Our DC retirement modeller is designed to show members what their pension pot might be worth when they retire. Plus, they can see the different ways they can choose to use that money. 

The modeller is available now and can be accessed in the ‘Planning for the Future’ section when members log in to their online myRPS account.

The tool is specifically designed for anyone paying into the Industry-Wide Defined Contribution (IWDC) pension. Those paying into a final salary pension should use the separate Defined Benefit (DB) modeller which will be online soon.

What does the DC retirement modeller do?

The DC retirement modeller works out how much a member’s total pension pot could be when they retire by taking into account the following:

• current age
• salary
• current personal retirement account balance
• Target Retirement Age (TRA)
• contribution rate (this is set automatically depending on which section they’re in)
• any additional voluntary contributions they’ve made (AVCs)
• whether their fund choices are low, medium or high risk

It also shows the ways a member could choose to take their money:

• as a cash lump sum
• by buying a policy using funds from their pension to give them a regular income. This is known as an annuity
• by reinvesting their pension pot and taking a regular income directly from it. This is known as pension drawdown 

Importantly, it can illustrate the impact on a member’s pension pot and potential benefits at retirement if they make changes to their Target Retirement Age, contributions and/or fund choices.

Will the DC retirement modeller tell members if their pot will be large enough?

The DC retirement modeller will show a member how much their total pension pot could be when they retire and how much they might receive from it each year, depending on how much they choose to take as cash or pension. To work out whether this is likely to be enough, they can compare their total to the Retirement Living Standards.

These nationally recognised standards show that an individual will need between £10,200 and £33,000 per year when they finish work. This depends on the type of lifestyle they wish to lead – minimum, moderate or comfortable.

What should members do with their DC retirement modeller results?

Once they have their DC retirement modeller results, members can decide whether to take any further action.

For example, if they don’t think that their pension pot will be large enough to give them the life they want in retirement, they may choose to:

• change their Target Retirement Age (TRA)
• change their funds and investment risk level (low, medium, high), or
• start saving more money, by making additional voluntary contributions (AVCs)

The modeller will let members see what impact these changes could have.