Tories to look at pensions. [Archive]

exscribbler

28th Nov 2008, 23:35

I retired some 4 years ago on half my then salary since when I've had a small increase. This is what the private sector calls a gold-plated pension. What they seem to forget is that I paid 6.75% of my salary into that pot and my employer a little more.

When the Teachers' Pension Scheme was first opened, Churchill asked that teachers contribute towards it for a couple of years to get the fund going and then the scheme would become non-contributory. The Emmott Committee recommended that the scheme be funded by HMG; had that been done, by 1972 it would have stood at £2000 million!

While acknowledging that my pension is more than some people get for working full-time for 40 hours a week, I must note that those in the private sector were very happy with their money-purchase schemes when the stock market was doing well.

They had no sympathy for public servants who pointed out the anomalies in their final salary schemes, not least that their funds seemed to consist of notional amounts and that pensions were being paid from superannuation income with no investment whatever.

Now the situation is reversed, they're squealing about the unfairness of it all. Hmm... :(

Nostrinian: it wasn't just the RN who was hit with pay reductions (all public servants had a cut of up to 15% in Snowden's 1931 Budget) but the cuts hit Jolly Jack that much harder because of the reduction in allotments and some sailors couldn't keep up with payments.

Melchett01

29th Nov 2008, 09:11

I would have thought (hoped???) that any major changes like scrapping / significantly re-structuring of the AFPS would be done in a similar way to the implementation of AFPS 05 i.e. if you're already in and serving on that scheme at a specific date, then you retain the benefit, but all personnel joining after that date go on to a new scheme. And what if you're already drawing your pension.

However, as Spheroid rightly states, this will be the final nail in the coffin for the Forces. As it stands, there are many experienced personnel, officers and NCOs who are effectively kept in by the 'pension trap'. Whilst not ideal to have your personnel motivated purely by money, you cannot get around the fact that it means a significant level of experience is retained. If you then open the trap door, you give people no incentive at all to stay and you can then watch your key personnel walking.

This is going to be a minefield, and ultimately, a real indication of the government's (either side) alleged commitment to the forces.

anotherthing

29th Nov 2008, 09:58

Melchett01

I'm ex-forces so really hope you guys keep you pension as is... you deserve it. I see the pension as deferred pay.

However, it might be worth a quick look at the ATC issues section and check out the NATS Pensions thread.

We have currently got a 'gold plated' pension scheme, that was protected by deed of trust when NATS was part privatised in 2001.

NATS is responsible for the majority of UK airspace and as such is crucial for the economy, security and defence. If NATS employees were to strike, it is fair to say the UK would economy would collapse (even further).

HMG still owns 49% of NATS.

However, our pension is now under threat and it looks like it will be degraded, even for those people who are already in the scheme.

Be very wary of believing what anyone tells you when they say your rights are protected, and make sure you have a full understanding, otherwise they will try to screw you.

Good luck... I hope this thread is just conjecture and has no real substance

MaroonMan4

29th Nov 2008, 10:15

So,

Just let me get this right, because I am having some real dificulty in getting my head around this. Ever since 1992 and the last recession the civilian private sector has enjoyed astronomical growth in all areas, with wage rises, bonuses and associated Terms and Conditions that the military could not achieve.

No bonuses, no company cars, no company telephones and no 'contract award' deals. The private sector was happy and content looking down at the Public Sector knowing that the salaries they were on and their pensions linked to the stock exchange made the military, police, fire and nurses the 'poor cousins' in career choices.

How many times in the city have people looked down their nose at me in a bar in the past when they find out that I am 'just an officer' in H M Forces. The arrogance and the noveau wealth has never worried me as I have always been very proud of my profession and I see wealth not purely in monetry terms. When I still talk to my friends in the city they still find it difficult to see why I worry about my pension when they are still living comfortably off their investments made from their bonuses over the last 10 years (and I re-itterate, not just the 'fat cat' bonuses - but normal on the shop floor middle and junior management bonuses). They do not worry about their pensions as they have sucked every last bit of money out the system to prepare them for the future-which has resulted in the Govt (i.e. you and I) bailing them out. This is not just the Financial Services Industry, but retail and to a lesser extent commodities.

However, and this is my point, why all of a sudden when the private sector no longer gets its bonuses (not just the fat cat ones - the junior manager level etc), no longer gets the company car or the mobile or the corporate wining and dining that the private sector then starts to look over the fence and want a slice of my pie and my investments that I have always known will look after me when my flying days are over and therefore do not need to go for a second career in the city trying to earn my fortune.

If you remove the pension in its current state, then as per CEA, you will lose the top quality and best serving officers, NCOs and men/women from all three services as they will see that there is no financial reason to stay.

There would be every 'push' into civvie street from all of the negative aspects of Service life that are discussed so often on this forum, combined this time with very little 'pull' to remain in the services. Serving for love of Queen and country can only go so far.

From the recruiting perspective, who are we trying to kid - the future armed forces youth of today are all over Ts&Cs and they will be able to quickly weigh up the limited fianancial opportunity that a full career will offer in comparison to the earning potential in the private sector.

Bonuses, company cars, private health schemes, re-location allowances, mobile phones, corporate entertainment have not gone - just put on hold and they will return to attract the real high flying youngsters of the future. Remove the forces pension scheme and try and align it to a private sector pension scheme will result in more people leaving (especially once they have 'ticked their flying/op tour box') and possibly result in a lower calibre of individual joining the forces as the lure of the private sector is too enticing in comparison.

Have I got this wrong, what am I missing?

AllyPally

29th Nov 2008, 10:28

Exscribbler.

Your quote below shows how out of touch the public sector is with what is happening in the real world.

"I must note that those in the private sector were very happy with their money-purchase schemes when the stock market was doing well."

This is pure drival - before our unelected PM destroyed the private sector final salary schemes the UK pension sector, both public and private, was one of the best in the world. Once Brown had destroyed the final salary schemes companies moved pensioners into money purchase schemes which, unlike public sector pensions, give no guarentee of pension.

Why should the public sector not suffer the same as the private and be moved onto a money purchase scheme? Afterall public sector jobs are more secure than private sector jobs - I have yet to hear of a single public sector worker being made redundant recently.

This nettle has to be grasped now before nearly all tax revenue goes into paying unfunded public sector pensions. All new start public sector employees should be offered money purchase schemes with the employer contribution funded at the time by HMG.

AP

Al R

29th Nov 2008, 10:57

It is simplistic to suggest that this is simply a measure of g’ment support for The Forces. The pension of 1 civil servant who earns say £30,000 takes the taxes of 2 working people (with the same income) to simply pay for it. Public pensions, whether you like it or not, are unsustainable in the medium term. It has little to do with g’ment faith in the military, little to do with who looks down their nose at who.. that’s just the way it is. We don’t have the projected income to continue to fund them, that’s the bottom line.

This might make interesting reading; from the Telegraph.

Public sector pensions: Just how generous are they? - Telegraph (http://www.telegraph.co.uk/finance/personalfinance/pensions/3534233/Public-sector-pensions-Just-how-generous-are-they.html)

BEagle

29th Nov 2008, 11:23

How does the UK Armed Forces Pension Scheme compare with those of other countries' military?

I only ask because a CF colleague was astonished at the low rates of RAF pensions for those who have served their time, compared to the rates in Canada.

As for 'final salary schemes', that's certainly not true for anyone who was paid flying pay.....:ugh:

Any government (or prospective government) which even thinks about fiddling with military pensions is in for a nasty shock. Although the 'lump sum' might be difficult to defend.....

If whatever boarding school allowance is called these days was to be under threat and pensions 'under investigation', there would be nothing left to retain significant numbers of loyal armed forces personnel.

Melchett01

29th Nov 2008, 14:15

Al R -

You're right, there is a sustainability gap in terms of public pensions, and the military ones especially. But the government - not just of today - is fully responsible for that. They are the ones that have refused to invest and have instead prefered to keep it as an unfunded commitment, for which money must be found from the budgets on an annual basis to meet its liabilities.

That this is now coming to bite them in the arse is their fault, not ours. They could have done something about it before now, but they chose not to do so. How long has pension affordability been a likely problem? Or are the current generation of politicians suddenly being taken by surprise?!!!

