Royal Mail defined benefit pension

Hasselhoff

Please forgive my launching straight in but I did first try and read as many threads as possible but after a while the specific replies were so overlapping that it was difficult to grasp a base reply.

I am just over 55 and have a Royal mail defined benefit pension called nra 60. I asked for a statement of the plan and that has arrived.

The reason for the request is as I suspect some have used their pensions already, to help children in their 30's clear all of their debt so they can work to live and not live to work. More so, I remember working all day and all night hardly ever seeing my daughter, as did my wife and I want better for my grandchildren.

My hope was to surrender the pension, pay off their debt and then fund myself for several years building up through my own investments to rebuild a cash fund .

The Royal mail Lady explained it as it was not a surrenderable plan in the way I wished to use it, even if I transferred out from Royal Mail and into a private scheme.

I know some will see this as not the best practice for my pension and I respect that but on the emotive I do not want for my grandkids what my daughter had in regards to fleeting visions of parents who always seem to be working.

It's been suggested I could take 25% tax free lump sum and then a pensionable amount each month but I will still have to transfer out of the scheme and the monthly amount would not be enough to cover all bills

Any advice would be appreciated but please do not be rough with me

Andy_L

Hasselhoff wrote: »

It's been suggested I could take 25% tax free lump sum and then a pensionable amount each month

That is the only way to extract the value of the pension (other than some fraudulent scams run by overseas criminals that will leave you with no money & a big bill from the tax man) however, as

Hasselhoff wrote: »

the monthly amount would not be enough to cover all bills

then, unfortunately, you cannot achieve your goal of

Hasselhoff wrote: »

help children in their 30's clear all of their debt so they can work to live and not live to work.

Would taking the pension as normal from the Post Office rather than transferring it provide you with enough income to cover your bills & the excess used service your children's debts rather than paying them off?

Do your children want you to do this or would they rather you enjoyed your retirement instead of living in poverty for their benefit?

xylophone

Are you still working for Royal Mail?

Hasselhoff

Hi Andy and thanks for your speedy reply.

Post office pensions have been transferred away from post office pensions and is now managed by the capita group and the level of assistance is similar to visiting the United States and dealing with the immigration officers, the lady's phone demeaner was one that you would think I am taking money from her purse and not discussing my own.

The daughter and son in law are not aware I am seeking to do this as I would not like to promise something without having it in place

Hasselhoff

Thanks xylophone for your reply. I stopped working for them after 17 years in 2001 and the pension remained with them

hyubh

Hasselhoff wrote: »

Post office pensions have been transferred away from post office pensions and is now managed by the capita group

Hasselhoff wrote: »

I stopped working for them after 17 years in 2001 and the pension remained with them

It would appear you are in the old Royal Mail scheme that George Osborne nationalised and converted into a pay-as-you-go unfunded arrangement:

https://www.royalmailsps.co.uk

If so, transferring out to a money purchase arrangement is not possible (same as Teachers, NHS, civil service, police, fire, etc.):

https://www.royalmailsps.co.uk/im-not-receiving-my-pension-yet/i-want-to-transfer-my-benefits

Basically, there was an inverse relationship between the company being privatised and the status of the pension fund (the company would never have got sold with a big legacy DB scheme still on its back, and requisitioning its assets for short-term gain as part of 'solving' this was clearly far too tempting)...

xylophone

It would appear you are in the old Royal Mail scheme

I think you are right so have deleted post relating to transfer out of RMPP (https://www.royalmailpensionplan.co.uk/section-ab/leaving-rmpp) to a DC Scheme to save confusion.

The section a/b RMSPS booklet says


You can only transfer your RMSPS benefits to another defined benefit type scheme i.e. one where your pension is based on your salary and service in the scheme. If you have any benefits built up from 1 April 2012 in the RMPP, you may be able to transfer these to any other registered pension scheme.


There already seems to be some confusion about the pension

The Royal mail Lady explained it as it was not a surrenderable plan in the way I wished to use it, even if I transferred out from Royal Mail and into a private scheme

and

It's been suggested I could take 25% tax free lump sum and then a pensionable amount each month but I will still have to transfer out of the scheme

It is possible to take a RMSPS scheme pension early (from age 55) but with actuarial reduction.

But this would not involve transferring out of the scheme?

https://www.royalmailsps.co.uk/im-not-receiving-my-pension-yet/i-have-benefits-in-the-scheme/when-can-i-take-my-benefits

"You can take your benefits at any time after age 55 if you have left Royal Mail’s employment. Benefits taken before your Normal Retiring Age (see below) will be reduced for early payment."

Hasselhoff

Thank you hyubh and xylophone

Yes it appears I am in the older one pre privatisation so it is locked as a defined benefit and can only have two options of take as a standard pension or a percentage tax free and a pension

The other reason for seeking to remove it from royal mail is I have my dependent, should anything happen, as my daughter.

However, RM class a dependent as a married partner or civil law partner or child under the age of 18. I am not married or in a relationship therefore if something was to happen, the fund would keep my pension as my daughter is 33. I only found this out when the pension plan came through

xylophone

Are you currently in employment and contributing to a pension?

Hasselhoff

Not currently in employment and that pension has not been added too since I left in 2001

xylophone

Are you currently on means tested benefits?