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07 Oct 2019, 16:57
I have just spoken to the pension team and wanted to make sure that the answers given to my 2 questions were correct according to others understand.
I am taking my NRA 60 with no pension reduction but maximum tax free lump sum from my AVC. What happens to the remainder of my AVC funds as the total value is over 25% of my pension.
This money can be kept invested until you take your NRA 65 and then can form part of your 25% tax free lump sum. All employees are still paying into their NRA 65 scheme.
Can I leave my DBCBS invested and still pay into it and still pay into it and just take my NRA 60 and AVC funds.
Many thanks for any help.
08 Oct 2019, 14:15
Those answers seem ok to me, but my observations are:
You can keep any excess AVC cash invested until you take your NRA65 or take it as taxable cash along with your NRA60 if you choose. You'll obviously have to do your maths to see what's best for you.
If you take both NRA60 & NRA65 you'll have to take all of your AVC cash.
If you have both Flexiplan & Bonusplan, transferring one of them into a personal pension might be one way to avoid tax. Drawing it down alongside your NRA60 pension to keep your income below the personal tax allowance, or to fund early retirement.
I think it's also possible to transfer your DBCBS pot into a pp – the 'pension review update' from February 2018 says you can, but there's nothing specific in the plan guide.
A question to ask the PSC perhaps?
All section A, B & C members of the RMPP are paying into the DBCBS which is funding some or all of your NRA65 tax free lump sum. But is only attached to benefits accrued between 1st April 2012 & 31st March 2018.
As long as you're still employed and don't take your NRA65 benefits, you can still pay into the DBCBS. As soon as you take your NRA65, you cease to be an employee member of the RMPP, but you have the option of joining the RMDCP currently and the CDC scheme when that happens.
I was told by the PSC, that also applies if you choose to stop paying into Bonusplan.
08 Oct 2019, 21:19
Thank you Robert as always.
It was the bit that we are all still paying into our NRA 65 that threw me but as you say this is just building up a lump sum.
One thing that did stand out was the very very small amount of cash that was in my DBCBS up until now.
Im still a little unclear on the future. Im in the DBCBS. Am i paying anything at all into an actual pension at present or just a lump sum until the new scheme starts.
09 Oct 2019, 04:30
We stopped accruing any more pension on 31st March 2018, so all yours and RM's contributions are going into the DBCBS.
The DBCBS works in a very similar way to AVC's – it helps to pay our lump sums associated with our NRA60 & NRA65 benefits, so we don't have to give up as much or any pension to get them. Which is particularly good for section C members who don't get a lump sum as standard.
I can't comment on the amount of cash in your DBCBS pot as you haven't given any figures. But a quick off the top of my head calculation says my section C DBCBS pot should currently be worth roughly in the region of £5,800 after 18 months of paying in.
I haven't yet had my annual statement giving the 12 month figures!
Perhaps your quote includes a reduction for taking it before NRA?
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