not on facebook
ANNOUNCEMENT : ALL OF ROYAL MAIL'S EMPLOYMENT POLICIES (AGREEMENTS) AT A GLANCE (UPDATED 2017)... HERE


ANNOUNCEMENT : BALLOT RESULT : 97.1% YES 75.9% TURNOUT... HERE



How much is your pension pot worth?

03 Oct 2019, 11:39

I was in section c pension, and left RM 12 years ago with 19 yrs service. I get the statement through every year telling me how much I'd get etc...at 60 and so on..What I don't understand is, why they don't tell you what's currently in your pot, if you wanted drawdown at 55. My current work pension tells you all this on the statements. I email them, and never get a reply...what a joke Capita is! Does anyone know how this can be worked out?

How much is your pension pot worth?

03 Oct 2019, 12:54

The reason they can't tell you what's in your pot is because you don't have a pot. You have a final salary pension. You can get an indication of your "pot" by asking for a CETV. Presumably your present employer is not a final salary scheme.

How much is your pension pot worth?

03 Oct 2019, 14:41

Fido69r could get a CETV but because all of his pension is in the RM Statutory Pension Scheme, his benefits can only be transferred to another defined benefit scheme, which he would have to be an active member of.

Transferring out RMSPS benefits to a defined contribution scheme is not allowed.

*The RMSPS applies to all RM pension accrued before 1st April 2012. More details: https://www.royalmailsps.co.uk/im-not-r ... y-benefits

How much is your pension pot worth?

03 Oct 2019, 17:29

I seriously don't understand any of this at all :shock: Are you saying, that I can't take 25% tax free of it when I'm 55?

How much is your pension pot worth?

03 Oct 2019, 18:01

Your RM pension is a defined benefit scheme whereby you accrue pension based on your pay and length of service. And as a section C member you can choose to take up to 25% of your 'pot value' as a tax free lump sum, with the remainder of your benefits being paid as index linked pension for the rest of your life.

As a rough guide if you multiply your yearly pension amount by 20 you'll get what your 'pot value' is. But when you apply to receive your benefits you'll get a more accurate estimate of what your lump sum and yearly pension will be.

You mentioned drawdown in your original post, which you can only do if you have a defined contribution pension and is totally different from the benefits you'll get from your DB RM pension. Hence the comments made.

This will tell you the difference between DC & DB: https://www.pensionlite.co.uk/defined-b ... -pensions/

And this tells you what drawdown is: https://www.moneyadviceservice.org.uk/e ... e-drawdown

There's lots more pension info available via the second link(Money Advice Service) that tells you all the various options you have with whatever pension/s you may have, including the state pension!

I hope that helps.

How much is your pension pot worth?

03 Oct 2019, 18:34

Robert.. my face has gone from :sad: to :Very Happy I've never understood this stuff....Too many pension schemes, causing so much confusion. So I'm guessing section C is not final salary then? I started it in July 1988.....and I can definitely take 25% when I'm 55?

How much is your pension pot worth?

03 Oct 2019, 18:46

All of your section C pension is final salary as that particular element of the RM pension plan closed in 2008 and was replaced by a career average scheme instead – both of which are examples of defined benefit pensions.

By law you can currently take any pension from age 55. But if you take any of your RM pension before Normal Retirement Age, which in the case of yours is 60, you'll get a 5% reduction for each year you take it early.
So by taking it at 55 you'll see a 25% hit on your benefits.

You will have to take both the lump sum and pension at the same time from your RM pension. You can't just take the lump sum and leave the rest invested as you can with a DC scheme.

How much is your pension pot worth?

04 Oct 2019, 09:21

Just had a look, and my current other pension is with Aviva, which calls itself a "Defined contribution section".
I'm guessing therefore that it can be transferred then, without having to draw it?

How much is your pension pot worth?

04 Oct 2019, 12:11

I politely refer you to Robert T's first post, second paragraph. And he is 100% accurate too.

How much is your pension pot worth?

04 Oct 2019, 12:41

OK, thanks...got that...seems from what I read that it sounds as though transferring it to a 'flexi-access' drawdown account may be the order of the day then?

How much is your pension pot worth?

04 Oct 2019, 13:15

Your DC pension with Aviva is just a pot of money that benefits from additional contributions from the tax man and your current employer. When you come to access it, you basically have 4 options(taken from this informative link:

1. Take your whole pension pot as a lump sum in one go. A quarter (25%) will be tax free and the rest will be subject to Income Tax and taxed in the usual way. Bear in mind that a large lump sum could tip you into a higher tax bracket for the year.
2. Take lump sums as and when you need them. A quarter of each lump sum will be tax free and the rest will be subject to Income Tax and taxed in the usual way. Bear in mind that a large lump sum could tip you into a higher tax bracket for the year.
3. Take a quarter of your pension pot (or of the amount you allocate for drawdown) as a tax-free lump sum, then use the rest to provide a regular taxable income.
4. Take a quarter of your pot as a tax-free lump sum and then convert some or all of the rest into a taxable retirement income (known as an annuity).

You may be able to do what you want to do(flexi-drawdown) via Aviva. But some providers don't allow full flexibility on all of their products, so you'll have to find out yourself whether you can do that with your pension or not. And if not, then transfer your cash to somewhere that does.

As stated earlier, the only option with your RM pension is to take up to 25% tax free cash, and an income for life.

Pensions are a bit of a minefield, so I would suggest you do a lot of homework and make sure you're doing the right thing for you and your family, not just now but think well into the future as well.

Also get yourself a state pension forecast, as that will form an important part of your income for the rest of your life. Depending on circumstances, you may or may not get the 'full' amount, currently £168 per week.

How much is your pension pot worth?

06 Oct 2019, 11:57

mmm...tricky stuff...thank you for all your replys, by the way...I've learned more about this now, in 5 mins, than I have over the past 30 years :Very Happy ...so technicaly, could I start another Defined benefit pension with another pension provider, and then transfer the royal mail one into that?..or am I being daft again? There must be a way ,without having to draw it.

How much is your pension pot worth?

06 Oct 2019, 12:36

DB pensions are only offered by employers, and you have to work for that particular employer to be able to pay in or transfer in.

If you did have a DB scheme with your current employer, you could potentially transfer your pre 2012 RM pension into that, if the scheme rules allow it.
You could then transfer the whole cash value out(both schemes combined) via a CETV process to a DC scheme.

That is the only possible way I'm afraid.

DB schemes are often called 'gold plated' due to them providing a guaranteed index linked income for life, and often with spouses benefits on death too.
So whether it's a good financial decision to give that up, is debatable anyway.

How much is your pension pot worth?

06 Oct 2019, 16:07

I see what you're saying Robert...I can't really take anything out then...shame really. :arrrghhh

Previous page Next page


Page 1 of 1