Anotherthing.
The figure RPI + 0.5% is the one dreamed up by NATS to cap your pensionable pay - not any further pay rises. Its based on nothing - its just the number they want to use to reduce your final pension by.
So any negotiated pay rise - e.g RPI + 1.5% (the figure NATS and the acturies use to calculate the liability of the fund) - will only contribute to the pension fund to the tune of RPI + 0.5%
Any pay scale increase will count fully.
So when you use the modeller put in your current pay. Then you will see some boxes that allow you to add in projected pay increases due promotion or whatever over 10 year gaps. Add in to these boxes the difference between your current pay scale and what it will be in the next 10 / 20 years etc as per the pay scale you are on.
Now this is where it gets wooly. Put in the figure you think your pay will be negotiated to rise by between now and retiring.
Use + 1.5% first as this will produce the figures NATS use.
The calculator will now show a screen with your final salary at NRD and what your pensionable salary will be. In box a they will be the same and in box b they'll be different. It will also show your annual pension in both boxes based on those figures.
If you want to try +2.5% - thats what we've had on average for the last 10 years. People will try and tell you that we've nothing left to sell / WP to negotiate. But if you all really think nothing will change between now and your retirement that will affect WP then go ahead. I don't.
Now even more wooliness. The NATS modeller assumes a max pensionable salary of £117000 (or there abouts) and so any pay above that won't count to pension anyway. So for all you new(ish) guys out there with loads of time to run in the scheme (30+ years) it will show that actually the difference between the 2 is marginal and you'll think great - I'm not losing out.
WRONG!!!
Take the figures it gives you them in the CAAPS modeller on their
website. It appears to make assumptions on the SLA increasing between now and being 60 and produces much different and scarier figures.
You can also use this to work out a difference in your tax free lump sum and reduced pension.
Worth doing.
I'm 35. Been in the scheme 15 years. If I retire at 60 and take my max lump sum I'll be £45k worse off lump sum wise with a £7k difference in my pension!!
Does that sound good???
Hope that clears it up. If not ask again - no such thing as a silly question where all this is concerned.
Also get everyone you know to try the figures for themselves.