x20. Which is the normal multiple for valuing DB schemes.

Some pension schemes do offer a higher multiple as an incentive to get members off their books, sometimes as much as x40 or more. But as far as I know RM don't.

To quote heapy's figures. If he wanted to buy an annuity paying out £8,700(no lump sum) at 60, inflation proofed and with 50% spouses benefits, he would need a pot worth about £365,000.

Whereas if he were to transfer out, based on the x20 multiple, he'd get £174k. Which would only get him a pension on the same terms as above, of £4,180. Less than half!

A level single life annuity(no increases or spouses benefits) paying out £8,700(no lump sum) would require a pot of about £200k. Meaning staying with your RM pension, despite having spouses benefits you might not need, would still be better choice.

All hypothetical of course and assuming you don't want to just take the transfer and blow it.

[NorthernBoy]

Thanks for the info.

Based on a transfer value of a pension x 20 then it just simply would not be worth doing. Now if it was x 40 then that may be worth looking at.

Also it says that pre 2012 benefits have to go to another DB scheme, which means I don’t think you could go out and buy an annuity. Can imagine the whole transfer process being very complicated as well.

Looks like I will have to keep on working for now!

[RobertT]

In theory it would be possible to transfer your RMSPS benefits to another DB scheme and then transfer out the combined benefits to DC. But the first thing that needs to be in place is that you currently work for a company that provides you with a DB scheme and accepts transfers in.

If the answer to that is no, you can forget it straight away.
If it's a yes, then consider the NRA & accrual rates of the two schemes aswell as the CETV.

[hermon]

You can obtain a CETV free of charge once a year - just ring pensions dept and ask.
As Robert mentioned, mine was roughly a 20x multiple 3-4 years ago.

[NorthernBoy]

Well I have just received my cetv transfer value for my RMPP benefits (post 2012).

To my surprise and I think this will also be for many on here are the actual figures they are quoting me.

Age 60 RMPP value is 47 x my annual pension
Age 65 RMPP value is 38 x my annual pension

If I take both them both the value is 42 x the combined pensions.

I am not saying I will do this as you have to pay for advice and it can be a difficult process, but certainly the figures are making me think about it.

I am a deferred member and my age is 51

Interesting

[Hyrrokkin]

Well I have just received my cetv transfer value for my RMPP benefits (post 2012).

To my surprise and I think this will also be for many on here are the actual figures they are quoting me.

Age 60 RMPP value is 47 x my annual pension
Age 65 RMPP value is 38 x my annual pension

If I take both them both the value is 42 x the combined pensions.

I am not saying I will do this as you have to pay for advice and it can be a difficult process, but certainly the figures are making me think about it.

I am a deferred member and my age is 51

Interesting

Wow those are impressive transfer values - usually about the standard 20x with RM
Obviously you have to decide based on your needs now and the future...we are all different in that regard

[NorthernBoy]

Well I have just received my cetv transfer value for my RMPP benefits (post 2012).

To my surprise and I think this will also be for many on here are the actual figures they are quoting me.

Age 60 RMPP value is 47 x my annual pension
Age 65 RMPP value is 38 x my annual pension

If I take both them both the value is 42 x the combined pensions.

I am not saying I will do this as you have to pay for advice and it can be a difficult process, but certainly the figures are making me think about it.

I am a deferred member and my age is 51

Interesting

Wow those are impressive transfer values - usually about the standard 20x with RM
Obviously you have to decide based on your needs now and the future...we are all different in that regard

Yes they are a lot higher than what I thought they would be.

I am seriously having a think about whether to transfer out, as the money can be used in a personal pension. Tempting at these levels.

[97gaz]

I know that the pension earned between 2008 and 2012 can only be transferred to another DB scheme, not a personal pension. I asked earlier this year and apparently that was the scheme rules. As an aside, I'm busy trying to put two small pensions I have from a previous company into a SIPP and they're offering me annual pension x 83.

[NorthernBoy]

I know that the pension earned between 2008 and 2012 can only be transferred to another DB scheme, not a personal pension. I asked earlier this year and apparently that was the scheme rules. As an aside, I'm busy trying to put two small pensions I have from a previous company into a SIPP and they're offering me annual pension x 83.

That’s an amazing transfer figure.

Have you received positive transfer advice from an financial advisor? My understanding is that without a positive opinion DB transfers are extremely difficult to do.

Any advice you can pass on is appreciated

[RobertT]

I know that the pension earned between 2008 and 2012 can only be transferred to another DB scheme, not a personal pension. I asked earlier this year and apparently that was the scheme rules. As an aside, I'm busy trying to put two small pensions I have from a previous company into a SIPP and they're offering me annual pension x 83.

All RM pension accrued before 2012 can only be transferred to another DB scheme, which includes all final salary and the first 4 years of CARE. Basically everything that comes under the remit of the RMSPS.

A multiple of 83 is massive, can I ask just for interest, which company you have those pensions with?

[97gaz]

I know that the pension earned between 2008 and 2012 can only be transferred to another DB scheme, not a personal pension. I asked earlier this year and apparently that was the scheme rules. As an aside, I'm busy trying to put two small pensions I have from a previous company into a SIPP and they're offering me annual pension x 83.

All RM pension accrued before 2012 can only be transferred to another DB scheme, which includes all final salary and the first 4 years of CARE. Basically everything that comes under the remit of the RMSPS.

A multiple of 83 is massive, can I ask just for interest, which company you have those pensions with?

I have two small pensions with Rolls Royce from two different periods of employment with them . Together they pay out £600pa. I have been given a transfer value quotation of just under £50k.

[97gaz]

I know that the pension earned between 2008 and 2012 can only be transferred to another DB scheme, not a personal pension. I asked earlier this year and apparently that was the scheme rules. As an aside, I'm busy trying to put two small pensions I have from a previous company into a SIPP and they're offering me annual pension x 83.

That’s an amazing transfer figure.

Have you received positive transfer advice from an financial advisor? My understanding is that without a positive opinion DB transfers are extremely difficult to do.

Any advice you can pass on is appreciated

Both of my pensions mentioned have a transfer value of less than £30k. As these pensions were from different periods of employment, they can not be lumped together. Financial advice must be obtained before you can transfer a pension worth more than £30k.

I would think it virtually impossible to transfer out of the Royal Mail DB schemes. A financial advisor could not say you'll get a better deal anywhere else. Even if you had another job with a DB scheme (which practically don't exist now) you'd probably lose by transferring in.

[NorthernBoy]

Just as an update on this, I have contacted the pension team and asked for an upto date cetv transfer value.

Last year the cetv was about 130k for giving up about £3200 per year in pension.

I am expecting a fall in the cetv figure and will update on here once I get the new value.