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Royal Mail pension contributions scheme.

15 Jul 2017, 18:51

How do I opt out do the Royal Mail pension scheme I don't need a pension for when I'm retired as I'm comfortable and won't need it. So how do I opt out and get the money back I have already paid into it.

Royal Mail pension contributions scheme.

15 Jul 2017, 19:33

unless you are 55 I don't think you can. no doubt ROBERT T. will be the man to confirm.

Royal Mail pension contributions scheme.

15 Jul 2017, 20:05

Lightweight andy wrote:How do I opt out do the Royal Mail pension scheme I don't need a pension for when I'm retired as I'm comfortable and won't need it. So how do I opt out and get the money back I have already paid into it.


If you have only been in the scheme for i think 2 yrs or less, you can get a cash back to what you have paid in, if however you have been in for more than 2 yrs you have to transfer it to a scheme of your choosing or stay as a deferred member, no doubt Robert T will correct me :thumbup

Royal Mail pension contributions scheme.

15 Jul 2017, 21:47

Lightweight - do you really want to forego a 13.6% employer contribution until retirement (the worst case outcome of current proposal) ? The options of a refund of of pension contributions for less than 2 years service (less the 20% tax relief granted) no longer apply after 1 October 2015.

Seek some advice before taking any negative action FFS!

Royal Mail pension contributions scheme.

16 Jul 2017, 07:34

Lightweight andy wrote:How do I opt out do the Royal Mail pension scheme I don't need a pension for when I'm retired as I'm comfortable and won't need it. So how do I opt out and get the money back I have already paid into it.

From the title of this thread I’m assuming you’re in the RM Defined Contribution Plan administered by Zurich, so you joined sometime after 1st April 2008?

If so, you can’t normally touch the money until you’re aged 55 and then only 25% of it is guaranteed to be tax free.

All the info on the RMDCP is here: https://www.zurich.co.uk/internet/works ... 716529.pdf
And here’s some general DC info: https://www.moneyadviceservice.org.uk/e ... on-schemes

The RMDCP currently provides a maximum contribution level of 6% employee / 9% employer, potentially rising to 10% from April 2018 pending on-going discussions which you may have read about.

Based on full time wages of £412.30 your maximum 6% contribution would be £24.73 per week, but factoring tax relief and PSE the actual cost to you would only be £16.81 – the government pays the rest!. And you’ll get another £37.10(9%) off RM too. That’s £61.83 going into your pension and it’s only costing you £16.81.
So by opting out, you’re turning down £45 per week and effectively giving yourself a pay cut.

You might be comfortable but the RMDCP provides a substantial amount of ‘free money’ in the form of tax relief, NI relief(PSE) and RM contributions, which might actually be useful for retiring a bit earlier than you’d planned. Personally I have a personal pension aimed at doing just that!

Or perhaps it can be used to make your life that little bit more comfortable than it already is. There are different options with a DC pension pot(see the link above), so if you don’t want an income from it, just treat it as a savings account.

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