Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • grantie2u
    • By grantie2u 11th Jul 17, 4:15 PM
    • 16Posts
    • 2Thanks
    grantie2u
    No freedom for my pension!!!
    • #1
    • 11th Jul 17, 4:15 PM
    No freedom for my pension!!! 11th Jul 17 at 4:15 PM
    I'm approaching 55 and I'm considering taking my ex Royal Mail pension at 55. I've read a lot about people getting a cash equivalent value and transferring it to my private pension so that i can draw however much I wish from it, get a larger tax free 25% in the first instance and in the event of my death I can will all of it to my spouse or children instead of just 50% of it or worse still nothing when my wife also dies.
    Royal mail tell me that whist I can request the cash equivalent value, I can not transfer it to a private scheme which would offer me pension freedom as it is now a part of the unfunded public sector schemes meaning I can not take advantage of the pensions freedoms.
    I have never received any communication either from Government or Royal Mail about this and feel cheated of the opportunity to take advantage of the pensions freedoms the rest of the country has, why is this the case and why is it ok that no one told us this?
Page 1
    • xylophone
    • By xylophone 11th Jul 17, 4:30 PM
    • 22,026 Posts
    • 12,706 Thanks
    xylophone
    • #2
    • 11th Jul 17, 4:30 PM
    • #2
    • 11th Jul 17, 4:30 PM
    http://www.royalmailpensionplan.co.uk/section-c/leaving-scheme/transferring-out

    Your pension has different parts, including:
    • The RMSPS benefits you built up before 1 April 2012 and the RMPP benefits you built up after this date.
    • Age60 benefits, which are usually paid when you reach 60, and Age65 benefits, which are usually paid when you reach 65.
    • Additional Voluntary Contributions (AVCs), if you choose to pay them.

    You can transfer different parts separately. However, under Government rules you can’t transfer your RMSPS benefits to a Defined Contribution arrangement (that includes the Royal Mail Defined Contribution Plan). Contact the Pensions Service Centre for more information. Remember: you should always get financial advice to ensure you make the choice that’s right for you.




    https://www.pensions-ombudsman.org.uk/determinations/2017/po-11197/royal-mail-statutory-pension-scheme/


    .......the Scheme, which is an unfunded public sector scheme. In 2015, new legislation (Appendix 1) came into effect which meant benefits from unfunded public sector schemes could not be transferred to defined contribution schemes after 5 April 2015 (the transfer cut-off date).
    • grantie2u
    • By grantie2u 11th Jul 17, 4:44 PM
    • 16 Posts
    • 2 Thanks
    grantie2u
    • #3
    • 11th Jul 17, 4:44 PM
    • #3
    • 11th Jul 17, 4:44 PM
    Yes thanks, I'm aware of all of the above. My question was why is this the case so why was the legislation allowed and how is that fair to me under the pensions freedoms act?
    • AnotherJoe
    • By AnotherJoe 11th Jul 17, 4:57 PM
    • 6,904 Posts
    • 7,341 Thanks
    AnotherJoe
    • #4
    • 11th Jul 17, 4:57 PM
    • #4
    • 11th Jul 17, 4:57 PM
    I have never received any communication either from Government or Royal Mail about this and feel cheated of the opportunity to take advantage of the pensions freedoms the rest of the country has, why is this the case and why is it ok that no one told us this?
    Originally posted by grantie2u
    Would it have made any difference? And you have received communication. Just not proactively (unless it was in a scheme update you didn't read) probably because you are on such a good deal it wouldn't be worth doing.

    "the rest of the country" doesn't have this anyway. You have a gold plated pension compared, to "the rest of the country" if by that you mean non public sector. So thats why.

    Seems to me you want your cake and eat it.
    • atush
    • By atush 11th Jul 17, 4:58 PM
    • 16,101 Posts
    • 9,807 Thanks
    atush
    • #5
    • 11th Jul 17, 4:58 PM
    • #5
    • 11th Jul 17, 4:58 PM
    Because the Act was NEVER meant for you and your DB pension. It was meant for DC pensions. Which have a pot of money and people were forced to do certain things with it.

    and given there is no pot of money for you, and all the others in non funded public service pensions incl Teachers and nurses, you cant transfer it. Period?
    • xylophone
    • By xylophone 11th Jul 17, 5:20 PM
    • 22,026 Posts
    • 12,706 Thanks
    xylophone
    • #6
    • 11th Jul 17, 5:20 PM
    • #6
    • 11th Jul 17, 5:20 PM
    http://www.bbc.co.uk/news/business-17423461

    The nationalisation of the Royal Mail's pension scheme has been approved by the European Commission.

    For all pension earned to date, the scheme will become an unfunded arrangement, paid for out of taxation, like the schemes for teachers, civil servants, NHS staff and the armed forces.



    http://citywire.co.uk/money/why-theres-no-pension-freedom-for-the-public-sector/a801075

    And this is the problem. While the Local Government Pension Scheme – the largest in public sector – does have a pot of contribution money to fall back on, many other pension schemes for teachers, NHS employees, civil servants, armed forces, police and fire-fighters are unfunded, or 'pay as you go', schemes paid out of general taxation.

