Understanding pension at age 60

[Wat69]

Section C Member - 37 years service - ideally want to go at age 60 in 2 years time

I have hopefully pieced together my pension figures from my 2 most recent pension statements based on the formula previously provided by Robert T but now need some more help

Age 60
£11541 per annum
£45,000 currently in AVC
£11541 x 20 = £230,820 so maximum tax free lump sum will be £57,705 (partially funded by my £45,000 in AVC and the other £12,705 will be funded by giving up some of my yearly pension, I am not sure what the computation rate is for this??

Age 65
£4174
£34,000 in Cash Balance scheme
4174 - 25% for taxing this at age 60 and not age 65 (£3131) x 20 = £62,620, so maximum lump sum will be £15,655 (funded by my cash balance of £34,000 and the remaining £18,345 in the cash balance will be taken as an UFPLS with the first 25% of this tax free and the remaining 75% will be taxable, leaving a total of £15,594 after the tax etc

I haven't had a statement for the new CDC scheme as yet but I will probably just leave this one alone until I am 67 and take it with my state pension, not expecting much with this one

Does the above look correct, any help appreciated,

[RobertT]

Age60 pot = £275,820(pension x 20 + AVC's), so max lump sum = £68,955.

Commutation rates can vary, but as a rough guide go by 1:20.
To generate the extra £24k lump sum on top of your AVC's, you'll be giving up about £1,200 in pension.

Age65:
The Cash Balance can only be used to fund the lump sum with RMPP benefits.
You may be able to take some(probably a small amount) with any RMPP element of Age60, with the remainder attached to RMPP Age65(2012-2018).

As the Cash Balance is over the 25% limit, the way to work out how much of that can be taken tax free is to assume the pension element is 75% of the 'pot' and therefore the other 25% of your pot is from the Cash Balance.

For example:
£3k(RMPP Age65) x 20 = £60k and so £20k of the Cash Balance is tax free, with the remainder paid as a UFPLS.

*A similar method is used when AVC's total more than 25% of your Age60 'pot'. In your case you'd need AVC's worth £77k+ for it to be an issue.

If you want a lump sum with the RMSPS part of Age65 benefits, that will have to be funded by giving up some pension.
So you'll need to calculate the RMSPS and RMPP elements of your Age65 benefits separately.

RMCPP:
I believe you can login into your online account and see your annual statement there.
I think I read somewhere that this year will be the only time you get a paper statement and they will only be online in the future?

[Wat69]

Thanks for the comprehensive reply Robert ,much appreciated , RM pensions are incredibly difficult to understand , this has given me much to work out and get my head round, hope you don’t mind if I come back with even more questions!
Thanks again

[Wullie10]

Congratulations with your AVC. It probably means you can go at 60 and not a cripple at 67. It's amazing how many tell me if only they knew at the time.

[Wat69]

Yes luckily i knew about AVC years ago have been paying in about 26 years! Probably just regret not paying in more but did what I could afford

[RobertT]

Thanks for the comprehensive reply Robert ,much appreciated , RM pensions are incredibly difficult to understand , this has given me much to work out and get my head round, hope you don’t mind if I come back with even more questions!
Thanks again

With the various schemes, sections, retirement ages, etc, RM pensions can be very difficult to get your head round!
With time and making use of the reading matter on the websites(as well as this forum), it does get easier.

Congratulations with your AVC. It probably means you can go at 60 and not a cripple at 67. It's amazing how many tell me if only they knew at the time.

AVC's are great and more people should have paid them in the past, as well as now. They do have the potential to make a big difference to your retirement!

Personally I've never really understood the 'if only I knew at the time' argument, as the information provided by the schemes have always mentioned the ability to pay more.

I think it's more a case of most people don't really take enough notice until they get to a certain age and start thinking about retirement. By then it's often too late to make a massive difference.

[NWpostie]

Thanks for the comprehensive reply Robert ,much appreciated , RM pensions are incredibly difficult to understand , this has given me much to work out and get my head round, hope you don’t mind if I come back with even more questions!
Thanks again

With the various schemes, sections, retirement ages, etc, RM pensions can be very difficult to get your head round!
With time and making use of the reading matter on the websites(as well as this forum), it does get easier.

Congratulations with your AVC. It probably means you can go at 60 and not a cripple at 67. It's amazing how many tell me if only they knew at the time.

AVC's are great and more people should have paid them in the past, as well as now. They do have the potential to make a big difference to your retirement!

Personally I've never really understood the 'if only I knew at the time' argument, as the information provided by the schemes have always mentioned the ability to pay more.

I think it's more a case of most people don't really take enough notice until they get to a certain age and start thinking about retirement. By then it's often too late to make a massive difference.

I agree I chucked as much as I can much into mine as possible before it closed and CDC came in, now its looking very healthy , I've just checked mine recently Flexiplan £64,500 Bonusplan £11,500 total of £76,000 now that will cover my lump sum and leave my age65 alone, with two years to go its likely yo grow even bigger *fingers crossed*

As I come closer to the time Ill be back on here to review my options and I certainly hope to leave at 60.

[Hyrrokkin]

Yes luckily i knew about AVC years ago have been paying in about 26 years! Probably just regret not paying in more but did what I could afford

AVC's are great - my only regret was not starting them much earlier - but still made a nice profit from mine.

Transferred mine to a SIPP (just under £50,000 Flexiplan/Bonusplan) but paying into the current AVC scheme to build up again.

Most people i know have never even heard of them - even when i tell them they still will not do anything.

Well up to them

[RobertT]

Most people i know have never even heard of them - even when i tell them they still will not do anything.
Well up to them

That was my experience too.
Most people see pensions as something to think about when they're old, but that's completely missing the point. It's all about thinking ahead!