15 Nov 2019, 15:48
renrag40 wrote:The £5000 is what you have built up to the end of March 19, it is not a forecast. The cash balance fund can only be taken when you take your nra 60 or nra 65 benefits. It cannot be taken separately. Due to a recent ruling by the government the nra for the cash balance fund is 65 so if you took it early it would be reduced. The exact % I don’t know but would assume it would be the 5% per year as with your other nra 65 entitlements.
I interpret the workings out slight differently to RobertT in that the cash balance fund replaces part of your lump sum but does not increase the lump sum in any way. It has the effect of increasing your yearly pension in section B. The usually accept divider/multiplier for the pension pot is 20.
So for example, if your nra 65 pension is £3000 with a lump sum of £9000 retiring at nra. The total pension pot would be £69000 ((20 x 3000)+ 9000) of which you can take a maximum of 25% tax free which would be £17250 leaving £51750 pension pot to which is added the £5000 to give £56750.... this is then divided by 20 to give a yearly pension £2837.50.
The long and short of it being that the cash balance fund would give you an increase of £250 per year to £3250 if you didn’t take the maximum lump sum or mitigate the reduction in your yearly pension by £250 if you did take the maximum lump sum.
I would be interested to hear RobertT opinion on the above as this is just my ramblings on the subject and he has far more knowledge on the matter than me.
15 Nov 2019, 18:28
15 Nov 2019, 19:03
15 Nov 2019, 19:30
15 Nov 2019, 19:38
16 Nov 2019, 15:29
RobertT wrote:There does seem to be some confusion about this!
The original idea was that the DBCBS would be linked to all our pension and could be taken along with either NRA60 or NRA65. But RM needed Cabinet Office approval for it to be linked to our pre 2012 RMSPS benefits. That's the part the government pays!
A few months ago we received a letter saying that approval had been refused and it could only be linked to our 2012-2018 benefits.