    Unfunded schemes are a large financial burden on the state. According to the Office of National Statistics, current liabilities to workers' future pensions stand at £852 billion, or a staggering 58% of the UK economy.

    While this huge sum may not be a problem if retirees are paid their pension over a long period of time, as they were designed to, it becomes a very big problem if lots of people decide to transfer out and ask for a cash payment.
    • Thrugelmir
    • By Thrugelmir 11th Jul 17, 6:15 PM
    • 54,390 Posts
    • 47,202 Thanks
    Thrugelmir
    • #7
    • 11th Jul 17, 6:15 PM
    • #7
    • 11th Jul 17, 6:15 PM
    I'm approaching 55 and I'm considering taking my ex Royal Mail pension at 55. I've read a lot about people getting a cash equivalent value and transferring it to my private pension so that i can draw however much I wish from it, get a larger tax free 25% in the first instance and in the event of my death I can will all of it to my spouse or children instead of just 50% of it or worse still nothing when my wife also dies.
    Originally posted by grantie2u
    Doesn't guarantee a better return than the benefits offered under your pension though. Even it were accessible.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • hyubh
    • By hyubh 11th Jul 17, 6:24 PM
    • 1,818 Posts
    • 1,343 Thanks
    hyubh
    • #8
    • 11th Jul 17, 6:24 PM
    • #8
    • 11th Jul 17, 6:24 PM
    While this huge sum may not be a problem if retirees are paid their pension over a long period of time, as they were designed to, it becomes a very big problem if lots of people decide to transfer out and ask for a cash payment.
    Originally posted by xylophone
    In the Royal Mail case, only because everyone's favourite odd-jobing freesheet editor flogged off the scheme's assets 'to bring down the national debt'...
    • Thrugelmir
    • By Thrugelmir 11th Jul 17, 6:30 PM
    • 54,390 Posts
    • 47,202 Thanks
    Thrugelmir
    • #9
    • 11th Jul 17, 6:30 PM
    • #9
    • 11th Jul 17, 6:30 PM
    In the Royal Mail case, only because everyone's favourite odd-jobing freesheet editor flogged off the scheme's assets 'to bring down the national debt'...
    Originally posted by hyubh
    What assets?
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • hyubh
    • By hyubh 11th Jul 17, 7:29 PM
    • 1,818 Posts
    • 1,343 Thanks
    hyubh
    What assets?
    Originally posted by Thrugelmir
    The assets of the Royal Mail Pension Fund before Osborne nationalised the scheme and sold them off... It was a trust-based scheme before then, so a step less public sector-y than the LGPS (which is a statutory not trust-based scheme even though it is funded).
    • Silvertabby
    • By Silvertabby 11th Jul 17, 9:30 PM
    • 1,272 Posts
    • 1,469 Thanks
    Silvertabby
    I have never received any communication either from Government or Royal Mail about this and feel cheated of the opportunity to take advantage of the pensions freedoms the rest of the country has, why is this the case and why is it ok that no one told us this? Posted by grantie2u
    When the 'Pension Freedoms' were announced, the newspaper reports did say that they only applied to personal/money purchase pension plans, and not to the (unfunded) Public Sector defined benefit schemes.
    Last edited by Silvertabby; 11-07-2017 at 9:33 PM.
    • hyubh
    • By hyubh 11th Jul 17, 11:16 PM
    • 1,818 Posts
    • 1,343 Thanks
    hyubh
    When the 'Pension Freedoms' were announced, the newspaper reports did say that they only applied to personal/money purchase pension plans, and not to the (unfunded) Public Sector defined benefit schemes.
    Originally posted by Silvertabby
    A complete swindle in my view... If good upstanding citizens like grantie2u want to do the public-spirited thing and transfer out on SCAPE terms, the cash should be made available to help them do exactly that.
    • grantie2u
    • By grantie2u 12th Jul 17, 9:02 AM
    • 16 Posts
    • 2 Thanks
    grantie2u
    well thanks all for your comments, interesting. My complaint, quite apart from the fact that whether we like it or not and whether we have a gold plated scheme or not is this, as my pension provider, Royal Mail had a duty to write to its individual members to inform them that after this date in 2015 we could not transfer our pensions, this would have given us the choice to either move it or not, we were not given that choice. Fact.
    • PeacefulWaters
    • By PeacefulWaters 12th Jul 17, 9:34 AM
    • 6,590 Posts
    • 8,084 Thanks
    PeacefulWaters
    well thanks all for your comments, interesting. My complaint, quite apart from the fact that whether we like it or not and whether we have a gold plated scheme or not is this, as my pension provider, Royal Mail had a duty to write to its individual members to inform them that after this date in 2015 we could not transfer our pensions, this would have given us the choice to either move it or not, we were not given that choice. Fact.
    Originally posted by grantie2u
    Perhaps the letter got lost in the post.
    • GunJack
    • By GunJack 12th Jul 17, 9:35 AM
    • 9,606 Posts
    • 7,170 Thanks
    GunJack
    well thanks all for your comments, interesting. My complaint, quite apart from the fact that whether we like it or not and whether we have a gold plated scheme or not is this, as my pension provider, Royal Mail had a duty to write to its individual members to inform them that after this date in 2015 we could not transfer our pensions, this would have given us the choice to either move it or not, we were not given that choice. Fact.
    Originally posted by grantie2u
    Even if they had done, youd've been pushed to do so - from legislation to cut-off was only a month
    ......Gettin' There, Wherever There is......
    • grantie2u
    • By grantie2u 12th Jul 17, 10:14 AM
    • 16 Posts
    • 2 Thanks
    grantie2u
    I think we've been stitched up, its unfair to have pensions freedom for everyone but then say people with pensions which now fall under the unfunded public sector schemes cant access the freedoms, it is through no fault of the members of these schemes that they are now in this situation, we paid in when the employers were told by the schemes actuaries to take years of payment holidays but where are the sanctions on the them?
    • Linton
    • By Linton 12th Jul 17, 10:32 AM
    • 7,976 Posts
    • 7,787 Thanks
    Linton
    I think we've been stitched up, its unfair to have pensions freedom for everyone but then say people with pensions which now fall under the unfunded public sector schemes cant access the freedoms, it is through no fault of the members of these schemes that they are now in this situation, we paid in when the employers were told by the schemes actuaries to take years of payment holidays but where are the sanctions on the them?
    Originally posted by grantie2u
    No, you didnt pay in when your employer took years of payment holiday. With an unfunded scheme your and your employer's payments dont go into a pot. Broadly the money you both paid in went to pensions paid out to current pensioners with the risk that they dont match taken by the employer and ultimately by the tax payer. You paid in to gain a right to a future pension, that's all. There is no pot out of which you could be paid.
    • PeacefulWaters
    • By PeacefulWaters 12th Jul 17, 10:34 AM
    • 6,590 Posts
    • 8,084 Thanks
    PeacefulWaters
    I think we've been stitched up, its unfair to have pensions freedom for everyone
    Originally posted by grantie2u
    Millions never had these freedoms you seem to think everybody else has.