Once again, people are returning from theatres of war to a country fit for heroes. Only in this case, the heroes are lesbians who have had their feelings hurt and secretaries who have hurt their thumbs in a nasty computer related injury. It's just as bad now as it was in 1918, but nowadays, they have no excuse for saying pleading ignorance.

Brewster Buffalo

29th Nov 2008, 14:59

From the DT article mentioned above

PUBLIC SECTOR WORKERS GET LOWER SALARIES BECAUSE OF THEIR GENEROUS PENSIONS, DON'T THEY?
A myth. They are better paid, until you get to the very highest levels of management.
The Pensions Policy Institute, an independent research charity, puts average public sector salaries at £25,600 and those in the private sector at £25,300, although the PPI says salaries soared in the private sector when it came to the very top jobs.

and

IS IT TRUE THAT PUBLIC SECTOR EMPLOYEES ALL RETIRE EARLY ON FAT PENSIONS?
Undoubtedly, public sector employees claimed "breakdown in health" pensions in surprisingly large numbers in the past.
Before 2000, for example, 68pc of all retirements in the firefighters' scheme were due to ill health, as were the retirements of 40pc of police officers, 23pc of NHS workers and members of the armed forces, 39pc of local authority workers and 25pc of teachers.

So now you know as a civil servant you have higher wages and retire earlier!! :hmm: This is a very political issue (ie vote losing) involving many serving (about 5 million) and retired civil servants so I'm surprised the Tories are taking it on.

BB

Jimlad1

29th Nov 2008, 15:41

"The Pensions Policy Institute, an independent research charity, puts average public sector salaries at £25,600 and those in the private sector at £25,300, although the PPI says salaries soared in the private sector when it came to the very top jobs."

That is a debateable point - I've seen other research which says that for the MOD (and presumably the wider public sector), 50% of staff earn under 20K per year, and 75% of staff earn under 24K per year. There are opportunities for decent pay in the public sector, but they are few and far between outside of London.

Of course 99% of statistics can be made up on the spot :-)

LFFC

29th Nov 2008, 16:06

PUBLIC SECTOR WORKERS GET LOWER SALARIES BECAUSE OF THEIR GENEROUS PENSIONS, DON'T THEY?
A myth. They are better paid, until you get to the very highest levels of management.

Oh dear! The Torygraph really should check their facts! Here's a quote from the AFPRB 2007 Report (http://www.ome.uk.com/downloads/2007%2036th%20Report.pdf):

We conclude that:
• With revisions to reflect changing circumstances, our methodology to
determine the relative pension value and how we apply that value to civilian comparator pay remain appropriate given that the Armed Forces have noncontributory pension schemes;
• The value should be 4 per cent; and
• The value will be deducted from the civilian pay comparisons from 1 April
2007, which will be part of the evidence for our 2008 Report.

As I understand things, Armed Forces pay is currently set 4% below equivalent civilian pay. However, given recent world events, I guess the desirability (if not the relative value) of all government pensions has increased. So I suppose all government employees (including MPs) shouldn't expect much of a pay rise this year!!!

papajuliet

29th Nov 2008, 16:25

It's the pensions and early retirement [followed quickly by another job ] of teachers,police and fire service that really annoys the majority of people -and I don't mean the well paid ones in the City or wherever -I mean the majority of private sector workers on average wages whose pensions, if they have them, have been decimated by Brown and who have no hope of early retirement if they can ever retire.
Any government that reduces the pensions of those mentioned above and forces them to work to 65 at least would get a lot of support.

advocatusDIABOLI

29th Nov 2008, 17:06

Papa,

Just wrote a quick note in my diary...... just said 'Arse'!

Have a nice w/e

Advo

charliegolf

29th Nov 2008, 17:16

It's the pensions and early retirement [followed quickly by another job ] of teachers,police and fire service that really annoys the majority of people ......
........Any government that reduces the pensions of those mentioned above and forces them to work to 65 at least would get a lot of support.

You not a public servant then PJ

Twon

29th Nov 2008, 20:43

We obviously don't contribute to our pensions as our pay is reduced as a compensatory measure; no problems so far. However, the issue of working until 65 does not suit the circumstances of our job.

I could understand making a civil servant in Whitehall work to 65 behind a desk but the most military men (and women) are struggling to fulfil their role (deployable) at 55, hence the early retirement age. I thought it also took into account the fact that, by 55, we will possibly have sustained a few knocks, physically and mentally, and may not be in a position to pursue a further "career"?

These points are taken into account when deciding our pension but clearly not understood by all in the media or public.

VinRouge

29th Nov 2008, 21:06

Meanwhile at 10 Downing Street....

YouTube - Gordon Brown's Downfall - The prequel (http://uk.youtube.com/watch?v=wtIjgsxe-jM&eurl=http://thecrownblogspot.*************/2008/11/gordon-browns-downfall-prequel.html)

exscribbler

29th Nov 2008, 23:23

Papajuliet: I don't know too much about police and firefighters returning to work after early retirement, but I do know that teachers who retire early now take a hit on their pension and lump sum entitlements. Once upon a time a teacher could retire early on ill-health and the following day start a lucrative career as a supply teacher. That was stopped by the Tories (Kenneth Baker was the SoS) and was about the only thing they did that I agreed with!

AllyPally: The TPS is unfunded because over the years HMG has used it as a cash cow to pay for other things - among which, presumably, we may find aircraft for the RAF. One of my points was just that - had the money been invested, the scheme would have been fully self-supporting; the fact that it wasn't (and therefore isn't) was caused by acts similar to Broon's raid on private pensions. While largely sympathetic to those in the situation you describe, I have to say that's not my doing; furthermore, why should we suffer just because you are? There was no invitation to join in when you were doing well, was there?

I retired at 61 after 40 years; the last year had been spent absent ill. I was one of those lucky people who enjoyed his job despite its many problems and I always intended working to 65 - PJ please note. On the other hand, had my first career choice been successful, I would have retired at 50 with a handsome gratuity and over the years would have been paid rather more than I was as a teacher. I could also have "retired" at any time to take up a well-paid job in the private sector, while retaining my original pension rights and earning even more in my second career.

Sympathetic? Only partly.

GOLF_BRAVO_ZULU

30th Nov 2008, 00:18

I presume that yer man Cameron is banking on the majority of the British voting public being;

a. sufficiently "sour grapes" to attack Public Servants

b. not Public Servants.

Standby to have the conditions you signed up to being pissed on.

The BNP is looking better by the day!

Al R

30th Nov 2008, 08:04

Melch,

I draw a pension so yes.. there could be a whiff of hypocrisy about this, I accept that, but thats looking at this in the wrong light. There's not an issue of fault here.. its just the way it is. We have to plan ahead 30-40, and 70-80 years and that can only be achieved by acting very very soon. If we don't act, it'll be our grandchildren and great grandchildren and great great grandchildren who'll be asking 'what planet were those generations on?'. Having said that, as they just finish paying off the debt we've lumbered them with, I think they'll be asking that of us anyway.

Melchett said;Al R -

You're right, there is a sustainability gap in terms of public pensions, and the military ones especially. But the government - not just of today - is fully responsible for that. They are the ones that have refused to invest and have instead prefered to keep it as an unfunded commitment, for which money must be found from the budgets on an annual basis to meet its liabilities.

That this is now coming to bite them in the arse is their fault, not ours. They could have done something about it before now, but they chose not to do so. How long has pension affordability been a likely problem? Or are the current generation of politicians suddenly being taken by surprise?!!!

wobble2plank

30th Nov 2008, 08:46

Ah, the ever emotive issue of pensions.

The military pension trap caught me well and truly. I have to say, if it weren't for the pension at the end of the tunnel I would have left far earlier than I did.

Unfortunately those days are now over! This also applies to the private sector pension schemes as well. The tax protections given to pension funds by the last Tory government were gleefully stripped away by a young, fresh faced chancellor named Gordon Brown after New Labour took power. Over the last 10 years, under his tenure, £90 Billion in taxes have been stripped from private pension funds belonging to many of this countries blue chip firms. Oddly enough those firms are now trying to cover huge pension deficits and are closing all final salary schemes.

