05 Apr 2019, 17:32
05 Apr 2019, 18:06
05 Apr 2019, 18:20
At retirement, the vast majority of RMPP members take the maximum 25% lump sum, which is currently tax-free. To do this, they give up some of their pension.
These members will be able to use their DBCBS benefits to fund part or all of their lump sum. This is possible because the DBCBS is a scheme within the existing RMPP.
In order for the DBCBS benefits to work more efficiently for members, by allowing them to take their retirement lump sums in the most tax efficient way, the Company needs Government approval for some rule changes to the Royal Mail Statutory Pension Scheme (RMSPS). This is the scheme that has responsibility for members’ benefits built up to March 2012. As the DBCBS is a transitional arrangement, with these rule changes, we expect most members would be able to take their DBCBS lump sum entirely tax-free.
If Government does not agree to make the RMSPS rule changes, the DBCBS will still operate. However, some members would be able to take less of their DBCBS benefit entirely tax-free.
With Government approval, the lump sum would be paid at the same time as the benefits earned for service to 31 March 2018, either as part of the age 60 or age 65 benefits.
The way the scheme is designed means that members with pre 31 March 2018 benefits in the RMPP or the RMSPS would not need to give up some, or even any, of their pension built up to March 2018 to get the same lump sum. So members would build up a lump sum for service after 31 March 2018, but the outcome is more pension.
05 Apr 2019, 20:53
06 Apr 2019, 03:41