Defined Benefit pension transfer advice

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81921736#Comment_81921736

Yes, it has a guaranteed lump sum value at the end per your 1:59 post which is in part dependent your pensionable pay and duration of service

DC has no guarantees at all and in theory could be worth £0 if the world collapses. DC is in no way directly linked to how long you worked for the company or your pensionable pay only how much you paid in and how the investments went.

Not saying is needs advice, just that its materially difference from a DC. Its a section of a DB scheme

xylophone

Yes, it has a guaranteed lump sum value at the end per your 1:59 post which is in part dependent your pensionable pay and duration of service

I can see your point - in effect, the defined benefit is that a member in the cash balance scheme is guaranteed at least a minimum sum from the scheme when he comes to take the pension.

What he is not guaranteed is at least a minimum amount of pension income. At the point of claiming the pension, his options are exactly the same as those of a person in a standard DC/ money purchase arrangement?

Presumably that is why the CUW booklet refers to taking guidance from Pension Wise (which would not be appropriate fro a person in a defined benefit final salary/ CARE scheme)?

LHW99

https://forums.moneysavingexpert.com/discussion/comment/81921736#Comment_81921736

Is this, the problem:

"You have flexibility about how to use this cash sum when you retire"

Is the implication that you can't have that choice until the point of retirement? (Just a question,I have no idea)

xylophone

(Just a question,I have no idea)

I don't either - As Marcon said, the matter needs to be clarified with the Administrator.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81922257#Comment_81922257

I think all of this needs to be clarified directly with the scheme. RM has a wide range of different pension arrangements - and plenty of good advisers to help ensure they are run correctly, so the scheme's administrators should be well placed to explain the correct position to OP. Googling and speculating isn't a substitute for hard knowledge of the scheme's rules!

dasherman

https://forums.moneysavingexpert.com/discussion/comment/81921755#Comment_81921755

The section F part ofthe RMPP website says the same: https://www.royalmailpensionplan.co.uk/section-f/life-events/transferring-out/

It's perhaps important to realise that members of sections A/B, C and F will all have Cash Balance benefits, as long as they were RMPP members sometime between2018-2024.

Those in sections A/B and C, will have joined RM before 2008 and have final salary pension up to 2008 and average salary 2008-2018, when the DB scheme closed and was replaced by the Cash Balance.

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.

The Cash Balance scheme closed in October 2024 to be replaced by the RM Collective Pension Plan, with the option to join Nest instead.

bunman1

https://forums.moneysavingexpert.com/discussion/comment/81921755#Comment_81921755

Thanks again to all who have commented. 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…

bunman1

https://forums.moneysavingexpert.com/discussion/comment/81923762#Comment_81923762

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

Marcon

Thank you so much for taking the time to update. It's really appreciated - and useful for next time someone asks the same thing about the RM Cash Balance Plan!

snowlaser

https://forums.moneysavingexpert.com/discussion/comment/81920648#Comment_81920648

Just be careful that it really is exactly £77k it pays out and not something like £77k plus inflation between now and then, or even more.