Whilst all of this was going on the civil service has exploded. Some might say it has been a farcical way to suppress unemployment figures. Employing useless people into useless jobs under 'exotic new politically correct names'. Each of these Quango people gets their own civil service pension.

The public debt, instead of being adequately serviced, has been allowed to explode along with the private, personal debt of many people. Whilst the Boom was going on the Government has had a gleeful, kiddie like, spending spree on rubbish that hasn't produced any results. NHS national computer system anyone? £20 Billion and it's still not here?

The military have been over abused and drastically underfunded to cover the cost of all of these 'think tanks', 'Quangos' and local council non jobs. Ineffectively managed by useless politicians who think 'tactics' are the little sweets that come out of a plastic box. Two hats Des's comment on the new T45 destroyer summed it up, 'It's twice as powerful so we only need half of them!'. Makes you cry doesn't it.

Melt down is upon us. There is no money left. My military pension added to the pension I am struggling to accrue with my new employer, in an industry where we are taxed just for existing, will just about cover a loaf of bread in 10 years. I am being taxed to death and watching it all go into the pockets of social wasters who are being told to go forth and spend! I can't, after tax and soaring energy bills I have nothing left.

Protect the military pensions, invest in the forces, they are, perhaps, the last thing in this country we have a right to be proud of.

Rant over, now wheres my coffee?

spheroid

30th Nov 2008, 14:42

I didn't realise that nurses were paid so much.... I'm in the wrong job....

Revealed: NHS nurse who earns £100,000 - Times Online (http://www.timesonline.co.uk/tol/news/uk/article5258487.ece)

exscribbler

1st Dec 2008, 09:43

Spheroid: you're not in the wrong job! I'm just coming to the end of a course of chemotherapy at Weston Park Hospital, Sheffield. If the care I've had from the staff there and at Barnsley General Hospital is anything to go by, they all deserve a big pay rise.

They're more worthy of that kind of salary than any politician - especially our wonderful Home Secretary who affects not to know what her anti-terrorist police are doing when they're out and about arresting Opposition MPs.

BTW, isn't that Bob Mugabe's game?

Doctor Cruces

1st Dec 2008, 12:04

I don't often get really riled about something on here, but now is the time.

Listen up all you civil service and local government bashers who haven't got a clue what they are waffling on about (what on PPRuNe, never!!).

I am now a working in local government. The vast majority of us are very poorly paid. I recently suffered a new deal on my pension, pay more and get less at the end. This is a nationwide deal not just local. There are also penalty clauses which say that if I retire before 65 I will lose a huge whack of what is rightfully mine.

I earn considerably less than the national average quoted here and I'm constantly amazed by the fact that some of the people whose benefits I administer get a lot more each month than I take home for working 37 hours a week.

I left the Civil Service as a manager to work in local government as an ordinary bod and got an immediate payrise, so they're no better off either and HMG is pratting them about as well.

I can't see how anyone on here can not see the hypocracy of criticising someone who leaves the Civil Service et al with a pension and then goes on to get another job pretty quickly. It's blindingly stupid to do so considering anyone who leaves the service having completed a full engagement immediatley receives a pension. I know I did so I know what I'm talking about here.

So, as many of us on PPRuNe constantly criticise others inaccuracy when debating issues, get your facts straight before you spout about something you know bu**er all about.

Rant over, normal service resumes WIE!!

Doc C

:mad::=:mad::mad::*

Well, nearly immediately. I've had a chill pill and I'm better now!!!

8-15fromOdium

1st Dec 2008, 13:27

Fully agree with you Dr C. My sister works in the finance dept of local gov and is stunned by how much more contracting out costs when compared to directly employed labour (deliberate small 'l') even when pensions are factored in. Still, due to the doctrinaire policies of our major parties, they seem to be obsessed with privitising everything. As senior EC people are finding out it simply doesn't work. If you want proof ask yourself - 'Why are large organisiations such as BAe now contracting in services?'.

The 'private first, and last and always' mentality we have had to live with for over a generation is reaching its nadir. We need to get back to a properly balanced economy where both private and government play its part. The problem we have at the moment is government is taking barrowloads full of tax and passing it on to unaccountable quangos and private companies with no gaurantees of service provision (look at any PFI). We are in the worst of all worlds.

Pension provision is a vital part of this argument. Who do private companies suppose is going to pick up the responsibility for their workers once they have finished with them? Once again these companies are passing the burden onto the taxpayer. The reason so many companies closed their pensions had little to do with future burden, and everything to do with short term profit margins. It is these companies that need a dose of reality, not public service workers.

Also why we are still listening to the 'free market' cheerleaders such as those in the Telegraph, most notably Geoff Randall, after they failed to spot this economic crisis? If I'd have missed something as big as that I would have had the good grace to resign and go very quietly indeed!

The problem is all 3 political parties still back these failed policies, we need to get back to 50's & 60's style corporate government.

BTW ExScrib, hope all is going well.

philrigger

1st Dec 2008, 14:29

;)

Wasn't it Mrs Thatcher who said that no-one should retire and receive more than one government financed pension ? Or is my memory playing tricks on me again ?

That would bu**er me. I am due to receive four !

exscribbler

2nd Dec 2008, 00:18

8-15 from Odium: Thanks for the good wishes; I feel just great and waking up in the morning is always a bonus! :ok:

TheInquisitor

2nd Dec 2008, 01:36

The problem is all 3 political parties still back these failed policies, we need to get back to 50's & 60's style corporate government.
Are you kidding me? This doesn't even merit a response....

There are also penalty clauses which say that if I retire before 65 I will lose a huge whack of what is rightfully mine.
...and so you bloody should! It isn't rightfully yours if you haven't worked long enough to accrue the benefits. Ah, bless, you have to do a life's work to earn your gold-plated, inflation-proof, 66% of final salary pension. My heart bleeds purple pi$$ for you.

anyone who leaves the service having completed a full engagement immediatley receives a pension.
Do you even know how much forces pensions are worth? They are piss-poor compared to your schemes. (I'll give you a clue....it's NOWHERE NEAR 2/3 of final salary....and for many of us, it isn't even final salary!)

some of the people whose benefits I administer
Congratulations, you get paid for dishing out free money to worthless scrotes. If you look carefully, you will find that this is the biggest slice, by far, of govt expenditure. This is where we need to cut back - and hey, less money for scrotes, less pointless civil serpent jobs needed - even MORE money saved!

charliegolf

2nd Dec 2008, 11:09

Do you even know how much forces pensions are worth? They are piss-poor compared to your schemes. (I'll give you a clue....it's NOWHERE NEAR 2/3 of final salary....and for many of us, it isn't even final salary!)

No I don't. A quick rundown would be interesting though. Based on 60ths? Final salary ex FP?

CG

Doctor Cruces

2nd Dec 2008, 11:23

Inquisitor, you are ignorant.

My RAF pension gave me about 33% of final salary.

The same length of time in Local Government would give me about 25%. AND I've only just crept above the salary I left the RAF on 11 years ago, so quit bitching about how much we and Civil Servants get paid and how much our pensions are worth. I'm lucky if mine is even gold plated let alone solid gold. If you want to attack someone's pay and pensions, try MPs who really have it sewn up.

Like I said, stop blethering about things you know bu**er all about or I will likely start on how all service personnel get free coal, rent, electricity and gas as all civvies know only too well!!

Sheesh!!!!!!

:ugh::ugh:

drugsdontwork

2nd Dec 2008, 11:31

"Congratulations, you get paid for dishing out free money to worthless scrotes. If you look carefully, you will find that this is the biggest slice, by far, of govt expenditure. This is where we need to cut back - and hey, less money for scrotes, less pointless civil serpent jobs needed - even MORE money saved!"

Could'nt agree more. Benefits are a career choice for many people these days. Some people need them. many, many people dont. Cut them back.

