A spreadsheet to make RM pension illustrations easier and more visual to understand!!

[freespeech]

I'm so pleased to be wrong as that helps my position a lot. However, it does further reinforce my point about pension estimates being a mess when you can't see the final position (inc AVC's and and cash balance impact) until you have signed to take your pension.

I can't disagree!

So are you saying I can use all my £21k cash balance fund and all of my bonusplan/flexiplan AVC's of £10k to fund £31k of my LS for NRA60?

The DBCBS is 'attached' to the RMPP and so is mainly used to fund the lump sum associated with RMPP(2012-2018) benefits, plus a small amount of pre 2012 benefits which the RMPP are also responsible for paying. A point that's been mentioned on these forums several times before.

Any excess DBCBS cash, once the tax free element has been paid, will be available to you as a UFPLS, which means the first 25% of that excess will also be tax free, with the remainder coming under normal PAYE tax rules.

Going by your previous posts, I have a much smaller NRA60 pension than you and I expect to take a tax free lump sum of around £52,000 from my AVC's. So your £10,000 will be well within the 25% tax free limit.
IF you want a bigger lump sum, then that will be funded by commuting some of your pension, plus a relatively small amount of DBCBS as mentioned above.

I also have a possible VR option and was thinking of putting £20k of that back into an AVC (rather than pay tax) so that is now £51k towards my NRA60 LS.

That's a possibility, but payments into AVC's have to be done via payroll so you'll need to get in touch with them to ensure you can actually do what you propose.

Another option might be to put your taxed amount into a personal pension, as you'll effectively get the tax back.

My lump sums are as follows from my ESTIMATE (not statement):-

NRA60 RMPP £13,961 RMSPS £67,310

NRA65 RMPP £17,371 RMSPS £5,224

Cash balance fund is £21,767 Bonusplan is around £9k and Flexiplan around £1k. In addition a further £20 MAY go into flexiplan (through payroll) on VR. I'm still confused whether this total of nearly £52k can fund ALL of that amount tax free (it's about half of my total potential LS). The way I see it is that I have a pension figure with no LS and another at max LS. If the above will fund around half my LS then logic suggests I can take MAX LS and lose about half the difference between max pension and max LS (because the £52k is funding the other half of the LS). Is that a reasonable assumption?

[RobertT]

I'm so pleased to be wrong as that helps my position a lot. However, it does further reinforce my point about pension estimates being a mess when you can't see the final position (inc AVC's and and cash balance impact) until you have signed to take your pension.

I can't disagree!

So are you saying I can use all my £21k cash balance fund and all of my bonusplan/flexiplan AVC's of £10k to fund £31k of my LS for NRA60?

The DBCBS is 'attached' to the RMPP and so is mainly used to fund the lump sum associated with RMPP(2012-2018) benefits, plus a small amount of pre 2012 benefits which the RMPP are also responsible for paying. A point that's been mentioned on these forums several times before.

Any excess DBCBS cash, once the tax free element has been paid, will be available to you as a UFPLS, which means the first 25% of that excess will also be tax free, with the remainder coming under normal PAYE tax rules.

Going by your previous posts, I have a much smaller NRA60 pension than you and I expect to take a tax free lump sum of around £52,000 from my AVC's. So your £10,000 will be well within the 25% tax free limit.
IF you want a bigger lump sum, then that will be funded by commuting some of your pension, plus a relatively small amount of DBCBS as mentioned above.

I also have a possible VR option and was thinking of putting £20k of that back into an AVC (rather than pay tax) so that is now £51k towards my NRA60 LS.

That's a possibility, but payments into AVC's have to be done via payroll so you'll need to get in touch with them to ensure you can actually do what you propose.

Another option might be to put your taxed amount into a personal pension, as you'll effectively get the tax back.

My lump sums are as follows from my ESTIMATE (not statement):-

NRA60 RMPP £13,961 RMSPS £67,310

NRA65 RMPP £17,371 RMSPS £5,224

Cash balance fund is £21,767 Bonusplan is around £9k and Flexiplan around £1k. In addition a further £20 MAY go into flexiplan (through payroll) on VR. I'm still confused whether this total of nearly £52k can fund ALL of that amount tax free (it's about half of my total potential LS). The way I see it is that I have a pension figure with no LS and another at max LS. If the above will fund around half my LS then logic suggests I can take MAX LS and lose about half the difference between max pension and max LS (because the £52k is funding the other half of the LS). Is that a reasonable assumption?

Without knowing what the pension amounts are, it's impossible to say.
Which section are you in?

