Help with what to do transferring a Royal Mail pension to LGPS

hewittinspain

I'm a bit stuck (actually very stuck)

I left Royal Mail earlier this year to work for the council, I was mainly in a defined Contributions scheme from when I started in 2013 to 2018 which is where the bulk of the money is in, it then changed to a cash balance scheme from 2018 to 2024 and then a collective plan from 2024 up until I left.

What idiot guide steps do I need to take? I've downloaded a transfer pack from LPGS but as yet not filled anything in as I have no idea where to make my first move?

Thank you

xylophone

I typed how to transfer benefits in rmdcp and cash balance and collective to lgps into Google - there was a great screed of guidance - you may find this helpful as a start?

Silvertabby

How long have you been in the LGPS? I ask because there is usually a 12 month cut off for at least starting the transfer in process.

If you have been in for less than 12 months, then complete the transfer pack. Your LGPS will then advise you how much LGPS pension the transfer value of your RM benefits will buy you. At that point, you can either say that you want to go ahead with the transfer, or leave your benefits with RM.

hewittinspain

https://forums.moneysavingexpert.com/discussion/comment/82189750#Comment_82189750

Ive been with the council since January so I need to get my skates on. Do I need to get exact figures with what I have in my Royal Mail Pot first before I contact LGPS for advise? Am I hoping that the transfer value will be roughly the same as what my royal mail pot is worth?

Silvertabby

The transfer pack you have downloaded should include a form authorising your LGPS to request the transfer value from RM on your behalf. But if in doubt, give your LGPS a ring to check.

RM pensions are not a member of the public sector club scheme, in which transfers are made on an (almost) like for like basis. Instead, RM will calculate the transfer value of your benefits as a cash sum. The LGPS will then convert that into a CARE DB pension with them.

Marcon

RM pensions are not a member of the public sector club scheme, in which transfers are made on an (almost) like for like basis. Instead, RM will calculate the transfer value of your benefits as a cash sum. 

I don't think OP has any benefits with RM which are defined benefit (those had closed to new entrants before OP joined RM in 2013), so although this sentence is entirely accurate, it'll just add another level of confusion!

Do I need to get exact figures with what I have in my Royal Mail Pot first before I contact LGPS for advise? Am I hoping that the transfer value will be roughly the same as what my royal mail pot is worth?

As @SilverTabby has explained, it would normally be for the LGPS to request current transfer values from Royal Mail. Your LGPS will then send you a quote based on the figures RM supply to them, which will be roughly the amount in your RM pots . The values aren't 'cast in stone' because your RM pensions will remain invested and will fluctuate from day to day, so if you do transfer, the LGPS benefit you finally receive will be based on the actual amount of cash paid over by RM.

Just to be clear - your LGPS won't give you advice; they can only provide information, so any decision on whether to proceed with the transfer will be entirely yours.

Silvertabby

The main difference, as far as OP is concerned, is that the RM benefits will be expressed as just a total sum of money, whereas the LGPS CARE benefits will be shown as an annual index linked pension.

This can be confusing to anyone not used to how pensions work, who may be dazzled by a lump sum of many Ks compared with a much lesser annual pension, but we are here to explain (not advise!) once you receive your transfer quote.

hewittinspain

https://forums.moneysavingexpert.com/discussion/comment/82190330#Comment_82190330

Thank you for your advise.

So if I do go ahead with a transfer into the LGPS then what would I need to look for in regards of whether it's worth it? I'm not looking to take money out of it until I get to 67.

So I've been told I do transfer it into the LGPS then it won't add to the pot but I'm not sure I'm clear on what's meant by that.?!

Marcon

So if I do go ahead with a transfer into the LGPS then what would I need to look for in regards of whether it's worth it? I'm not looking to take money out of it until I get to 67.

You have a choice between the certainty provided by benefits in a DB scheme (the LGPS), versus the uncertainty-but-opportunity/flexibilty of a DC scheme (your RM benefits). There isn't a magic answer or formula to help you decide (that would be too easy…); it comes down to personal preference.

So I've been told I do transfer it into the LGPS then it won't add to the pot but I'm not sure I'm clear on what's meant by that.?!

There won't be a 'pot' if you transfer your RM benefits to the LGPS. The money transferred in is used to provide extra 'defined benefits' (as opposed to some sort of 'standalone pot') within the main LGPS.

xylophone

Part of guidance referenced in my previous - it appears that you will need to contact three different administrators.

• RMDCP (Defined Contribution): The Royal Mail Defined Contribution Plan wound up and transferred its assets to the Legal & General Mastertrust. You will need to contact L&G to get your CETV. [1, 2, 3, 4]
• Cash Balance Fund: This is part of the Royal Mail Pension Plan (RMPP) (usually administered by Capita). Contact the RMPP Pensions Service Centre for your CETV statement. [1, 2]
• Collective Plan (RMCPP): This is the UK’s first collective defined contribution scheme. Contact the Royal Mail Collective Pension Plan administrator to request your transfer value. [1, 2]

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82191057#Comment_82191057

Definitely sounds like something to let the LGPS sort out if you can.