Pension pot value ? help needed

[moyaspawn]

Is there anybody on this forum that has any idea how you can work out the value of your pension pot.
If so, any formula or information would be appreciated.

[RobertT]

As a rough guide, just multiply the pension you've built up so far by 20 and you won't be too far off.

[moyaspawn]

Thanks Robert for the advice. I have checked the royal mail pension website and came across this download regarding if your pension pot is less than £30,000 you can take it all as a lump sum.
I have used this formula to work out what my pot is worth. Say my pot is worth £400,000 and I take £100,000(25%) as a lump sum then this will leave £300,000. Now what
I would like to know is how can I work out what my annual pension will be with the remainder of the pot. Once again any advice would be appreciated.

[RobertT]

Assuming you're a member of the RM final/career average salary scheme i.e joined before April 2008, you should get a statement every August. Doesn't that tell you the amount of pension you'd get?
The RM Pension Plan is a defined benefit scheme which pays out an amount based on your wages and length of service, so you haven’t actually got a pot of money with your name on it

[moyaspawn]

I thought being able to work out the value of your pot and what 25% lump sum you could take, maybe there
was a formula to work out your annual pension. Cheers again Robert.

[RobertT]

The formula used to work out what your pot is worth requires you to multiply your annual pension by 20. So you already know the answer to what your annual pension is! Or am I missing something?

[moyaspawn]

I can now take 25% of my pension pot as a tax free lump sum.
So I have multiplied my NR60 pension x 20
I have multiplied my NR65 pension x20 (-25% if I access at 60)
I have added in both lump sums and my avc.
Now say my pot comes to £400,000, minus £100,000 tax free lump sum, that leaves £300,000.
When I get my August statement it does not include my avc so it is not that accurate with my annual pension.
Sorry to be a pain Robert.

[RobertT]

It will depend on what you want to do with your AVC and to a certain extent which section of the pension scheme you’re in.

If you’re a member of section A/B (which it sounds as if you are) you get a lump sum as standard but can chose to commute some or all of that for a higher pension if you want to. If you’re in section C it’s the opposite, so you don’t get a lump sum as standard but you can give up part of your pension for that lump sum.

The ideal use of your AVC money, in my opinion, would be to use it to fund the tax free lump sum and so enable you to have a larger index linked income from the main scheme. But you could also use it to buy an annuity, or under new rules coming into force in April you could withdraw it in one go and probably pay tax on it or draw it down over a period of time, say between 60 & 65 and possibly pay no tax at all.

[Brainache]

Excuse me for chipping in... Robert T, is there any news on being allowed to take Zurich AVC in yearly chunks (£10Kish a year) to avoid tax.

[moyaspawn]

If I use my avc as my lump sum, can I then take all my royal mail pension as a monthly pension, like you said benefiting from being index linked.
cheers again Robert for your time and information.

[RobertT]

Excuse me for chipping in... Robert T, is there any news on being allowed to take Zurich AVC in yearly chunks (£10Kish a year) to avoid tax.

RM have not announced anything yet as far as I know, but I seem to remember a letter saying they were going to write to us before the new changes come in.

[RobertT]

If I use my avc as my lump sum, can I then take all my royal mail pension as a monthly pension, like you said benefiting from being index linked.
cheers again Robert for your time and information.

Yes you should be able to take all your pension as income and just take your lump sum from your AVC.

[moyaspawn]

Cheers Robert for all the information you have mentioned
I just need to check out about about ' draw down' now.

[royalmaill]

Just a wee warning to anybody thinking that they may be in for a huge pension pot. As far as I'm aware there is no legal requirement for RMPP to allow u to access the full pot. If they believe it could jeopardise the viability of the scheme then they will veto it. I'm coming up for 55 and would love to have access to my full pot....or would I??

[RobertT]

Just a wee warning to anybody thinking that they may be in for a huge pension pot. As far as I'm aware there is no legal requirement for RMPP to allow u to access the full pot. If they believe it could jeopardise the viability of the scheme then they will veto it. I'm coming up for 55 and would love to have access to my full pot....or would I??

The only way you could get hold of the cash in a final salary pension scheme would be to transfer it to a defined contribution plan. However under the new pension rules, transfers out of un-unfunded public sector pensions are to be banned and The Royal Mail Statutory Pension Scheme(all your pension up to April 2012) is included in this.
I suppose you could get hold of the RMPP element(pension after April 2012) but the value of that would be minimal, so in practice getting hold of your RM pension ‘pot’ is not an option anyway.