Pension proposals in new agreement

[stephen500]

Another factor affecting us ‘oldies’ who have worked for RM for many years paying in to a pension which was described as ‘opted’ out may find that they need to work beyond 60 to be eligible for the New State Pension in its entirety … you may only have sufficient NI credits for a reduced state pension if you cease work at 60 (obviously not getting the state pension until 65,66.67,68 etc) ... I would recommend as I did you go to HMRC.GOV to check out your own NI record to find out if you will qualify for the whole amount of NSP ... currently around £161 a week

You are right that most of us will currently not qualify for a full state pension as a lot of us were contracted out. Which meant that our NI contributions were reduced because we had a RM pension. However, whether you get a full state pension depends on how much service you have left. As we are now contracted in and pay full ni contributions to our state pension , it is now rebuilding by £4 per year we work added to our weekly state pension . My predicted state pension was £126 when contracted out finished and has been rebuilding by £4 per year. I think it stopped in around 2016. So mine should increase by 5 years times £4, taking me to £146. If you have more years to go, you may well be back to a full state pension by the time you retire. No one told us we were contracted out or we would have got less. Thank goodness it changed

[thegreatestfreddy]

I agree that the pensions section of the agreement is very difficult to quantify in terms of actual cash in your hand when you eventually get it !…

Just wanted to clarify… The new DBCB scheme (which comes into effect from April 2018 and is transitional), is that purely a cash lump sum only scheme ?… and if so does it pay out at the rate of 19.6% of pensionable pay for each year of service in that transitional scheme and say if runs for 5 years would pay out approximately 100% of pensionable pay at that point … say around £18,000 when taking into account our pensionable pay (whole time) less LEL ??

Hope someone knows !!

The NRA pension you can take at 65, with an approx 10% reduction. I may be taking it at 60 with a 35% reduction. NRA 60 with no reduction and NRA 65 with a 25% reduction. I could leave the NRA67 till a bit later.

The transitional DBCB scheme will be a new section of the RMPP and will provide a lump sum to take along with your normal RMPP benefits, in a similar way to how AVC’s do. The relevant bit in the agreement states:

Normal Retirement Age – 65, although benefits will be payable from 60 without reduction if taken with existing NRA60 pension benefits.

As there is no benefit from deferring your NRA60 beyond 60, we will have two bites of the cherry as far as taking the DBCB unreduced is concerned – 60 or 65.

The CDC scheme will be implemented after the DBCB scheme, but only if the required legislation is granted. It’s the CDC scheme that will have an NRA of 67!

Correct...

I reiterate though ...

Anyone thinking about retiring... say 50 + and have been working for RM or other similar (govt or employer providing a ‘contracted out’company pension scheme … which there are many) for most of their working lives need to check out the state of your NI contributions as you may face a shock when coming to claim your (New) State Pension

[thegreatestfreddy]

Another factor affecting us ‘oldies’ who have worked for RM for many years paying in to a pension which was described as ‘opted’ out may find that they need to work beyond 60 to be eligible for the New State Pension in its entirety … you may only have sufficient NI credits for a reduced state pension if you cease work at 60 (obviously not getting the state pension until 65,66.67,68 etc) ... I would recommend as I did you go to HMRC.GOV to check out your own NI record to find out if you will qualify for the whole amount of NSP ... currently around £161 a week

You are right that most of us will currently not qualify for a full state pension as a lot of us were contracted out. Which meant that our NI contributions were reduced because we had a RM pension. However, whether you get a full state pension depends on how much service you have left. As we are now contracted in abs pay full ni contributions to our state pension , it is now rebuilding by £4 per year we work added to our weekly state pension . My predicted state pension was £126 when contracted out finished and has been rebuilding by £4 per year. I think it stopped in around 2016. So mine should increase by 5 years times £4, taking me to £146. If you have more years to go, you may well be back to a full state pension by the time you retire. No one told us we were contracted out or we would have got less. Thank goodness it changed

Good news also in that if you do retire ‘early’ (before state pension age) if you in are a very part time job, I believe earning around £115 a week in some capacity, allows for a full ‘credit’ being award to you NI record which will boost your state Pension if necessary so that may be a route for some people who may otherwise be short on their full state pension entitlement

