ROYAL MAIL PENSION QUOTE AT 55 DONT UNDERSTAND

dasherman

https://forums.moneysavingexpert.com/discussion/comment/81925540#Comment_81925540

Many RMPP members will have Cash Balance amounts of more than £30k, but it will obviously depend on the individual and how long they paid in and what their pensionable pay was. Some, including myself, will have less.

This is what it says on the RMPP website about transferring:

"If the ‘transfer value’ of your pension is greater than £30,000,and you’re thinking about transferring to a defined contribution scheme, the Government now requires us to check that you’ve taken financial advice from such a firm or individual. Unless you are only transferring your AVC funds, your adviser must have permission to give advice on the transfer of ‘safeguarded benefits’ as described in s.53E of The Financial Services and Markets Act 2000(Regulated Activities) Order 2001. We will require your adviser to confirm this before we can make a transfer."

The experience of other members, is they did need an IFA to facilitate a transfer of over £30k.

oliel

https://forums.moneysavingexpert.com/discussion/comment/81925644#Comment_81925644

Yes i did so i took the cash lump sum from age 60 and get a monthly pension from it also. The age 65 benefit has not been touched.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81925652#Comment_81925652

Not when it's transferring just the cash balance section, which has no 'safeguarded benefits'. See

https://forums.moneysavingexpert.com/discussion/6659272/defined-benefit-pension-transfer-advice/p1

and note the helpful input on the last page confirming this:

Update for anyone who is interested. I queried with RM who confirmed that the scheme does not include any safeguarded benefits. I have informed Vanguard who have said that they will check themselves with the RM scheme administrator and then, assuming they are satisfied, will complete the transfer without me needing a Pension Transfer Advice Declaration :)

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81925540#Comment_81925540

No - see my answer above.

dasherman

https://forums.moneysavingexpert.com/discussion/comment/81932907#Comment_81932907

Going by the RMPP website section F members need an IFA with permission to advise on safeguarded benefits.

Which suggests the Cash Balance scheme is regarded as having such benefits.

Section F members will have joined the RMPP after April 2018 and will only have Cash Balance, they will not have any DB pension.

Its the experience of posties wanting to transfer their Cash Balance, whichever section they're in, that a relevantly qualified IFA is required when the amount is over £30k.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81932951#Comment_81932951

A member of the cash balance scheme has checked directly with Royal Mail, who have confirmed that the cash balance section does not have safeguarded benefits. My post above quotes the member concerned.

I agree that the website doesn't make that clear - possibly quite the reverse! - but it doesn't change the facts/rules.

dasherman

https://forums.moneysavingexpert.com/discussion/comment/81933034#Comment_81933034

Yet if you were to read the Royal Mail Chat forum, there are several instances of posties who have tried to transfer their Cash Balances and hit a brick wall.

They've been told by RMPP they need an IFA for transfers over £30k.

If they manage to find one that is suitably qualified, most won't touch it as it's not worth their time, and any that do, their charges are prohibitive.

Marcon

@dasherman you clearly work(ed) for Royal Mail so have access to their Chat Forum. Maybe put a note on suggesting any postie having trouble transferring (only) their cash balance benefits should ask the RM scheme to confirm in writing whether there are any safeguarded benefits and if so, what those safeguarded benefits are?

xylophone

Yet if you were to read the Royal Mail Chat forum, there are several instances of posties who have tried to transfer their Cash Balances and hit a brick wall.

They've been told by RMPP they need an IFA for transfers over £30k.

Poster Bunman1 originally posted

I have a Defined Benefit Cash Balance Scheme pension with a transfer value of c.£70k. I would like to transfer this to an existing SIPP. In order to do so, I need a suitably qualified advisor who can sign a Pension Transfer Advice Declaration for me.

To add a bit more detail, the pension is a Royal Mail pension that will pay out £77k in 8.5 years time. The current transfer value is £69k.

I fall into this category: "Those in section F will have joined RM sometime after 2008, paid into the RM Defined Contribution Plan for at least 5 years and then chosen to join the Cash Balance instead sometime after 2018". I left RM at end of 2021.

As suggested by some, I will go back to the scheme administrator and ask for clarification. I will post here when I hear back in case anyone is interested…

And this was his update

Update for anyone who is interested. I queried with RM who confirmed that the scheme does not include any safeguarded benefits. I have informed Vanguard who have said that they will check themselves with the RM scheme administrator and then, assuming they are satisfied, will complete the transfer without me needing a Pension Transfer Advice Declaration :)

Many thanks to all who took the time to offer opinions and advice.

According to the DWP's

Pension benefits with a guarantee
and the advice requirement

Safeguarded benefits are defined in legislation as pension benefits which are not money purchase
or cash balance benefits. In practice, safeguarded benefits are any benefits which include some
form of guarantee or promise during the accumulation phase about the rate of secure pension
income that the member (or their survivors) will receive, or will have an option to receive.

The Cash Balance Scheme offers no such guarantee or promise.

It does offer a member in the cash balance scheme the guarantee of at least a minimum sum from the scheme when he comes to take the pension.

The member might choose to buy an annuity with that sum of money. But there is no guarantee of the rate at which such income could be secured.

Therefore the scheme does not offer safeguarded benefits as defined in legislation so a member should not be required to take advice, regardless of the size of the amount available at retirement.

dasherman

And that is where things don't really add up, Xylophone.

He says he has a cash balance pot of £77k but would have only paid into it for 3.5 years(2018-2021). At a total contribution rate of 19.6%(6% employee, 13.6% RM) that would mean pensionable pay of about £130k. He certainly wasn't a postie!

To put it into some context, I was a postie for 30 odd years and paid into the cash balance for just over 5 years(2018-2023) before I left and mine is worth c.£26,500.

He has not mentioned how much his DC pot is worth, that he would have paid into before 2018.

Unless he actually joined RM before 2008 and has some DB pension?

RM pensions are quite convoluted due to various changes made over the years. Therefore I suspect Bunman1 may be a little confused about what he's actually got.