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 2
    • hyubh
    • By hyubh 12th Jul 17, 2:32 PM
    • 1,884 Posts
    • 1,399 Thanks
    hyubh
    Ah, now I understand, it's all my fault :-)
    Originally posted by grantie2u
    FWIW, it wasn't predictable to me that the government, in order to take the pension fund off of the privatised Royal Mail's books, would convert it to an unfunded scheme. While the situation was a bit different, the probation service was also privatised by the same Tory-Lib Dem government, yet its funded pension liabilities (LGPS - each probation trust was a member of its local LGPS fund) were kept that way, just bulk transferred to a single LGPS fund (Greater Manchester) with the government becoming direct guarantor.
    • atush
    • By atush 12th Jul 17, 5:01 PM
    • 16,236 Posts
    • 9,909 Thanks
    atush
    Ah, now I understand, it's all my fault :-)
    Originally posted by grantie2u
    By George, I think they've got it!
    • OldBeanz
    • By OldBeanz 12th Jul 17, 5:25 PM
    • 671 Posts
    • 501 Thanks
    OldBeanz
    Ah, now I understand, it's all my fault :-)
    Originally posted by grantie2u
    You are lucky to get away with that comment on here. Mention Public Sector Pensions and there are a number of posters who will argue vehemently about how they have been robbed by fat cat Government backed Defined Benefit pensioners because they have not had access to such good schemes.
    • chucknorris
    • By chucknorris 12th Jul 17, 6:00 PM
    • 9,094 Posts
    • 13,728 Thanks
    chucknorris
    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?
    Originally posted by grantie2u
    I'm in the TPS (teachers pension scheme) and I can't transfer that pension to a DC scheme either, but you know what? I am just grateful that I was lucky enough to able to take advantage of such a great generous DB pension scheme, you won't find me whinging about it. All you'll hear from me is what fantastic value the pension scheme is.

    Think about all the people who don't have access to such generous pension schemes, your post is a real slap in the face for them. You really need to count your blessings and focus on what you have got, rather than what others have.
    Last edited by chucknorris; 12-07-2017 at 6:05 PM.
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now also hike, cycle and swim, less impact on my joints.

    For the avoidance of doubt Chuck Norris is an actor and an ex martial artist (not me)
    • grantie2u
    • By grantie2u 13th Jul 17, 9:31 AM
    • 16 Posts
    • 2 Thanks
    grantie2u
    I often do think about those people who didnt take out pensions such as my wife but no matter how much I sympathise it doesnt make my situation right or proper. I do indeed get the feeling on here that I should consider myself lucky, and I do consider myself fortunate to have had the foresight to have sought employment for an employer who offers such benefits and savvy enough to take advantage of those benfits, after all they were a condition of my contract of employment, still no one has answered the fundamental question of the fairness of introducing so called pension freedoms legislation and almost immediately ruling that the now unfunded pension schemes cant take advantage of the new legislation, it is in plain english unfair...
    • Malthusian
    • By Malthusian 13th Jul 17, 10:03 AM
    • 2,864 Posts
    • 4,075 Thanks
    Malthusian
    Unfair is a meaningless word invented to allow children to take part in adult conversations. The fundamental reason unfunded defined benefit schemes are not allowed to use pension freedoms is because the Government considered there was no reason the taxpayer should stump up an upfront bill so someone could make themselves poorer (in 99% of cases).

    Furthermore the reason pension freedoms were introduced - low annuity rates - is not a concern for those in unfunded defined benefit schemes. Do you think it is unfair that the Goernment hasn't given the right to terminate a pregnancy to men or the right to have a civil partnership to heterosexual couples?
    • Silvertabby
    • By Silvertabby 13th Jul 17, 10:41 AM
    • 1,508 Posts
    • 1,797 Thanks
    Silvertabby
    There is a way round this, you know. Get a job in Local Government, transfer your RM benefits into the LGPS, then transfer the lot into a money purchase/cash it in now plan.

    Just don't come crying to us if your money runs out before you do.
    • johndough
    • By johndough 13th Jul 17, 12:12 PM
    • 651 Posts
    • 250 Thanks
    johndough
    Hi

    I was aware of the change in the status of the Royal Mail, and possibly the side issue of the pension scheme, it was in the news a lot.
    ################################################## #

    Royal Mail has offered its employees a cash balance defined benefit (DB) scheme as a compromise for closing its current career average DB scheme to accrual.
    The scheme, which could launch April 2018, would see members guaranteed a lump sum payment of the total value of contributions at retirement, which could be uplifted on a discretionary basis depending...

    ######


    Who knows what is over the horizon. It may be a rainbow with a pot of gold at the end, or just Bungle and Jeffrey.