ScapegoatisaSolution

2nd Dec 2008, 13:12

Doctor Crutch
Spot on but if they try to take away my maid and the butler I'll be really miffed. How can one be expected to cope on our salary without free household staff?

charliegolf

2nd Dec 2008, 13:56

Never expected to see a 'Mine is smaller than yours' thread on Pprune!

onevan

2nd Dec 2008, 14:44

I thought the AFPRB ( independant gov body) set the armed forces pay and pensions and all monies came out of the defence budget. Is the plan to cut pensions so they can cut the defense budget := or to allow for decent body armour etc.

As an aside my mil pension is taxed so I get to pay tax twice on the money I earned in the mob. ( pension only based on taxable pay not specialist pay):ugh:

Doctor Cruces

2nd Dec 2008, 16:34

Scapegoat,

What happened to the chauffer? I had one of those too when I was in.

Doc C
:)

wobble2plank

2nd Dec 2008, 16:41

Doctor Cruces,

You obviously drew the short straw! ;)

Whilst everyone would agree that the Civil Service is necessary, the ballooning of 'executive non jobs' with their entailing ridiculous pensions has caused the entire service to be mocked. Undoubtedly the 'shop floor' workers get a bum deal whilst the supposed progressive thinkers get some disproportionate amount of the Governments pie and subsequently stuff their own faces with it.

As Onevan has stated the good 'ol Tax man was quite happy to take his slice of 'specialist pay' tax, in many cases nicely into the 40% bracket thank you, but not so happy to pay out the pensionable difference. Now I am paying 40% tax on my taxed income pension as well.

New Labour have padded out the civil service with useless middle management who are draining the services resources at an alarming rate. Now the dear old Conservatives are looking around at who to screw next to pay for Gordos spending spree. If they succeed the it will be both the military and the real civil service workers, including the Fire Service, Nurses and Police who will pay the price.

W2P

exscribbler

2nd Dec 2008, 20:52

Onevan: your superannuation contributions are not taxed until you get them back as pension. There is, however, a good argument for them to be taken from taxed income as invariably when you do get the money back as pension, the tax rates have changed and you're suddenly paying more tax...

spheroid

2nd Dec 2008, 21:01

I thought the AFPRB ( independant gov body) set the armed forces pay and pensions

No. The AFPRB merely make recommendations. The Government then have to accept those recommendations. Often they do but not always

wobble2plank

3rd Dec 2008, 07:57

Exscribbler,

The problem with the old pensions scheme, which I admit seems a little insignificant in todays current problems, is that your tax rate was calculated using your total pay, including specialist pay, which takes many aircrew well into the 40% tax bracket. National insurance contributions were also taken at this level.

When coming to 'pensionable pay' the military only takes the 'basic rank' pay minus the specialist pay. Hence you pay full tax and NI and receive a pension worth considerably less. Add to that, when 'retired' at 38 and moving into your next job you have to pay 40% tax on the non index linked pension payments from the Government? Double tax, you betcha!

As I say, for many people currently serving this seems a minor whinge, and it probably is, but it has been annoying retired Military aircrew for the last 30 years plus!

Al R

3rd Dec 2008, 18:25

Wobble said: Add to that, when 'retired' at 38 and moving into your next job you have to pay 40% tax on the non index linked pension payments from the Government? Double tax, you betcha!

There is no reason why a little planning can't turn that to your advantage.. legally.

Al R

15th Dec 2008, 11:32

CBI urges review of spiralling cost of pension schemes - Accountancy Age (http://www.accountancyage.com/accountancyage/news/2232601/cbi-urges-review-spiralling)

"The CBI today called on the government to bring in experts to review the spiralling cost of Britain's public sector pension schemes, which it says is rising towards an 'eye-watering' £1tn. This follows demands last week from David Cameron, Conservative leader, for cuts in public sector pensions, saying a Tory government would make it a priority to bring public sector schemes in line with cheaper arrangements in the private sector."

philrigger

15th Dec 2008, 13:00

;)

David Cameron, Conservative leader, for cuts in public sector pensions, saying a Tory government would make it a priority to bring public sector schemes in line with cheaper arrangements in the private sector.

Like what MPs pension arrangements are ???:ugh::ugh::ugh::ugh:

Knowing that this subject was on the horizon they changed their system sometime ago to ensure that they would not be caught up in the argument.
Pigs in Troughs comes to mind.

NickGooseBrady

15th Dec 2008, 15:33

If it ever comes to pass that our current pensions are pulled for something else or adjusted to such an extent that they no longer resemble what we thought we were getting then I would like to think that all 3 services would march on Downing Street and carry out a terribly polite coup.

Let's face it, the vast majority of us are "pulled" through the system from a certain point by the prospect of that pension carrot. If they remove that then all hell should break loose, it would be a scandal.

Melchett01

15th Dec 2008, 20:08

Nostrinian - how about letters to respective MPs?

Granted, it may not change the price of fish overall, but it would let MPs know just what the feelings are at the coal face. I don't know what sort of majorities most MPs have with military bases in their constituencies, but I'm guessing places like Marham which have in excess of 5% of the RAF would make a dent in their majorities and send a message if it didn't actually get their opponents elected.

Given that the electoral map is already skewed in Labour's favour, the prospect of losing some of their traditional seats might just be enough to make them realise what they are setting in train. After all, they clearly don't give a damn about us, but the prospect of losing their own livelihoods might just make them think again.

glad rag

15th Dec 2008, 20:16

BBC NEWS | Politics | NHS pensions 'overpaid for years' (http://news.bbc.co.uk/1/hi/uk_politics/7784606.stm)

mlc

16th Dec 2008, 05:13

The Police are in the firing line as well. They'll probably be joining you on the march.

roony

16th Dec 2008, 07:01

This is kind of unfolding as you would expect. The inept government can no longer afford to pay public sector pensions. There are a number of stories drip fed to the media over a number of months bringing the subject into public view. This gets the majority on side, everything is out in the open and before you know it, your pension looks nothing like you were expecting. It’s sad, but it’s happening and it’s inevitable.

NickGooseBrady

16th Dec 2008, 07:37

This could really push some people "over the edge". I do hope that the Government (whichever snivelling form they take) don't expect any form of Operational Capability if serving members of the Armed Forces have their pensions :mad:cked with. They thought they had problems with retention at the moment, stand by......!

100% of my colleagues only remain serving for the pension. Of course this was not the case in the first 6 years or so, motives were different then, adventure, serving your country etc etc. If they want all the experienced bods, who pretty much form the glue in an otherwise fragile Armed Services, to leave, then they are potentially going the right away about it.

:mad:

And relax......

Front Seater

16th Dec 2008, 07:56

Roony,

This gets the majority on side, everything is out in the open and before you know it, your pension looks nothing like you were expecting. It’s sad, but it’s happening and it’s inevitable.

As I have said before on this forum on this subject - no, it is not inevitable.

I have spent many years in service of H M Queen and the country and not be lured into civvie street during the 'dizzy' years of the 90s and new millenium because I knew that I was destined for a decent pension.

Those that say that the Public Sector get paid just as well as the Private Sector - they a right, now there is a balance, but please do not forget the many many years where the Private Sector had bonus after bonus (and we are not talking a couple of hundred quid Christmas bonus).

So I have planned my career, my future, my retirement based upon the 'contract' that I signed with H M Queen and the Country nearly 20 years ago. Just because I have kept 'soldiering on' quietly doing my job and prepared to sacrifice my life for my country as I knew that my pension would look after my family - then please someone tell me why it is inevitable that just because H M Govt and their associated PFI (e.g. Xafinity) have incorrectly managed the nations economy and pension funds, then why should I (and potentially my family) suffer.

This is so wrong - and I really do wonder does this whole H M Govt 'world saving' bail out have any coherence and are the Polticians fully aware of what their knee jerk reactions are doing to those Public Servants that have loyally done exactly that - 'serve the public' and not taken the quick buck with avarice option.

How on earth does H M Govt really believe that it is going to recruit and retain high quality Public Servants when the Private Sector picks up and starts to offer them more lucrative terms and conditions. Lerts get this straight, I have many a Private Sector financier that doesn't give two hoots about Pension Schemes going wrong as his bonuses over a 8 year period have all been invested in country estates and overseas property that he is more than willing to sit on and 'ride out the storm'.

