Reductions to New Pension for Early Retirement

[Postie Malone]

I know that a few people have queried how much the new pension would be reduced for taking it before the NRA of 67. I have just received this reply to my query which seems to give slightly more information than has been released previously.

If a member takes their benefits before age 67 then both their income for life and lump sum will be reduced because they are being paid earlier and the income for life will be paid for longer.

So that the reductions are fair, they must be adjusted for the Collective Plan’s financial circumstances, and so will change periodically.

As an indication, for the income for life, reductions will initially be around 5% per year that a member retires before age 67. For example, for a member retiring at age 65, as that is two years early there could be a reduction of around 10% compared to the income for life they may have received if they were already age 67.

Similarly, as an indication, for the lump sum, reductions will initially be around 1-2% per year that a member retires early. For a member retiring at age 65, this could be a reduction of around 3% compared to the lump sum they may have received if they were already age 67.

It should be noted however that these reductions could change, and could be higher or lower than the examples given here at any given time.

[vmaxv4]

[JKSmudge]

Is it possible to retire at 65 but not take the pension until age 67 ?

[Rommagic]

Cwu want age down too 65.

[heapsy]

Is it possible to retire at 65 but not take the pension until age 67 ?

Yes, you can do that with any of them. I'm taking just my NRA60 when I retire at 60. It's too much of a hit, when you consider the reduction in the cash element also. Tbh, people should have got wise to this back in 2008. As I have other pensions and money coming my way, I'll take it in stages to avoid the big hit.

[Hyrrokkin]

Cwu want age down too 65.

Then why did the CWU and RM have an NRA 67 in the 1st place ?

Why did they not have NRA 65 as the de facto age at the start

[Postie Malone]

Cwu want age down too 65.

If they wanted to reduce the NRA for this scheme to 65, while still accruing the target pension of 1/80th pensionable pay for each year worked then I guess that that would mean increasing member contributions to at least 10% of pay rather than 6%.

Maybe they think that the Czech Sphinx will give us all a bumper payrise so that we can afford it.

If members can afford that then they can still pay the extra contributions into the AVC scheme to help cover the gap until claiming the new pension at 67.

[RobertT]

Apparently the CWU think the RMPP surplus could be used to fund a reduction in NRA from 67 to 65.

To want to change the way the RMCPP works even before it starts, is complete madness if you ask me.