    AAnd yes I am still angry about Postman Pat losing the right to display the Royal Mail logo, being sacked for being unreal. Royal Mail seems more of a puppet than he ever was.
    • Heatherclark
    • By Heatherclark 15th Jul 17, 3:00 PM
    • 6 Posts
    • 2 Thanks
    Heatherclark
    Grantie2 you. I am in the same position. Even though I understand the financial implications of paying out so many DBs as a pot, I am also annoyed that this is my money - the pension was my savings plan that I will be taxed on twice (earnings and pensions), i was told that the earliest i could have it was 50 and now they have moved those goalposts to 55... and now is the only type of pension that cannot be transferred to DC as either a SIPP or cashpot. On my part i have a life limiting condition and the pension i have with the Post Office is relatively small, if i was able to transfer to DC i could invest part and use the other for medical needs. Whether or not people feel it is greedy, the main thrust here is it is money we have earned and they have kept (interest?) and use and give us access to on their terms, there is not many people i would allow to do this to me in the current climate. I have set up a workplace pension for a couple of companies in the last couple of years, they can opt out and invest their money where they feel meets their terms and needs, we did not get that. I also did not receive a letter to tell me of the changes, in addition i was on the phone to them to ask if i could transfer to a PO DC pension in the months prior to the 2015 date and they never told me or advised me of the up and coming changes.
    • Heatherclark
    • By Heatherclark 15th Jul 17, 3:04 PM
    • 6 Posts
    • 2 Thanks
    Heatherclark
    Silvertabby

    I have worked in schools and have a pension scheme. (I am not currently working in one though). Can i have my PO pension scheme transferred to that one and access it that way?

    Thank you, a small light.....
    • Silvertabby
    • By Silvertabby 15th Jul 17, 3:37 PM
    • 1,508 Posts
    • 1,797 Thanks
    Silvertabby
    Silvertabby

    I have worked in schools and have a pension scheme. (I am not currently working in one though). Can i have my PO pension scheme transferred to that one and access it that way?

    Thank you, a small light.....
    I'm so sorry, but no. You would have to be a current (contributing) member of the LGPS and within your first 12 months of membership to be able to transfer in your PO benefits.
    • hyubh
    • By hyubh 15th Jul 17, 4:16 PM
    • 1,884 Posts
    • 1,399 Thanks
    hyubh
    Grantie2 you. I am in the same position. Even though I understand the financial implications of paying out so many DBs as a pot, I am also annoyed that this is my money
    Originally posted by Heatherclark
    But it isn't.

    the pension was my savings plan
    Are you really saying you confused a final salary pension scheme with a 'savings plan'? Seems very odd.

    that I will be taxed on twice (earnings and pensions)
    But you got tax relief on your contributions, plus will get a tax free lump sum on retirement...?

    i was told that the earliest i could have it was 50 and now they have moved those goalposts to 55
    Covering pensions legislation had it at 50, then this was moved back a few governments ago to 55. Personally I don't get the fuss (though certain regulars on here can still claim to be outraged...)

    ... and now is the only type of pension that cannot be transferred to DC as either a SIPP or cashpot.
    Your language is confused - a final salary pension isn't 'transferred to DC as either a SIPP or cashpot' (a SIPP is a form of DC pension, i.e. what you would transfer out to).

    On my part i have a life limiting condition
    The Royal Mail scheme, like many (all?) public sector schemes, has ill health provisions - have you checked them out? From the website (http://www.royalmailpensionplan.co.uk/section-c/leaving-scheme/deferred-benefits):

    Taking your benefits early due to ill health

    If, after leaving the Plan, you later find yourself too ill to work, you might be able to take your pension and lump sum early on the grounds of ill health. You wouldn’t have to wait until you’re age 55, provided we approve your application after considering the medical evidence. In these circumstances, we’d start to pay you your Age60 and Age65 pensions at the same time, without any reduction, along with your lump sums.


    and the pension i have with the Post Office is relatively small, if i was able to transfer to DC i could invest part and use the other for medical needs.
    Why on earth do you have a burning desire to chuck away an index-linked guaranteed income...?

    Whether or not people feel it is greedy
    'Greedy' isn't the word that comes to mind...

    the main thrust here is it is money we have earned and they have kept (interest?) and use and give us access to on their terms
    Contributions (the larger part coming from the company) were invested with the idea that those investments would pay for you and your colleagues' future pension benefits. Your apparent belief that a DB scheme is a conspiracy against the individual member is rather silly to be honest - the reason why the government nationalised the pension fund before privatising the company is because (as with most DB schemes) the actuarial estimates from 20-30 years back about how much needed to be contributed to pay for future pensions didn't (don't) stack up in hindsight - and being DB, it's the sponsoring employer that picks up the tab. With the government taking on the liabilities directly however, Royal Mail in the private sector can't be laid low by historic pension debts.

    I have set up a workplace pension for a couple of companies in the last couple of years, they can opt out and invest their money where they feel meets their terms and needs, we did not get that.
    Erm, even leaving aside the fact the risk lays with the individual member (rather than, as with DB, with the employer), do you want to confirm the employer contribution rates for those AE schemes you've set up?