[freespeech]

I'm so pleased to be wrong as that helps my position a lot. However, it does further reinforce my point about pension estimates being a mess when you can't see the final position (inc AVC's and and cash balance impact) until you have signed to take your pension.

I can't disagree!

So are you saying I can use all my £21k cash balance fund and all of my bonusplan/flexiplan AVC's of £10k to fund £31k of my LS for NRA60?

The DBCBS is 'attached' to the RMPP and so is mainly used to fund the lump sum associated with RMPP(2012-2018) benefits, plus a small amount of pre 2012 benefits which the RMPP are also responsible for paying. A point that's been mentioned on these forums several times before.

Any excess DBCBS cash, once the tax free element has been paid, will be available to you as a UFPLS, which means the first 25% of that excess will also be tax free, with the remainder coming under normal PAYE tax rules.

Going by your previous posts, I have a much smaller NRA60 pension than you and I expect to take a tax free lump sum of around £52,000 from my AVC's. So your £10,000 will be well within the 25% tax free limit.
IF you want a bigger lump sum, then that will be funded by commuting some of your pension, plus a relatively small amount of DBCBS as mentioned above.

I also have a possible VR option and was thinking of putting £20k of that back into an AVC (rather than pay tax) so that is now £51k towards my NRA60 LS.

That's a possibility, but payments into AVC's have to be done via payroll so you'll need to get in touch with them to ensure you can actually do what you propose.

Another option might be to put your taxed amount into a personal pension, as you'll effectively get the tax back.

My lump sums are as follows from my ESTIMATE (not statement):-

NRA60 RMPP £13,961 RMSPS £67,310

NRA65 RMPP £17,371 RMSPS £5,224

Cash balance fund is £21,767 Bonusplan is around £9k and Flexiplan around £1k. In addition a further £20 MAY go into flexiplan (through payroll) on VR. I'm still confused whether this total of nearly £52k can fund ALL of that amount tax free (it's about half of my total potential LS). The way I see it is that I have a pension figure with no LS and another at max LS. If the above will fund around half my LS then logic suggests I can take MAX LS and lose about half the difference between max pension and max LS (because the £52k is funding the other half of the LS). Is that a reasonable assumption?

Without knowing what the pension amounts are, it's impossible to say.
Which section are you in?

I'm in C.......estimates as follows (these are based on drawing at 55):-

Max pension: NRA60 RMPP £2076, RMSPS £13,008

NRA65 RMPP £3187, RMSPS £1,009

Max LS: NRA60 RMPP £1549, RMSPS £10,096

NRA65 RMPP £2532, RMSPS £783

So, max pension is around £19k and min around £15k..........fag packet suggests that if other stuff can fund half the LS then I should get max lump sum and £17k (half way between the two).

[RobertT]

Christ you don't make it easy, do you!
So in simple easy to read terms and based on your info, I think your options are:

NRA60 benefits:

Max pension = £15,084 / no lump sum; or
Reduced pension = £11,645 / max lump sum = £81,271

NRA65 benefits:

Max pension = £4,196 / no lump sum; or
Reduced pension = £3,315 / max lump sum = £22,595

So your £10,000 in AVC's could either:

Fund some of the NRA60 lump sum, meaning a higher pension, probably in the region of £500 per year; or
Add it to the £81,271 lump sum, but some of it would probably be taxable as a UFPLS.

Your DBCBS fund of £21,767 could either:

Fund most of your NRA65 lump sum, meaning a higher pension, probably in the region of £1,000 per year; or
Add it to the £22,595 lump sum, but some of it would probably be taxable as a UFPLS.

*With a Uncrystallised Funds Pension Lump Sum(UFPLS), the first 25% is tax free, with the remainder being taxed under PAYE rules.

Buying an annuity with excess AVC's and DBCBS is also possible, but with the relatively small amounts involved, probably isn't worthwhile.

[NorthernBoy]

Free speech,

What age are you now, is your current NRA statement figure 25% higher and NRA65 figures 50% higher than these figures.

I am trying to work out from my statement what I would get if I am taking mine at 55, thanks.

