Pensions News leaflet.

[Brainache]

In the newsletter page 4 AVC`s - `As now, you will still be able to take some or all of your AVC fund as a tax-free lump sum on retirement. You may just need to opt to transfer part of your AVC fund to the RMSPS in order to maximise that tax-free lump sum. What does that bit mean ? Is it something new ? Thanks.

[RobertT]

I wondered about that as well and I'm not 100% sure, but this is how I see it:

Your pension is now in 2 parts, what you earned before 31st March 2012(RMSPS) and what you earn after(RMPP).
Both of those will probably be worth different amounts and therefore provide different benefits. They will also be paid out by two separate entities.

So to when you come to retire you may have to 'assign' some of your AVC pot to your RMSPS pension and some to your RMPP pension, therefore maximising both your index linked pension and tax free lump sum from both parts of your overall pension.

[Brainache]

Thanks Robert T.