Age 65 Benefits Section C

[tractorboy2]

I received my option form from Capita for my Age 65 benefits.

Do I have to complete the LTA and Lump sum Allowance forms ?
This is what it says:-

Lifetime Allowance and Lump Sum Allowances Form
Please ensure you provide details about your RMPP benefits
You must complete and return this form ,unless you have selected option 1.

I have selected Option 1.

Also is the Cash Balance classed as a PCLS ?

[RobertT]

I think you've already answered the first part of your question!
Unless someone can confirm, I suggest you contact RMSPS and ask them to clarify.

The Cash Balance will be classed as a Pension Commencement Lump Sum(PCLS) if it's taken with option 1A, because you're using it to fund the 25% tax free cash. With anything left over being paid out as a UFPLS(25% of that is also tax free)

With options 1 and 2, you're effectively taking the Cash Balance as a separate thing alongside your other benefits. Meaning on all of it is paid as a UFPLS.

[RMDEAN11]

Can someone clarify when doing the calculation for the amount of lump sum is the 2 years worth still in the RMSP counted along side the RMPP amount . And also do you add the cash balance amount and then do the calculation to come to your 25% lump sum ?

[tractorboy2]

I think you've already answered the first part of your question!
Unless someone can confirm, I suggest you contact RMSPS and ask them to clarify.

The Cash Balance will be classed as a Pension Commencement Lump Sum(PCLS) if it's taken with option 1A, because you're using it to fund the 25% tax free cash. With anything left over being paid out as a UFPLS(25% of that is also tax free)

With options 1 and 2, you're effectively taking the Cash Balance as a separate thing alongside your other benefits. Meaning on all of it is paid as a UFPLS.

Thanks RobertT

[RobertT]

Can someone clarify when doing the calculation for the amount of lump sum is the 2 years worth still in the RMSP counted along side the RMPP amount

Do separate calculations for both and then add them up.
Bearing in mind the Cash Balance can only be taken with RMPP benefits.

And also do you add the cash balance amount and then do the calculation to come to your 25% lump sum ?

To work out how much Cash Balance can be used to fund the 25% lump sum with option 1A, you first need to work out the value of the other 75%, which is the pension.
That's done by multiplying it by 20. If you then divide by 3, you'll get the 25% figure you want.

In example figures:
£2,000 x 20 = £60,000 / 3 = £20,000

In that example your RMPP Age65 'pot' is worth £80,000(£60k+£20k) with any leftover Cash Balance being paid as a UFPLS(25% also tax free). So if your Cash Balance was £30k, a total of £22.5k would be tax free and £7.5k classed as income and taxed accordingly.

*Reductions will apply if taken before NRA.

[RMDEAN11]

Thanks Robert