I didn't get such bonuses and therefore call me old fashioned, I rely on the covenant that I had with HM Queen and the country that I would be paid a fair pension for remaining loyal to the Crown.

Now what I would really like to see is H M Govt do a complete review of all Public Servants - no fannying around or hiding behind a quango/pseudo Politcial Correctness. If HM Govt really needs to save money and it is putting Crown Servants on review, then lets do it.

Do we really need all of the Council and H M Govt positions that due to their PC and ED lable have bottomless funds as H M Govt can show that it is diverse. Lets make it clear, if these departments and positions actually add something to society, then I am all for it. But just to make a HM Govt more politically correct for a small minority then this has to stop.

Again, with immigration - how much, who adds value, who really needs asylum - and I 100% support genuine requirements or those that add to a community. But how much has and is being spent/wasted?

Same goes for those that are sponging off the state - I am still shocked at the recent Prezza documentary where a 19 year old single mother genuinely believed that she was middle class because she did not have to work.

My point is that before H M Govt goes for the quick win of reviewing my pension it needs to man up and have some moral courage to sort out the areas in its back yard that are (and having been) losing/wasting far more money than the Public Sector pensions ever will.

c130jbloke

16th Dec 2008, 11:05

May I suggest:

The Forces Pension Society - Contact details (http://www.forpen.org/contact-us/)

Possibly the best 23 quid you will ever spend....:)

LFFC

26th Dec 2009, 20:07

One year on since the last post to this thread, with the economy in a mess and an election looming, there is still much talk of reviews to public sector pensions.

I was therefore interested to read the following paragraph on a pensions website (http://www.sharingpensions.co.uk/glossary25.htm#text8) (my bold):

The Armed Forces Pension Scheme is a final salary, contracted out, unfunded occupational pension scheme and its rules are set out in prerogative instruments. These documents are not subject to approval, annulment or amendment by parliament, they derive their authority directly from the Queen.

Does anyone know if that makes existing Forces pensions resistant to government "adjustment"?

Could be the last?

26th Dec 2009, 20:10

Obviously not! Otherwise we wouldn't have changed from AFP75 to 05.... and there is also a possibility of '12 on the horizon aswell!!

LFFC

26th Dec 2009, 20:18

CBTL,

A lot of people elected to stay on AFPS 75 - so it's alive and well! Although AFPS 75 was brought into force by a Royal warrent, I notice that AFPS 05 was introduced by the S of S through the Armed Forces (Pension and Compensation) Act 2004 - so I wonder if the latter is as safe?

VinRouge

26th Dec 2009, 20:42

If you think that HM will step in the way to protect Forces pensions in opposition to government decisions, think again.

EVERY law is signed by the queen, including changes to the UK constitution. If HM signed off the Lisbon treaty ammendments to the UK constitution, I cant imagine her raising her head above the parapet regarding pensions.

Whether we like it or not, Whitehall has to find 25% cuts in expenditure, current and future. One of the easiest ways of doing this is by ammending public sector pensions, which are currently unfunded and not in the future government debt statistics.

Have a look to see what they have done to redundancy terms if you think pensions are gold plated... the retrospection law will last as long as our government carries on without IMF bailout. Once we get past that little number again, all bets are off.

Melchett01

26th Dec 2009, 21:16

Could well be time to do a runner and start drawing your pension before the rug gets pulled from under your feet.

Financial crisis or not, whoever is in power at the time would be advised to think long and hard about putting military pensions up to be chopped. For one, there does seem to be some sort of groundswell of pro-Forces opinion amongst the more intelligent / reasonable members of society. Look at what happens when politicans make ill thought out decisions to save a quick buck or appear populist - they generally backfire.

Secondly, as has already been stated many times on this thread, the Armed Forces have already moved over to 05. If there is any justice, other public bodies will be in line for pensions readjustments before they have yet another go at the Forces pensions.

Finally, and most importantly, the primary duty of any government is the defence of the country and its people. That would be very difficult to do when large tranches of your most experienced and capable individuals walk because you have just destroyed what is for many the only reason they are staying in. Many who want to leave are caught in the pensions trap; if you spring the trap for them, they will just walk and then where will we end up?

Al R

26th Dec 2009, 21:18

The principle of the military pension is that it is unfunded and the amount needed is set aside by what is called a “Prerogative Instrument”. It does not need the approval of, neither can it be annuled or amended by Parliament. The Prerogative Instrument for the RN and RM is an Order in Council under the Naval and Marine Pay and Pensions Act 1865, for the Army, it is the Army Pension Warrant 1977 and, for 'us', QRs. Of course, the terms of the principle may be varied and if it wasn't for the fighting in Afganistan and Iraq and the swell of public support for the troops, it would probably already have been fettled again by now.

VinRouge

26th Dec 2009, 22:08

Melchett, that is all well and good, but public support for the military and our pensions will last until NHS waiting lists go through the roof and granny gets told by NICE that the latest and greatest cancer drugs are unaffordable due to Jock's 4 star pension.

Melchett01

26th Dec 2009, 22:22

VR - at which point, then maybe the NHS will think about their latest £12Bn+ IT system which seems to be overdue and unwanted. That is very roughly half the annual Defence budget for a year on one IT system.

I think there are plenty of other organisations and people that need to look at their own afairs before criticizing the military's.

Orange Poodle

27th Dec 2009, 16:50

minigundiplomat

27th Dec 2009, 16:52

Most of the people I know are only staying for the pension. Would be interesting to see what happened if they fiddled with it, but I think I know.

PRO NCA

27th Dec 2009, 19:18

I for one would walk tomorrow if they start messing with my pension even though I have only just over 3 yrs to my 55 and on the 05 scheme. I am still better off than on the old scheme

Biggus

28th Dec 2009, 08:29

If, and it's quite a big if, this country ends up in so much financial pooh that the IMF steps in then the British government (of whatever colour) will have pretty much no choice but to do what it is told. If that includes reducing all public sector pay and pensions, then they will have to do so. That gentlemen is how serious it could get/is getting.

Any consequences of such actions will simply have to be bourne, even if that includes mass resignations in the whole public sector, and no doubt the British government will try to blame the IMF for forcing actions upon them, and, if it is a Tory government, the actions of previous Labour administrations for getting us to this point.

That is how badly things could end up if the politicians of all parties don't grasp the nettle of government debt reduction - and not being honest about the scale of the problem in the PBR, on the basis there is an election looming and you don't want to frighten the voters, is, in my opinion, totally dishonest, typical of NewLiabour and possibly of all politicians.

I heard somebody say something the other day that struck a chord with me. The government of the day (currently Labour) don't own the country. They merely have stewardship of it for 5 years, and all their actions and decisions should be made in the best interests of the country and all its inhabitants not their own political party and traditional voters! Sound like a good principle to me, just a pity they don't follow it!

ScufferEng

28th Dec 2009, 09:12

Everyone is barking up the same tree, namely reduction of costs to the public purse!!:ugh:primarily through attacks on our pensions. It makes me :mad: angry now we are having the fickle finger of fate wagging in our direction!!

Maybe, just maybe we could examine the route of increased personnel taxation ONLY FOR THE SHORT TERM to get us away from Bankrupcy Central. simplistically a covenent with the government (agreed by all colours) i.e 2 years at an extra 10 % should do the trick PROVIDED ALL LOOP HOLES THE SLIPPERY RICH ARE USING AT PRESENT ARE CLOSED and tax avoidance is more seriously pursued. This is very simplistic and could be modified with increased personnel tax allowances to help lower income earners and protection offered for home owners?MIRAS? Married persons allowance?Scrapping of taxes on savings? after the two years tax goes back to it's present value. This may proove un-palatable for many but would avoid the insisdious Fiscal Drag that will affect us for decades with the present policies and would keep the experience and recruitment going in the public sector. I've no doubt that the smug bankers will harp on about re-locating to the Cayman Islands or similar; LET THEM GO and take away their British Passports on the way out- there is enough talent in the UK who would relish the chance to replace them.

