Post Office Pension - Refusal of lump sum.

bootledylan

I applied to take my small pension (from working at the post office for a couple of years in the 1990s) as a lump sum from the Royal Mail and have been told that this is not possible because the pension contributes a small portion to the State pension. Has anyone else come across this?

jem16

bootledylan wrote: »

I applied to take my small pension (from working at the post office for a couple of years in the 1990s) as a lump sum from the Royal Mail and have been told that this is not possible because the pension contributes a small portion to the State pension. Has anyone else come across this?

You cannot take your pension as a lump sum as it's a Defined Benefit pension and not covered by the new pension rules. As it is a contracted out scheme then what they are saying is partly correct but that's not the reason you cannot do what you want to do.

You would have to transfer out of the Royal Mail scheme and into a Defined Contribution scheme to do what you wanted. This is probably not a good idea though as most defined Benefit pensions are best left where they are except in special circumstances.

xylophone

Information about your scheme here

http://www.royalmailpensionplan.co.uk/119/rmsps-pensions-brochures

They contain information about GMP.

Have you reached Scheme Pension Age, or are you trying to access your benefits early on an actuarially reduced basis?

If so, it may be that your benefit is being subjected to a GMP test as in the Civil Service scheme?

http://www.civilservice.gov.uk/wp-content/uploads/2011/09/4_2_tcm6-1534.pdf

where_are_we

You will be able to access 25% of your pension as a tax free lump sum at 60 in addition to a small annual pension which increases with inflation each year.There is a spouse`s pension and it is all underwritten by the government.This is worth much more than any lump sum even if you could get it.

bootledylan

They contain information about GMP.

Have you reached Scheme Pension Age, or are you trying to access your benefits early on an actuarially reduced basis?

If so, it may be that your benefit is being subjected to a GMP test as in the Civil Service scheme?



Civil Service scheme is interesting. I will forward it to my contact in RMP and see what he says. (I have read royalmail site). Thanks again

bootledylan

where_are_we wrote: »

You will be able to access 25% of your pension as a tax free lump sum at 60 in addition to a small annual pension which increases with inflation each year.There is a spouse`s pension and it is all underwritten by the government.This is worth much more than any lump sum even if you could get it.

I am aware of this. I am 56 and the pension is currently worth 660 per annum

bootledylan

where_are_we wrote: »

You will be able to access 25% of your pension as a tax free lump sum at 60 in addition to a small annual pension which increases with inflation each year.There is a spouse`s pension and it is all underwritten by the government.This is worth much more than any lump sum even if you could get it.

I am a carer for my disabled wife and in receipt of income support and carer's allowance. Correct me if I'm wrong but if I get a small pension payment, it will be deducted pound for pound from my benefits leaving me no better off.

SallyG

A little light background GMP reading................
https://www.barnett-waddingham.co.uk/comment-insight/blog/2014/08/18/what-is-a-gmp/

Would a lump sum pension payment be disregarded for your benefits?

jamesd

bootledylan wrote: »

I am a carer for my disabled wife and in receipt of income support and carer's allowance. Correct me if I'm wrong but if I get a small pension payment, it will be deducted pound for pound from my benefits leaving me no better off.

The pension is income so it will be taken into consideration for your eligibility for means tested benefits like income support. This can happen from its normal retirement age or failing that from the date at which you become eligible for Pension Credit.

bootledylan

SallyG wrote: »

A little light background GMP reading................


Would a lump sum pension payment be disregarded for your benefits?

I don't know (but probably), trying to swim one river at a time

bootledylan

jamesd wrote: »

The pension is income so it will be taken into consideration for your eligibility for means tested benefits like income support. This can happen from its normal retirement age or failing that from the date at which you become eligible for Pension Credit.

Found this out the hard way. I had another (even smaller) pension with Coral Racing. I took a lump sum of around 1200 and annuity payments of 147 per annum (12 per month). The lump sum did not affect my benefits but the monthly payments are deducted from my income support pound for pound. (I hope to cash in this annuity next April when the changes announced in the last budget come into force).