Cash balance fund built up from 2018

[markis]

Since the scheme closed in 2018 , we have been building up a cash balance fund. Does all this fund automatically go into the new scheme as soon as it goes live and give a lump sum and a pension when you reach state retirement age of 67.

[RobertT]

No, the DBCBS is part of the RMPP and is predominantly attached to your NRA65 benefits, but some can be taken with your NRA60 too.

Or, if you're in section F, the DBCBS is basically the same as a normal DC pension.

The new CDC pension will actually be called the RM Collective Pension Plan, and will have a similar lump sum scheme running alongside it called the Defined Benefit Lump Sum Scheme.

The RMCPP will be completely separate from all existing RM pension schemes.

Full details are here: https://www.myroyalmail.com/collective-plan

[markis]

So we’ve been shafted again, and no doubt the new scheme with all the hoo haw ,RM and CWU did not make it clear about this. So this cash fund that I’ve built up I take it at 65, and the new scheme once it’s up and running I would pay into that and get that at 67. So I would get three pension amounts 60, 65 and 67.

[RobertT]

The DBCBS has always been part of the RMPP and payable with existing benefits for section A, B & C members – it's nothing new!

For clarification, take a look at the 'members guide to benefits' on the RMPP website: https://www.royalmailpensionplan.co.uk/ ... c_v3.3.pdf

Or the 2018 4 pillars agreement: https://www.cwu.org/wp-content/uploads/ ... ow-res.pdf

[mags999]

hi has anyone a rough idea how much we have built up in this cash balance fund based on a delivery persons wage over the last 4 years

[RobertT]

hi has anyone a rough idea how much we have built up in this cash balance fund based on a delivery persons wage over the last 4 years

There's no definite answer to that because everyone's will be individual to them to some degree and based on their basic hours, the section they're in and pensionable allowances, etc.

Last years statement will tell you what you had after 3 years, which can be increased by the recently announced annual increment of 4.6% and then you've got 2021/22 contributions to add on.

My full time, section C amount as of 31st March 2022 should be roughly £16,770.

[mags999]

cheers robert was roughly what i thought around 15 or 16 thousand.

[deltaforce]

cheers robert was roughly what i thought around 15 or 16 thousand.

I received 11000 when I reached 65 in late 2020

[mags999]

Does anyone know if this is reduced if you take it before you reach 65

[RobertT]

Does anyone know if this is reduced if you take it before you reach 65

The RMPP website says it will be reduced, but no percentages are mentioned:
https://www.royalmailpensionplan.co.uk/ ... ring-early

The experience of others on this forum suggests it isn't reduced by much, if at all.

[renrag40]

When Stephen500 took his pension and helpfully showed a step by step account of the process I think his DBCBS money was reduced by 1.6% for each year he took it early.
I'm not sure whether he logs in here anymore but if he does and I'm wrong I'm sure he will correct the figure I've given above.

[RobertT]

When Stephen500 took his pension and helpfully showed a step by step account of the process I think his DBCBS money was reduced by 1.6% for each year he took it early.
I'm not sure whether he logs in here anymore but if he does and I'm wrong I'm sure he will correct the figure I've given above.

If memory serves me correctly, Stephen500 didn't take into account the annual increases in pension contributions(due to the 2014 changes), or the yearly percentage uplift in existing DBCBS monies. Despite me mentioning it to him at least twice.

Therefore I suspect the reduction might be larger than 1.6% per year when taken early.

[Jaggs]

I'm confused. Given that the cash balance scheme is just a pot of money/investments being built up how can there be any reduction to it for taking it early?

[RobertT]

I'm confused. Given that the cash balance scheme is just a pot of money/investments being built up how can there be any reduction to it for taking it early?

A perfectly fair question!
The answer being that it's classed as a defined benefit scheme and has an NRA. Although in practice it can be taken with benefits built up after 2012, which does includes some NRA60 aswell as NRA65.

If you want access to it before either NRA and without having to take your pension, there is the option to transfer out your DBCBS pot. But income tax may well eat into more of it when you subsequently access it, depending on circumstances.

[Woody Guthrie]

The reason a pension is reduced if taking it before NRA is obvious.

The reason that a lump sum is reduced before NRA is not so obvious.

The only possible argument would be to reflect any potential investment loss to the overall fund by not having access to that capital but surely that would be negligible.

Seems like a scam to me and the excuse that "that's the rules" doesn't really wash.