We must not become the Pariah figure of the Economy as the political parties and more worringly the National press is turning us into.:=

minigundiplomat

28th Dec 2009, 09:32

I am suspicious, but not too worried. I dont think Cameron will allow any of his party to tinker with the inner workings of the Military. He knows its almost broke, and that the public are watching. His offer to double op allowance if elected is a recognition of that.

However, if we pull out of Afg, and public attention is switched to something else.................

VinRouge

28th Dec 2009, 10:40

His offer to double op allowance comes on the back of the fact we wont be getting any pay rises during the next parliamentary term. "We support our forces with a doubling of op allowance", forgetting to mention that poor old squaddy will be having his pay eroded by inflation and National Insurance increases for the next 5 years.

And if you think Cameron is the saviour of the public sector, than think again. I think it more likely we get pulled out of Afghanistan vis a vis the canadians in 2011 than us see the interests of Defence preserved.

He has already made too many ringfence promises that due to Tory history he cannot renage; The NHS being my biggest bugbear. We are not going to see cuts to the NHS, spending is going to become increasingly tight, to the extent Job losses across the public sector will be neccessary, indeed, much of the real "Pain" (other than the significant overstrech and defence spending as a % of DGP falling) of the recession has been bourne only up to this stage by the private sector. We as public sector servants cannot escape the fact that up to now have escaped the "pain", but be assured, its coming by the fistful once the election is over. You only have to see musings of a single point tory lead causing a run on the pound; we are not going to escape further economic devistation without significant cutbacks to the public sector, that, by and large, has been well taken care of for the past 10 years. The fact that defence has been fistf*cked for the past 10 years will not feature into calculations by the next government. In some ways, I wonder if CAS going early with the cuts was a faux pas; our current reduction in capability will be a mere distant memory by the time the next round hits.

Biggus

28th Dec 2009, 11:18

Scuffer,

This is a thread about military pensions - hence my comments about them, but no sane politician will claim that reductions in public sector pensions are the "primary" means of reducing public sector borrowing!

LOOK AT THE SIZE OF THE PROBLEM!

The government is borrowing about £180Bn (billion) more than it earns this year. Under Labour plans that ANNUAL deficit will be reduced by half in 5 YEARS!! That means in 5 years time they will only be borrowing about £90Bn more than they earn!!!! Assuming a roughly even decrease this means borrowing £160Bn, then £140Bn, £120Bn, then £100Bn then £90Bn. So, in 5 years we have halved our annual borrowing, but built up a debt of £610Bn (160+140+120+100+90) IN ADDITION TO THE £800Bn ish we already owe. So we will then owe £1,400Bn, and are still not even running an even budget!!! We will potentially be in a worse financial position than we were at the end of WWII, when we were flat broke. We will need to get a budget back into balance, then credit, and pay off about £800Bn of accrued debt to be back in the position we were in before the credit crunch started in 2008.

In 2008-09 the government made about £155Bn through income tax, at rates of say 20 and 40%. Your idea of increasing income tax by 10% would raise, being generous, about £50Bn a year extra for 2 years under your scheme. This would be painful for many, and while it obviuosly would help, will be nowhere near enough on its own, or applied for long enough.

You can expect widespread cuts across the whole of government once the general election is over, and the politicians start to come clean. As some examples, perhaps say £3Bn off the defence budget, less money for councils, capital projects (e.g. motorways, etc), 10% reductions everywhere except the NHS, etc, for the next 10 to 20 years to get out of this mess. That is the true scale of the situation.

Just remember, when the politicians talk about reducing government debt, they are referring to the ANNUAL figure, not the OVERALL figure. It's no real secret, and not hard to confirm all this, at least the basic numbers, just do some searching using google!

VinRouge

28th Dec 2009, 13:06

Biggus,

That, of course assumes that someone wants to buy £610 billion of government debt over the next 5 years. Any idea of where that is coming from?

Its not coming from the Bank of england, thats sure. They BOUGHT more gilts this year than they sold, but that's unsustainable. We have a big problem on the horizon, one the politicians are not talking about for a reason.

Scuffer, you can let all the high rate tax payers go, but once you are left with a nation of benefits claiming immigrants and 4th generation dole-ites, who pays the bills?

Ivan aromer

29th Dec 2009, 09:43

Having PVRed from a Dec B post 75 defense cuts, I have never taken in to account any pension that MIGHT come from HMG. To do so with the current shower in charge and with the bills that they have run up would be unwise!

Always a Sapper

29th Dec 2009, 10:08

Civil unrest on its way me thinks.... :mad:

Old Ned

29th Dec 2009, 14:16

AI R

"Prerogative Instrument" or not, the Service pension is certainly not unfunded. When pay increases are discussed and comparability tables consulted, pay is rebated by a certain amount (4-5%?). So you (I'm retired, thank goodness) are "contributing" that amount.

Given the opprobrium justifiably heaped upon MPs for their fiddling expenses and setting themselves up with the best pension (in terms of return for years spent in the job), I like to think any government that tries to tinker with Service pensions in isolation is on to a HUGE loser.

Of course, I may be wrong!

Pip pip

ON

Non Emmett

29th Dec 2009, 17:01

Elsewhere on pprune I read with interest the informed comment on an alleged surplus of officers at Squadron Leader rank and above. If numbers of officers were cut at such levels - ought this not help to pay for the pensions of remaining personnel ?

I worked in the private sector and my pension was wrecked when I was made redundant in my fifties whilst friends in the public sector left at the same age but walked with a full pension having had the extra years made up. I don't really want to get involved in the public v. private debate but I know too many who have moved across to the public sector and the general comment is that it's a doddle.

Pay those in uniform well and give them a good pension but let's get stuck in to reducing costs amongst the millions who have benefited from Gordon's years of "investment" across the bloated public sector.

Al R

30th Dec 2009, 05:33

Hi Ned,

I meant that it didn't have to be funded by market performance, sorry.

Vin Rouge,

The State will stop buying its own Gilt in Feb/March 10 and that'll be the interesting time. No one believes Darling's forecast for 3.5% growth to 2011 and with inflation and interest rates set to rise, you watch medium index linked values go up in Spring. After Latvia and Ireland, we have the highest deficit in the EU as a share of GDP and our yield on Gilt is pretty close now, to those Italian 'Treasuries' that we all used to smirk at. Almost 30% of our National debt is ownded by foreigners who still seek solace in our AAA rating. If we lose that, they'll simply sell up cheap and park their cash instead in Turkey, Brazil, or India. I read before Xmas, that Chile FFS :ugh:, has already undercut British debt yields on some maturities.

Last year, Watson Wyatt guesstimated the Public Sector pension deficit at almost £1 trillion.. where is that going to come from? If not us, then our children. I read that the deficit of a small quango was £112 millions, all on its own. With regards to the military pension, lets remember what it was for. It was supposed to provide funds for those who returned from fighting to have a roof over their heads. The military pension was not intended to allow us all to retire at 40 or 55 in shelf stacking or sunny golk filled comfort and if we are getting down to the nitty gritty, that what we all want it for. Yes, I have a pension and I am ready to be bombarded for hypocrisy :ok:, but I certainly didn't join up for the pension. I joined up for the job and the craic. I also made provision for my own financial future and not enough people currently are, and thats a big part of the problem.

The military pension HAS to change, thats the bottom line. It is all unsustainable, it might make for unpalatable reading but I suspect that those who say they will walk if things change, will be invited to walk and see for themselves if the grass elsewhere really is greener. I read that Tandridge District Council staff were all entitled to a 2.8% pay rise in April 2010 as part of a two-year pay deal agreed before the recession began. They decided to forego that rise, completely. On the wider scale, if the military decides that it is exempt from the day to day realities of the good people of Tanbridge who it stepped forward to protect, then the shift in perception will change. Such is the fickle double edged sword nature of becoming a fashionable cause.

I am not suggesting that we cut and run or absolve ourselves from responsibility for those who step forward to protect us. It might be that the war pension improves so that money is targeted where it is MOST needed, but surely, the extra allowances we give troops have to go some way towards the troops taking on a greater sense of responsibility for their own futures as well? The challenge is one of education and culture as much as anything. All we are doing by treating our pension as a sacred cow is hiding our heads in the sand and passing the buck to our children and grandchildren. Its such a difficult issue - but I think the final solution involves people, everyone, at some stage in the future (perhaps not us) biting a financial bullet. If matters continue for very much longer, then we are f:mad:ked. Trouble is, none of us wants it to be us.

skaterboi

30th Dec 2009, 07:48

So whilst no-one with half a brain should be under any illusions as to the state of the UK's finances, what exactly are we saying then?