Your conversion rate of pension to lump sums looks pretty good



I'm in C.......estimates as follows (these are based on drawing at 55):-

Max pension: NRA60 RMPP £2076, RMSPS £13,008

NRA65 RMPP £3187, RMSPS £1,009

Max LS: NRA60 RMPP £1549, RMSPS £10,096

NRA65 RMPP £2532, RMSPS £783

[freespeech]

Christ you don't make it easy, do you!
So in simple easy to read terms and based on your info, I think your options are:

NRA60 benefits:

Max pension = £15,084 / no lump sum; or
Reduced pension = £11,645 / max lump sum = £81,271

NRA65 benefits:

Max pension = £4,196 / no lump sum; or
Reduced pension = £3,315 / max lump sum = £22,595

So your £10,000 in AVC's could either:

Fund some of the NRA60 lump sum, meaning a higher pension, probably in the region of £500 per year; or
Add it to the £81,271 lump sum, but some of it would probably be taxable as a UFPLS.

Your DBCBS fund of £21,767 could either:

Fund most of your NRA65 lump sum, meaning a higher pension, probably in the region of £1,000 per year; or
Add it to the £22,595 lump sum, but some of it would probably be taxable as a UFPLS.

*With a Uncrystallised Funds Pension Lump Sum(UFPLS), the first 25% is tax free, with the remainder being taxed under PAYE rules.

Buying an annuity with excess AVC's and DBCBS is also possible, but with the relatively small amounts involved, probably isn't worthwhile.

Many thanks Robert........I have approx £2k on top of this for the pension supplement. Things are looking good.

[freespeech]

Free speech,

What age are you now, is your current NRA statement figure 25% higher and NRA65 figures 50% higher than these figures.

I am trying to work out from my statement what I would get if I am taking mine at 55, thanks.



I'm in C.......estimates as follows (these are based on drawing at 55):-

Max pension: NRA60 RMPP £2076, RMSPS £13,008

NRA65 RMPP £3187, RMSPS £1,009

Max LS: NRA60 RMPP £1549, RMSPS £10,096

NRA65 RMPP £2532, RMSPS £783

I'm currently 54 and the estimate is with a leaving date of March '21 so a year more than the annual pension statements (so they don't reconcile). Without the supplement if I compare like for like (using the usual methods on this forum) the growth appears to be around £700 for each NRA and this is consistent with previous years. What I cant work out is the supplement for NRA60. My annual statement shows this as £1228 (no reduction for taking early) but my estimate advises £2k. This £700 difference plus the two NRA £700 differences reconcile to the £2100 difference I have no other explanation for.

[NorthernBoy]

Free speech,

Are you not tempted to take your NRA60 and NRA65 at age 60, rather than 55?

On those figures you should get an NRA of about 20k and a NRA65 of 6k, giving a combined 26k pension assuming you didn’t reduce for lump sum.

Alternatively excluding any avcs you would have a pension value of 520k and max lump sum of 130k, with a reduced pension of around 20k

Both very tempting but clearly a personal choice and I can see the attraction of going at 55

[RobertT]

I should add Freespeech, that I didn't factor in the part of the DBCBS that's paid with the NRA60, partly because it's a bit of a grey area and hard to work out and partly because I forgot.

But in your case I would guess around £2,000-3,000 of your DBCBS would form part of your NRA60 lump sum, meaning tax is less likely to be an issue with your NRA65.

[freespeech]

I should add Freespeech, that I didn't factor in the part of the DBCBS that's paid with the NRA60, partly because it's a bit of a grey area and hard to work out and partly because I forgot.

But in your case I would guess around £2,000-3,000 of your DBCBS would form part of your NRA60 lump sum, meaning tax is less likely to be an issue with your NRA65.

Thanks Northern Boy and Robert T.........after 33 years I've had enough of it TBH. Ideally 57 would be the best age for me to go but if I could go at 55 and draw pension at 56 that would work too. Of course if I can get another 12 months or so and go at 56 and draw my pension at 57 that would work perfectly but I do wonder what the business will look like in the next few years. I'll wait and see what my options are......at present i'm just doing the groundwork if my job goes.

[stephen500]

I should add Freespeech, that I didn't factor in the part of the DBCBS that's paid with the NRA60, partly because it's a bit of a grey area and hard to work out and partly because I forgot.

But in your case I would guess around £2,000-3,000 of your DBCBS would form part of your NRA60 lump sum, meaning tax is less likely to be an issue with your NRA65.

Thanks Northern Boy and Robert T.........after 33 years I've had enough of it TBH. Ideally 57 would be the best age for me to go but if I could go at 55 and draw pension at 56 that would work too. Of course if I can get another 12 months or so and go at 56 and draw my pension at 57 that would work perfectly but I do wonder what the business will look like in the next few years. I'll wait and see what my options are......at present i'm just doing the groundwork if my job goes.

I have no idea what grade you are, but if you are a manager, then express an interest in VR, they seem to be asking all managers at present.