[RobertT]

You are right that most of us will currently not qualify for a full state pension as a lot of us were contracted out. Which meant that our NI contributions were reduced because we had a RM pension. However, whether you get a full state pension depends on how much service you have left. As we are now contracted in abs pay full ni contributions to our state pension , it is now rebuilding by £4 per year we work added to our weekly state pension . My predicted state pension was £126 when contracted out finished and has been rebuilding by £4 per year. I think it stopped in around 2016. So mine should increase by 5 years times £4, taking me to £146. If you have more years to go, you may well be back to a full state pension by the time you retire. No one told us we were contracted out or we would have got less. Thank goodness it changed

From 2016 the state pension accrues at the rate of 1/35th of the full rate for each qualifying year. So with a current full rate of £159.55, that’s £4.55 per year added to your state pension.

The whole point of contracting out of the state second pension was to build up at least as much from your works pension that you were giving up from the state. The ending of contracting out means that if you have age on your side, you have the ability to have that benefit from your RMPP and build up more state pension too. Although you’ll have to work for longer than the headline 35 years qualifying period!

All the plan guides that I’ve seen over my 30 years’ service have said that the RMPP was contracted out.

[RobertT]

[I reiterate though ...

Anyone thinking about retiring... say 50 + and have been working for RM or other similar (govt or employer providing a ‘contracted out’company pension scheme … which there are many) for most of their working lives need to check out the state of your NI contributions as you may face a shock when coming to claim your (New) State Pension

I’ve been saying the same on these forums for quite a while now!

[thegreatestfreddy]

[I reiterate though ...

Anyone thinking about retiring... say 50 + and have been working for RM or other similar (govt or employer providing a ‘contracted out’company pension scheme … which there are many) for most of their working lives need to check out the state of your NI contributions as you may face a shock when coming to claim your (New) State Pension

I’ve been saying the same on these forums for quite a while now!

Well said

[RobertT]

Good news also in that if you do retire ‘early’ (before state pension age) if you in are a very part time job, I believe earning around £115 a week in some capacity, allows for a full ‘credit’ being award to you NI record which will boost your state Pension if necessary so that may be a route for some people who may otherwise be short on their full state pension entitlement

It's currently £5,876 per tax year from one employment to earn a qualifying year for the state pension. Going up to £6,032 for 2018/19. You could theoretically do that in a few months or weekly over 52 weeks - £113 p/w this year, £116 p/w from April.

[thegreatestfreddy]

Just wanted to clarify… The new DBCB scheme (which comes into effect from April 2018 and is transitional), is that purely a cash lump sum only scheme ?… and if so does it pay out at the rate of 19.6% of pensionable pay for each year of service in that transitional scheme and say if runs for 5 years would pay out approximately 100% of pensionable pay at that point … say around £18,000 when taking into account our pensionable pay (whole time) less LEL ??

Hope someone knows !!

Has anyone got a definitive answer to my question above ....??

Thanks, in anticipation

[RobertT]

Just wanted to clarify… The new DBCB scheme (which comes into effect from April 2018 and is transitional), is that purely a cash lump sum only scheme ?… and if so does it pay out at the rate of 19.6% of pensionable pay for each year of service in that transitional scheme and say if runs for 5 years would pay out approximately 100% of pensionable pay at that point … say around £18,000 when taking into account our pensionable pay (whole time) less LEL ??

Hope someone knows !!

Has anyone got a definitive answer to my question above ....??

Thanks, in anticipation

It’s a cash sum that sits alongside your RMPP benefits and provides some or all of your tax free lump sum when you take your pension. It’s particularly useful for Section C members who don’t get a lump sum as standard.
You can’t take it as a standalone lump sum – it has to be taken at the same time as your main benefits!

If you pay into it for 5 years at 19.6% total contributions, you should get a sum of 98% of your pensionable pay plus investment returns. So not very much!

[mr hil.]

A little more detail of the new pension proposal

https://www.facebook.com/Thecommunicati ... 710888168/