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Nil pay sick affect on pension
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sanafz100
- Posts: 7
- Joined: 25 Aug 2022, 16:35
- Gender: Male
Nil pay sick affect on pension
Hi, if anyone can help please. Am on nil pay and receiving SPPR. No pension contributions are being deducted from my pay (RMPP DBCBS A/B). Unfortunately due to sickness I'm unable to return to work so have been offered the lump sum payment. I'm 66, didn't take my Age65 benefits so I could continue contributing to the scheme. Manager says I need to contact RMPP, RMPP say HR will notify us so I just seem to be going round in circles. I last contributed to the scheme last month so what should I do as delaying it further would it mean I am losing out? Would my pension be backdated to the date I last contributed? Any advice will be appreciated. Thank you.
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RobertT
- EX ROYAL MAIL
- Posts: 6644
- Joined: 09 Sep 2007, 14:26
- Gender: Male
Re: Nil pay sick affect on pension
Section A, B & C members of the RMPP stopped accruing pension in 2018 and what we had then has continued to increase with inflation each year since. From then on, we've been building up a lump sum via the DBCBS, which is predominantly to be taken with NRA65 benefits. Although it can be transferred out to another pension provider if you wish.
You will be entitled to however much you've paid into the DBCBS at the time of your last contribution, plus the 13.6% off RM. Although as section A/B members get a lump sum as standard, you might find you pay quite a lot of tax on the DBCBS(when taking it with NRA65), as the total amount of tax free cash is limited to 25% of your overall pot.
Whether you'll be better off as a result of not taking your NRA65 at 65 is debatable, and is impossible to say without any figures. But it won't be backdated to your 65th birthday!
It's a case of, have you gained more in DBCBS than you've lost by not taking your pension at NRA?
If you want to start drawing your NRA65 benefits, all you have to do is tell the RMPP that you want to take it, and they should then get back to you with the figures. Bearing in mind that some of your NRA65 is also administered by Capita.
Taking your pension is independent of your IHR payout.
As you're 66, I assume you're already drawing your state pension? If not, there is little benefit in deferring it.
You will be entitled to however much you've paid into the DBCBS at the time of your last contribution, plus the 13.6% off RM. Although as section A/B members get a lump sum as standard, you might find you pay quite a lot of tax on the DBCBS(when taking it with NRA65), as the total amount of tax free cash is limited to 25% of your overall pot.
Whether you'll be better off as a result of not taking your NRA65 at 65 is debatable, and is impossible to say without any figures. But it won't be backdated to your 65th birthday!
It's a case of, have you gained more in DBCBS than you've lost by not taking your pension at NRA?
If you want to start drawing your NRA65 benefits, all you have to do is tell the RMPP that you want to take it, and they should then get back to you with the figures. Bearing in mind that some of your NRA65 is also administered by Capita.
Taking your pension is independent of your IHR payout.
As you're 66, I assume you're already drawing your state pension? If not, there is little benefit in deferring it.
Links to all RM pension related websites are here