    but then say people with pensions which now fall under the unfunded public sector schemes cant access the freedoms, it is through no fault of the members of these schemes that they are now in this situation
    And it's no fault of anybody else that you have a pretty decent pension, packed with guarantees that most of the population don't have.

    we paid in when the employers were told by the schemes actuaries to take years of payment holidays but where are the sanctions on the them?
    Seems a bit irrelevant.
    • Malthusian
    • By Malthusian 12th Jul 17, 10:48 AM
    • 2,416 Posts
    • 3,366 Thanks
    Malthusian
    I think we've been stitched up, its unfair to have pensions freedom for everyone but then say people with pensions which now fall under the unfunded public sector schemes cant access the freedoms
    Originally posted by grantie2u
    Personally I would have given everyone in your situation the right to transfer out of unfunded schemes in exchange for, let's say, 20x their annual pension. But the Government is less cruel than I am.

    it is through no fault of the members of these schemes that they are now in this situation
    Of course it is. You could have not made contributions to your pension and instead saved the money in your own name; you chose to give up flexibility and access in exchange for the benefits that the Royal Mail pension scheme offered. And you would have been insane to do anything else.

    we paid in when the employers were told by the schemes actuaries to take years of payment holidays but where are the sanctions on the them?
    What has that got to do with it? Employers were forced to take pension scheme holidays in the 90s because putting money into a pension scheme that already (by all actuarial calculations) had enough money to meet its future obligations was viewed by all right-thinking people as a means of dodging their fair share of corporation tax. Can't have that, can we.

    Pension freedoms were introduced because it was no longer tenable to force people down the road of buying annuities with their personal pensions, given the crap rates annuities offered. People in gold-plated pension schemes have no reason to worry about annuity rates - they will get a stupendous rate of return no matter what annuity rates are like. (Indeed, they are part of the reason why annuity rates are crap in the first place. We are trillions in debt, in part due to public sector pension liabilities; because we are trillions in debt we need to inflate our debt away as much as possible; to stoke inflation interest rates need to be kept low; because interest rates are low annuity rates are crap.) Pension freedoms were never intended for them - they aren't the ones who needed pension freedom.
    • grantie2u
    • By grantie2u 12th Jul 17, 1:49 PM
    • 16 Posts
    • 2 Thanks
    grantie2u
    Ah, now I understand, it's all my fault :-)
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

180Posts Today

1,280Users online

Martin's Twitter
  • Byebye! I'm about to stop work & twitter, to instead spend glorious time with Mrs & mini MSE. Wishing u a lovely summer. See u in 10 days.

  • WARNING Did you start Uni in or after 2012? The interest's rising to 6.1%; yet it doesnt work like you think. See https://t.co/IQ8f0Vyetu RT

  • RT @JanaBeee: @MartinSLewis Boris is the anomaly (coffee), the others are versions of normal (beer). Lots of same candidates = vote share d?

  • Follow Martin