Royal Mail defined benefit pension

Hasselhoff

Thankfully no not for now as I have enough savings to push me over the limit but suspect in a year or two that might need to be addressed

Thanks everyone. It's been very helpful to hear it in a common sense way explained, rather than the Royal Mail way of over complicating it. Purely on the lack of dependent situation I'll probably move it from the post and into a safe but low risk external pension service

ffacoffipawb

Hasselhoff wrote: »

Thankfully no not for now as I have enough savings to push me over the limit but suspect in a year or two that might need to be addressed

Thanks everyone. It's been very helpful to hear it in a common sense way explained, rather than the Royal Mail way of over complicating it. Purely on the lack of dependent situation I'll probably move it from the post and into a safe but low risk external pension service

Post 7 above says you can only transfer into another defined benefit scheme which leaves you with the same problem I think?

You want a defined contribution transfer for flexibility but this appears not to be allowed.

xylophone

Thanks everyone. It's been very helpful to hear it in a common sense way explained, rather than the Royal Mail way of over complicating it. Purely on the lack of dependent situation I'll probably move it from the post and into a safe but low risk external pension service

But you can only move it into another defined benefit pension.

You cannot move it into a defined contribution/money purchase pension which is what you would need to access the flexibility you require.



As this pension is properly due and payable without actuarial reduction when you reach age 60, you would have to take it before having recourse to means tested benefits?

Hasselhoff

So you cannot take the 25% tax free then a monthly amount out either?

Miiade

Op sounds like you are in Plan b.

I think this gives you a guaranteed lump sum and pays out on a 40/80 accrual rate.

Call pensions in Sheffield and ask them for a benefits statement if you were to take it now.

You may be able to give up some annuals pension for more lump sum.

You need to contact Sheffield

Hasselhoff

As mentioned, I have spoken to them a few times and they have acted like lord of the rings thinking my pension is their "precious" I will try and have third time lucky but experience from them so far does not fill me with optimisn but thanks for your reply.

They have sent a full fund statement with the amount in the fund but it seems it is one of those as other posters have mentioned, that was tied up in a way that the freedoms for pensions was not going to apply to most governmental supplied pensions.

Miiade

Does the fund statement say

Annual pension at 60= x
Annual lump sum at 60 = x?

Hasselhoff

The yearly statement yes, the full plan yes. The full plan has no extras attached which I presume is based taking it before the peak at 60

It makes no mention of a 25% tax free option then monthly amount so as mentioned earlier, why pension freedoms have been offered to most, defined pensions which seem to be government services based, have been locked into your retirement age only with no flexibility or alternative use.

I'll phone capita later but this is starting to seem to be an inflexible pension.

Miiade

Op, yes this DB can only be transferred to another DB scheme

Your options are

1. Take at age 60
2. Take anytime between now and age 60 on a reduced basis, I think its about 5% a year
3. Transfer to another DB scheme

If you call Sheffield and just say “send me my benefits statements if I want to take the pension now”

Good luck with your decision

GunJack

Hasselhoff wrote: »

The yearly statement yes, the full plan yes. The full plan has no extras attached which I presume is based taking it before the peak at 60

It makes no mention of a 25% tax free option then monthly amount so as mentioned earlier, why pension freedoms have been offered to most, defined pensions which seem to be government services based, have been locked into your retirement age only with no flexibility or alternative use.

I'll phone capita later but this is starting to seem to be an inflexible pension.

It's a Defined Benefit pension, yes they were designed to be inflexible. It is designed to pay you an income for life, with a built-in lump sum of (probably) 3x the annual pension. Because there is no "pot" of money associated with it, you can't transfer out to a "pot of money" type pension. It may be an idea if you read up on the difference between DB and Defined Contribution (DC) schemes, it may help your understanding...

edit:- if you took it before the scheme's Normal Retirement Age (NRA) then the pension would be REDUCED by x% per year early you're taking it, not enhanced as you seem to infer it would be above...