Just traced an old RoyalMail SPS DB Pension

DRS1

Yes they clearly want people to take their age 60 benefits at age 60.  Not even a sniff of "you could postpone them till later".  Still they also say they will write to you before age 60 to ask what you want to do with those benefits.  I guess the OP moved and didn't tell them (though if anyone should be on top of a change of address you'd think it would be the Royal Mail).

Hoenir

DRS1 said:

(though if anyone should be on top of a change of address you'd think it would be the Royal Mail).

Not the individual themselves? 

Fermion

Thanks for all the information - we moved house in 1996 3 years after I left the Post Office and yes I should have notified them of a change of address. I was aware that you were allowed to swap a portion of your pension for a lump sum. 

Disappointed if they don't pay for retrospectively for missing years since I  turned 60 but if that's what the pension scheme rules are I will have to live with that. At least some extra pension now is better than nothing. 

I'll wait to see what figures they come up with, although the scheme is managed by Capital (like my wife's TPS scheme) so it may be difficult process and take a long time.

Ordinary_Yet_Unique

Would be interesting if you update us with the figures when you obtain them. 

Marcon

Cobbler_tone said:

Dazed_and_C0nfused said:

Fermion said:

Would appreciate some advice.

Following Martin's Money programme topic, I've just traced an old RoyalMail SPS DB. I'd forgotten that that I worked for the Post Office for close to 3 years from 1990-1993. I contacted the RoyalMail SPS Pensions helpline number who confirmed I was in the scheme and they are preparing the paperwork, although they said this may take some time. This is the pre 2012 scheme based on 1/60th and uses RPI. The scheme retirement age was 60. I believe some of the benefits can we converted to a lump sum.

I was eligible to draw the benefits in March 2009 (I'm now 76). I just wondered how DB schemes like this handle late retirees(16 years in this case) - in particular, how would they handle 16 years of deferred pension payments? Would they apply RPI increases and pay these as a single taxable payment? I presume I would still be able to take 25% of the benefits as tax free lump sum?

Has anyone else been in this situation?

Most DB pensions don't pay a 25% tax free lump sum (TFLS) though.

I always feel fortunate when I read this. Mine pays anything between 0-25%. 

So does this one. Taken from the Section C booklet a minute ago:

A tax-free lump sum option

On taking your benefits, you are able to give up part of your pension in exchange for

a tax-free lump sum of up to 25% of the total value of your benefits (including any

Additional Voluntary Contributions (AVCs)).

Plenty of DB schemes give the option of taking tax free cash up to HMRC limits - it's just expressed differently.

Marcon

dasherman said:

DRS1 said:

It will be interesting to see what they say about arrears of pension.  If they don't pay arrears I wonder if there is a late retirement factor which may kick in?

I know I'm not quoting the scheme rules here, but for what it's worth both the RMPP and RMSPS websites have a few 'how to videos' explaining how the two schemes work together.

The RMPP has one that explicably states 'if you don't take your benefits at 60 you'll miss out on any payments between 60 and when you take them'.

https://www.royalmailpensionplan.co.uk/section-c/your-pension/understanding-your-pension/

*The RMSPS and RMPP are essentially the same scheme, except they're administered by different organisations.

That certainly is what the video says - but it is at odds with the booklet, which says the following (a provision common in many DB scheme rules):

Any payment of benefit that is not claimed within six years of the due date may be forfeited.

I don't want to raise false hopes, but think there's a chance OP might get some backdated payments. Happy to be corrected if anyone knows for sure?

OP, if you do get a lump sum which includes any backdated years and it pushes you into a higher rate tax bracket, you can ask HMRC to tax you on what is known as the 'statutory basis'. That just means you are taxed as if you'd received the payments in the tax year they became due for payment. The scheme will need to give you a year by year breakdown and you then ask HMRC to do the necessary. That must sound horribly complicated but isn't as bad as you might fear! More info, should you need it, if you read https://forums.moneysavingexpert.com/discussion/6610482/civil-service-pension-tax#latest

Fermion

Ordinary_Yet_Unique said:

Would be interesting if you update us with the figures when you obtain them. 

I will do that - thanks everyone for all the useful information

Fermion

Quick update - I've been in touch with the Royal Mail SPS Pension help line (managed by Capita).
They checked my pension records but they say that my Pension Account is flagged as "Without Liability" - I queried what this meant and the agent said that this means either I transferred it or it was withdrawn. 

This has got me confused - I was with the Post Office for over 2 years so wasn't able to withdraw and my next pension scheme was a DC Money Purchase scheme and wouldn't except DB transfers. The agent has raised a case for Capita to provide further details of the specific Transactions resulting in that status.

I did just wonder that as the original Royal Mail SPS scheme was funded by the Government whether there was a time limit for claiming - I know the government introduced a 30 year rule for some Gov pension schemes in the 2023 Finance Act but I thought that referred to claims time limits not contact time.

DRS1

Well that is disappointing.  Hopefully they will clear up what has happened.

I don't know what that 30 year rule is but as @Marcon mentioned up above many schemes have a 6 year time limit for claiming benefits.  Maybe you have fallen foul of that?

Silvertabby

I wonder if the fact that you were over 75 had something to do with it?  Most schemes do pay out to over 75s, but some odd rules applied when your record was deferred over 30 years ago.

Back in my early LGPS days we would occasionally do a sweep of old deferred (and frozen refunds) records for those approaching 75, and try to trace them.  I seem to remember my then boss saying that if we couldn't make payment by age 75, then that would be the end of it.