Left over AVC

[Wullie10]

Took my NRA 60 section C and my Bonus plan AVC paid most of the tax free lump sum. A small amount was left of about £3000. At NRA 65 will this be paid a s a tax free lump sum ? As they'll be quite a large Lump sum via the cash builder what is the best options to avoid tax as much as possible. Would it be in my interests to transfer the AVC into my private pension and do whatever I want with it later ?

[RobertT]

The Cash Balance(DBCBS) is specifically attached to your RMPP Age65 pension(2012-2018)*, but AVC's can be taken with all benefits. So it's possible at least some excess AVC cash could be taken with the RMSPS Age65 pension(2010-2012) tax free.

To work out how much of it could be tax free, use the normal 20x multiple to work out the value of your RMSPS Age65 pension. If you then assume that is 75% of that particular element, the other 25% can be taken tax free from your AVC.
A very easy way of working out the other 25% is to divide by 3.

For example:

£600 x 20 = £12,000 / 3 = £4,000

So in that example up to £4,000 could be taken tax free from AVC's.

However, if you choose to fund the tax free cash by commuting some pension, the AVC would be paid out as a UFPLS. In which case transferring it out beforehand could be a better choice, depending on how you decide to access it and how much other income you have at the time.

*A small amount of DBCBS is often paid with Age60 benefits, because the RMPP are also responsible for paying some inflationary increases on RMSPS pensions.

[Engy]

I took my Avc with my 60 pension B section. There was 28k left over which I took as uncrystalized lump sum. Do you know how long they take to pay that out Robert? Got my pension and lump sum last month but no mention of what was left over

[RobertT]

Going by previous posts on here, you may have to wait around 16 weeks. But you're better off asking the pensions people to confirm.

[freespeech]

Going by previous posts on here, you may have to wait around 16 weeks. But you're better off asking the pensions people to confirm.

Do you know whether you are paid interest for that four month delay? I'm expecting a £100k tax free lump sum which would be over £1k in interest even at a low 3% for four months.

[RobertT]

As far as I know, your money will continue to be invested in the fund/s of your choice for the majority of the delay. So will obviously depend on how they perform.

Expect a similar wait for any UFPLS payments from the DBCBS.
Increases to that are only applied once a year, so I doubt if you'll see any change to the amount you get.

[Engy]

Thanks Robert