Are we saying that AFPS 75 and 05 should to be renegotiated? Can they be, causing us all to loose out? Or are we saying that AFPS 10 is just round the corner and any change will affect those who join up from say, next year?

I have 4 years to my 16/38 point and rightly or wrongly want the pension that I was told I was going to get.

sidewayspeak

30th Dec 2009, 08:07

One of the few remaining issues in the military that really raises my hackles - and my urge to post on this site - is the pension. I am now one of those remaining for the safe income stream and the pension at the end of the tunnel.

That said, I still do my bit as a Lincolnshire warrior, including time in the Stan. But the pension remains the last carrot of motivation. If that is 'fiddled with', it may well push more of us out.

However, it could also have the opposite effect - if we have to wait longer and work to 65 to collect it, then perhaps we will have to stay. But do you really want old folk like that on the front line!!?? My kneees and back are shot already and whilst I think will still be still deployable and active up to my departure at 55, others may not. We would end up with a very old and knackered RAF!

Even worse, what about our Army OR brothers who are 'retired' around age 40 (or 22 years service). If age legislation bites as hard as sex discrimination has, we could end up with a very old military.

Age and continued fitness to work will become the next generational mess - the military is not alone in wearing down its employees. Many other forms of employment require physical strength and/or dexterity (like construction, manual labour etc). All very well saying we are living longer, but are we still able to carry a bergan at 65, or hump a toilet cistern upstairs, or carry a bag of cement?

The issue is getting those of the appropriate age to work - not making those of us who do work, work longer. Or in daily Mail speak - get those scrounging, parasitic layabouts - from wherever they originate - out to work and off the social.

Time for another tea and shortbread.

Tourist

30th Dec 2009, 09:19

God you lot are a bunch of reactionary whingers.
Talk of the IMF is just silliness.
In 10 years time everyone will have forgotten this latest crash and be busy having another boom.
It's just the way of the world.
Deal with it.

GOLF_BRAVO_ZULU

30th Dec 2009, 09:55

sidewayspeak. I would say your paras 5 and 6 are pretty spot on. It’s old news now but when viewed against this lunacy; http://www.guardian.co.uk/education/2009/jan/05/school-leaving-age (http://www.guardian.co.uk/education/2009/jan/05/school-leaving-age)

School-leaving age may rise to 18 in effort to tackle unemployment

Without wishing to introduce Thread drift, it does make one wonder what the grand plan is. Preserve the young’ns by wearing out us old buggers? Wouldn’t exactly increase our chances of drawing our Pension for long, would it?

Biggus

30th Dec 2009, 10:27

Tourist,

Not for the first time on pprune you are talking complete tosh.....best stick to what you are best at...."crab bashing"!

When I made reference to the IMF and the UK I said....."If, and it's quite a big if, this country ends up in so much financial pooh that the IMF steps in....". So I caveated my reference to the IMF as a worse case scenario.

As to "booms", nobody has said that the private sector will not be experiencing a boom in years to come, so indeed many (most) people will have forgottten this crash, but we are discussing public (i.e. state) finances/pensions etc and restoring the governments debt to managable levels. The state of public finances effects its spending on the military, and military aviation, hence its inclusion on pprune.

As to what is going on in the world when the IMF are called in:

Ellen Brown: EU, IMF Revolt: Greece, Iceland, Latvia May Lead the Way (http://www.huffingtonpost.com/ellen-brown/eu-imf-revolt-greece-icel_b_389409.html)

IMF Survey: Latvia Struggles to Overcome Economic Downturn (http://www.imf.org/external/pubs/ft/survey/so/2009/int080309a.htm)

Nathan Lewis: The IMF Destroys Iceland and Latvia (http://www.huffingtonpost.com/nathan-lewis/the-imf-destroys-iceland_b_276193.html)

Blacksheep

30th Dec 2009, 10:30

At a recent meeting of our local constituency party, we were entertaining a shadow minister guest along with our own shadow minister MP. The floor was free for questions and I asked about pensions policy. The guest MP began waffling on with the usual platitudes about dwindling numbers of young people, people would have to make their own provisions, blah, blah etc. at which point I interrupted him to point out that it was we constituency members all over the country who chose our candidates and ultimately decided upon policy. It was therefore fair to point out that everyone present had grey hair and was either close to retirement or already retired. Not only that, but it is the older voters who have the highest turn out at election time. Both he and our own MP appeared stunned by all the subsequent "Hear-hears".

Parliament ignores the pension time-bomb at its peril; I hope they took the warning to the next shadow cabinet meeting.

charliegolf

30th Dec 2009, 10:32

MGD

However, if we pull out of Afg, and public attention is switched to something else.................

That's a very salient point from an informed (ish) civvy's point of view. However, my opinion is that another holiday destination will soon heave into view for you guys, maybe maintaining the status quo.

If though, they ignore the signs, and do piss about with pensions, they soon won't have enough boys and girls under arms to keep UK at the top table.

Keep safe.

CG

dallas

30th Dec 2009, 11:46

Presuming any govt who end up in charge next year will resent spending cash on defence, a good way to run down the sector might just be to chop pensions. If you ask Joe Civvy what 'our boys' need, they'll undoubtedly say 'helicopters, body armour and boots' - pensions aren't patriotic bits of kit needed at all costs in foreign lands, and there is unlikely to be much of an outcry from the general public if the apparently generous military pension is brought down to that of the general populous.

That will probably cause an exodus, certainly in older arms like the RAF, but as has been seen during the transition to expeditionary warfare, those who left - and there have been a fair old number - have been replaced by those who know nothing but expeditionary warfare; so it will be with pensions - although I can see it being done in the same way as AFPS05 was introduced, with newcomers only being given the chance to join the new scheme, as those in the old are gradually replaced.

If this happens there may be some fringe benefits though - those who are serving little more than themselves may opt to leave earlier, and the sycophants, whilst often genetically driven to do so, may see evolution leave them behind.

minigundiplomat

30th Dec 2009, 13:21

This is set to rumble on....

Firstly,

Public opinion (at the moment) won't let any government cut our pensions whilst 'our brave lads' are in Afg and the bankers are still awarding themselves bonuses. That could change, but not in the next few years.

Secondly,

if it is introduced, it will only affect those who follow us. Think about it, Flt Lt X* stands up in court with the following defences:

I have only remained in the RAF for the last [insert length of time] because of the anticipated pension. During this time I could have been earning £[insert sum based on Virgin/BA payscaling] and therefore I wish to claim for lost earnings based on a promise that the MOD are now failing to live up to.

or

I, Sgt Y have endured lower than industry average pay for the last 23 years, including a 4% discrepancy set aside for pension contributions, only to find the MOD have now cut my pension.

or

The AF pension was one of the main resons for me staying over the last 10 years. During this time I have spent 4 years in the Middle East facing danger on a daily basis [point to long row of medals] and have been repeatedly seperated from my young family. Having endured all this, the MOD is now cutting my pension.

or

Having been repeatedly moved around the UK and Europe for the past 30 years on behalf of the MOD, I have been unable to put down roots or buy a house. I was depending on the pension in order to do this, however as this has now been cut, I am soon to be made homeless.

*or RN/RM or Army equivalent.

Thirdly,

However much the government wishes to shrink the forces, there are still core branches and pinchpoint trades it knows it needs, even if they give up on their top table aspirations. Do they really want to see all of these people walk, and have the entire armed forces under 25?

I think our pensions are fairly safe (and I use that phrase loosely in the present climate), and there are far bigger issues to grapple with right now if you must worry.
However, if youre about to join up, I would prepare for a BOHICA moment viz a viz pensions.