    I also did not receive a letter to tell me of the changes, in addition i was on the phone to them to ask if i could transfer to a PO DC pension in the months prior to the 2015 date and they never told me or advised me of the up and coming changes.
    Sounds like you had a lucky escape...
    Last edited by hyubh; 15-07-2017 at 4:18 PM.
    • grantie2u
    • By grantie2u 15th Jul 17, 6:38 PM
    • 16 Posts
    • 2 Thanks
    grantie2u
    Wow, lots of very bitter and twisted people here. It's still a fact whether you like it or not that ex RM employees who left their service some time ago did indeed pay into their pensions (perhaps the amounts on my payslips were imaginary) and have been frozen out of the pension freedoms. Very few comments have actually bothered to answer my query, the majority seemingly jealous individuals who clearly didn't have the foresight to make any provision for their own retirement, facts are facts people, like it or lump it, as the government have told us...
    • Heatherclark
    • By Heatherclark 15th Jul 17, 6:53 PM
    • 6 Posts
    • 2 Thanks
    Heatherclark
    Thank you again.
    If i was to start working in schools again, would i be able to transfer both PO and LGPS to the latest scheme (assuming that would be a DC as DB's are being phased out)

    Thank You
    • hyubh
    • By hyubh 15th Jul 17, 6:56 PM
    • 1,884 Posts
    • 1,399 Thanks
    hyubh
    Wow, lots of very bitter and twisted people here.
    Originally posted by grantie2u
    Erm...

    It's still a fact whether you like it or not that ex RM employees who left their service some time ago did indeed pay into their pensions
    That doesn't mean the employee contribution anywhere near actually came to fund the pension benefits promised. Saying 'but it's my money!' without recognising this is a very one-eyed view of things...

    and have been frozen out of the pension freedoms.
    Did you read my response to you? I actually agree it was reasonable not to predict that the historic Royal Mail scheme would be turned into an unfunded one. However, inferring you are somehow a 'victim' because of this is a little silly. Sure you are unable to give up your pension - but it's a great pension, for the amount you actually put into it!

    Very few comments have actually bothered to answer my query
    The answer's negative... Admittedly I don't think I've seen a Royal Mail one, but there are several cases on the Pensions Ombudsman site where a member of the TPS or NHS schemes has complained about the transfer out ban, and all have been rejected.

    the majority seemingly jealous individuals who clearly didn't have the foresight to make any provision for their own retirement
    Huh? As I said when responding to your posts, we all think your desire to chuck away a public sector pension is very public spirited of you
    • hyubh
    • By hyubh 15th Jul 17, 7:03 PM
    • 1,884 Posts
    • 1,399 Thanks
    hyubh
    If i was to start working in schools again, would i be able to transfer both PO and LGPS to the latest scheme
    Originally posted by Heatherclark
    Assuming things stay the same as they currently are, you would be auto-enrolled into the LGPS again, and yes, you would have the right to transfer in your previous pensions within the first 12 months of starting the new job. This would also be on 'Club' terms, so assuming the Post Office pension was final salary, that would be a good thing were your final salary when with the LGPS to be higher in real terms than the final pensionable salary used to calculate your Post Office benefits. Conversely, transferring would be a bad thing if your final LGPS salary was less (since the value of the transfer in at the end would be less than if you had left the Post Office pension separate).

    That said, if you're thinking about getting a low-paid job at a school only as a staging post to transferring out all your various DB pensions to a DC arrangement... urgh, just check out the LGPS' (very good) secondary benefits (ill health, life cover...)

    (assuming that would be a DC as DB's are being phased out)
    They are not being phased out in the public sector.
    • Heatherclark
    • By Heatherclark 15th Jul 17, 7:35 PM
    • 6 Posts
    • 2 Thanks
    Heatherclark
    Thank you
    But still confused: My final salary PO was higher than the LGPS, but a new job would pay more annually than either of them did, so if I have them both transferred, then the 'one' pension could become a DC? I must explain that it is ill health that has thrown me into this position and the potential for treatments not on offered on the NHS.

    Thanks
    • Silvertabby
    • By Silvertabby 15th Jul 17, 7:45 PM
    • 1,508 Posts
    • 1,797 Thanks
    Silvertabby
    If you were to re-join Local Government, then you could ask to transfer your PO benefits in. You would then be given some figures to look at before you decide if you want to go ahead or not.
    • hyubh
    • By hyubh 15th Jul 17, 8:03 PM
    • 1,884 Posts
    • 1,399 Thanks
    hyubh
    But still confused: My final salary PO was higher than the LGPS, but a new job would pay more annually than either of them did
    Originally posted by Heatherclark
    It's the rate of pay that's important for part timers in most final salary schemes. Also keep in mind your old Post Office pension has (I think - best to check) revalued by CPI ever since you left.

    so if I have them both transferred, then the 'one' pension could become a DC?
    You could then leave the LGPS a second time and transfer out to a DC arrangement, yes. However, none of what you say about your situation, added to the fact you have had a tendency to conflate how DC and DB pensions work, convinces me this would be a good idea.

    I must explain that it is ill health that has thrown me into this position and the potential for treatments not on offered on the NHS.
    You should still look at the actually-existing ill health options for your various pensions first. That said, rejoining the LGPS would put you in a better position on the issue than as a deferred member, as you currently are.
    • atush
    • By atush 15th Jul 17, 9:54 PM
    • 16,236 Posts
    • 9,909 Thanks
    atush
    Wow, lots of very bitter and twisted people here.
    Nope, just one.
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

4,586Posts Today

9,253Users online

Martin's Twitter