8-15fromOdium

30th Dec 2009, 14:39

MGD, I completely agree, you only have to look at the uproar concerning Gurkha pensions. Also a certain prospective PM has a very large military/ ex military population in his constituency, I'm sure that fact will concentrate his mind :E

The B Word

30th Dec 2009, 15:10

MGD, well said mate! :D

Al R

30th Dec 2009, 16:04

Dallas makes some good points. The RAF has more people serving for longer who leave a lot nearer natural retirement age. I don't suppose the average Tom who does 5 years in the infantry cares too much about things like pensions.

MGD,

Its not ‘just’ the reliable salary that is attractive – its the overall package. Consider being a Sergeant in High Pay Band, Level 7 Pay, on a 6-month Operational Tour.

Salary:

£35,219.00 (not all that shabby in itself?)

(Some) benefits:

Operational Allowance:£13.08 per day for 180 days = £2,354.40
Longer Separation Allowance (LSA)£14.52 per day for 180 days = £2,613.60
Gym :eek: = £240.00
Medical Care: (eye, prescriptions dentist etc) Which might be estimated to be = £270.00
Standard Learning Credit: Up to a value of £175.00 pa
Enhanced Learning Credits:Up to a value pa (for a max of 3 years) of £2,000.00
Subsidised Accommodation Families Quarter, Type C:£1,775.72

Total so far.. £44,647.72

Plus pension Benefit (annual MoD contribution) the value of which might be estimated at = £6,832.49

Total (including pension): £51,480.21

Would an engineer be paid that much, or get those benefits? I know that the BAe pension fund requires an employee contribution of 4%. Also, a lot of that added 'hidden' value is fixed, so an SAC gets the same benefit, making his/her salary (pro rata) disproportionately advantaged. Would he/she be as inclined to leave?

The pension scheme is going to evolve, there's no point in wondering about that - it might be that the scheme changes for new members, as have many Final Salary Schemes. But, in making its decision, the MoD will consider how many recruits found their way to a MoD recruiting website, having Googled 'Great workplace pensions'? Not many..?

WorkingHard

30th Dec 2009, 16:10

As I remember the pension payable at 38/16 years was also accompanied by a tax free gratuity of 3 times annual pension. Thereafter the pension was static until the age of 55 was reached and then it was inflation proofed with all inflation increases immediately applied at age 55. Is this now significantly changed?
For those for whom this is a sacred cow please consider where you may be able to aquire such generous pension/retired pay in any other walk of life. The actual pension payable may not be a generous fraction of final salary but dont forget the period you have been able to get this from age 38 and dont forget the tax free gratuity that is payable. When in civvy street one take up to 25% of the "pot" from ones pension then the pot is of course much less and the pension is based on what is in the pot. Yours is not. Please have some sense of what civilian life is truly like in terms of pay and pensions anyway. If not the by all means join the dole queues which many (not all) will surely do because the proper jobs simply are not there. Oh and by the way many of you would only be earning the statutory minimum rates of pay with ALL you living costs to be paid from your earnings.
I wouldn't (perhaps couldn't) do your jobs any more but I do think you need to see what advantages you have by being in the British military.
Keep safe

minigundiplomat

30th Dec 2009, 16:26

Al,

some very good (and thorough) points as usual.

But, in making its decision, the MoD will consider how many recruits found their way to a MoD recruiting website, having Googled 'Great workplace pensions'? Not many..?

Agreed, but the beancounters will look at every angle. The biggy is what can we be taken to court for, and what can be proven.

As the MOD often quote the 'benefits' of the complete reward package as you identified, it then has to deliver. Pensions are one of those elements.

I agree, military pensions will eventually change, but I can't see how any government can cut the pensions of those already in the scheme.

Happy New Year

MGD

Al R

30th Dec 2009, 17:10

No, agreed. It can offer change, but as you say, it runs the risk of being dragged through the Courts by stroppy Chief Techs if it compels it.

The scheme gets fettled with, more often than you might think..

http://195.99.1.70/si/si2009/em/uksiem_20090544_en.pdf

.. so padding in a notice period won't make much difference; if anything, it should have a positive impact on recruiting as people rush to get in with the old scheme. If/when the Tories get in, the time to do anything will be sooner rather than later I guess.

And a Happy New Year to you as well. :ok:

RumPunch

30th Dec 2009, 19:20

Well If the government want to implement changes im 100% sure the people at the top of the MOD will fight tooth and nail to prevent or lessen the hit if it should arrise as they too will face the same changes.

MGD had the best valid points yet but just to know where I lie I want to do some research after the NY period because im one of the few thats given my time and contribution from my wage to secure my financial package and If that was taken away I would have no hesitation along with many to take further legal action. Right now although i dont belive much truth in this I can see it being discussed and It is worrying me.

Al R

30th Dec 2009, 19:46

Rum,

I wouldn't worry - all the speculation is about possible future developments. There is nothing proposed let alone confirmed. Nothing would (if at all) come in for a while yet, and even then, it'd probably be just for new entrants.

Blacksheep

31st Dec 2009, 14:23

Would an engineer be paid that much?A licensed supervisor would be paid quite a bit more than that (around £50-55,000 if on shift with multiple types on his licence or around £40,000 if he was an ordinary "office" engineer) but of course he wouldn't get any pension at all until he retired at age 60+. Also the pension would be contributory with contributions deducted from salary. As for a sandpit job like Camp Bastion, wild horses wouldn't drag any of us there for less than £120,000 plus gratuity.

As an example of a tough civilian tour overseas, separated from home and family, a couple of years back I was working in Belgium on a contract that came out as £72,000 a year (if I'd worked a full year), but I had to pay for my own accommodation - €900 a month = £720/mth = £8,640/yr. So it was worth £63,000 a year in for the inconvenience of being in darkest Brussels, up to my neck in beer and chocolate.

Unfortunately there's a dearth of opportunities as a civilian engineer these days and most of us are either on wage cuts or short time working; some on both.

Al R

3rd Jan 2010, 10:48

<Article 10 reduces the age at which Pension Credit Members are entitled to a pension from 65 to 55 for those with a pension sharing orders made on or after 6th April 2009. Article 11 gives those with orders made before this date and who are entitled to a pension at age 65 the option to receive early payment of a pension from age 55 with actuarial reduction.>

The G’ment introduced that Amendment) Order to allow pension credits to be taken earlier than previously (some might remember the Lt Col’s wife who sued the MoD a couple of years back, and this seems to be partly in response to that). So, I imagine that this is going to be, primarily, news for divorcing couples who have been a party (either directly, or indirectly) to the scheme for quite a few years and who are in their late 40’s and 50’s, who are getting divorced and who want some clarity with their disengagement (for want of a better word) financial planning. That SI also only refers to the 2005 scheme, but I imagine that as this has been introduced to avoid discrimination, the rules will apply for all pension credits (ie; from both schemes). It also impacts on folk who got divorced before April 2009.

Before the SI, and previously when pension sharing, all scheme credits remained untouched until the credited member (usually the ex-missus) reached 65, at which point her slice of the pension benefit could then be taken. This change means that the pension credit can be taken by her far earlier (in fact, from the age of 55). And because that is going to have a huge impact on the length of time she can receive benefits (10 years longer), the current Cash Equiv Transfer Value (CETV) which is invariably used, is going to be skewed in proportion to the total amount of benefits that that person is going to be able to draw upon. In other words, if the ex wife is going to have access to benefits for longer (from 55), then does the same amount need to be shared right now? As the scheme is unfunded (in thne technical sense), there is little chance the g'ment defaults (gulp, famous last words).

The CETV wasn’t designed for use in the divorce process – although it has become so. It is the simply the amount of cash a scheme will transfer out should a member leave, which is what pension sharing usually focuses on.. and which is what a divorce court usually focuses on.

The 05 scheme does not allow for Early Departure Payments - members between 39 and 55 and who have got 18 years service in, have CETVs only valued from the age of 65. This anomaly is despite the fact that if they left they would receive a lump sum and between 50% and 75% of their pension immediately. There are many tales of servicemen who have huge differences in the value of benefits and CETVs and it ignores the fact that if the member ‘stays in’ for just a few more years they might be eligible to take their pension early, rather than waiting until 60 or 65, at which point, the value changes dramatically. CETVs therefore, are invariably lower, which might of course, appeal to some.