Pensions. Breaking News.....

[taxydual]

BBC News - Pension reforms for military outlined by MoD (http://www.bbc.co.uk/news/uk-19070222)

[Runaway Gun]

The MoD says the reforms were conceived after consultation with more than 17,500 personnel in the UK and overseas.

Are any of those 17,500 present and would like to state exactly what they said? :rolleyes:

[GalleyTeapot]

Hardly breaking news at 7 pm, was announced before lunch!

[SilsoeSid]

Sounds like an NPAS conference, where the management told the congregation that they had come up with certain decisions after intense consultation with all the Unit Executive Officers (UEO's).

A shout came from the 'cheap seats'..."That's interesting, you have in front of you all the UEO's in the country and none of us have been consulted!!!"

[Type1106]

No, not there but question
If pension age rises to 60 what happens to compulsory retirement at 55?

Also, the man's lying again like so many before him: our pay awards were always abated by a percentage to contribute towards pension. No, not a direct contribution each month but equally not true to say we made no contribution.

Best of luck to you all, I'm so glad to be well out of it.

[FJ2ME]

So can anyone answer a quick question-if you leave after 2015 but you are not within 10 years of Full pension, ie over 44 last march, do we now have to serve until 40 to get a lump sum, pension from the end of our commission. I'm on AFPS 75 and plan to leave at 38/16 point-where do I, and thousands like me, stand? Its pretty clear what the case is for new-joiners and near-retirees but, as ever, the middle ground is left in a quagmire....This may have massive implications for people of my age approaching their 12 year option right now...

[taxydual]

Galley.

I live in rural North Yorkshire. It's cleft sticks and runners up here.

Rumour has it we're getting BBC 2 shortly. :)

[jayteeto]

I don't think you will get reserved rights. The rozzers pensions are about to be decimated. They have been given a heads up that they will have to work 17 extra years to get the SAME pension! If this goes through, potentially a bloke could leave on the friday at the 38 point with a pension. Another bloke due to leave on the next monday will have to wait 22 years......:mad:

[Whirling Wizardry]

The way I read it is that if you serve beyond your 40th birthday, you will be given a lump sum but no annual pension until you are 60; does anyone know how much that lump sum would be if you left after your 40th. Even if you are on AFPS75 it implies that everyone would be moved to the new scheme. They (Government & Mil hierarchy) are very vague in their statements. In hindsight, it was obvious that they were always looking at ways to make massive, scathing cuts to the overall pension costs. Personally, I exercised my 12-year option last year because I had absolutely no faith in whatever the new system would entsil and my IPP was 6 months after the changeover date. Another fincancial benefit to exercising your option versus PVRing is that you don't lose your flying pay;with the current 12-month PVR notice period that amounts to approx £15,000 for someone on the higher rate of flying pay. I wouldn't be surprised if the lump sum was significantly less than the current lump sum awarded at your IPP.

[Wensleydale]

I live in rural North Yorkshire. It's cleft sticks and runners up here


At least South Yorkshire still has pigeons!

[Wensleydale]

The MoD says the reforms were conceived after consultation with more than
17,500 personnel in the UK and overseas.


I notice that they do not say that 17,500 "Service" personel were consulted - they probably asked NHS nurses and teachers about our pensions....

[Elijah]

I am in the same fortunate position as Type 1106 - my pension has long been in payment. IIRC, the introduction of the military salary scheme in 1970 included an 'abatement' of the calculated salary of somewhere in the region of 9 - 12%. This, we were told, was to finance the military pension. So, when someone tells you all about the gold-plated non-contributory military pension you are going to enjoy, you can tell them they are wrong. You have contributed throughout your service by getting a smaller salary than you deserved.

[Grimweasel]

I opted for voluntary redundancy and will be leaving this Dec for exactly this reason. I thought I may as well cut and run whilst I can preserve and take what I have earned before HMG decides military pensions were unaffordable. In my opinion, the writing has been on the wall for some time.

The inference from the BBC article is that you will need to serve until 40 to get a LUMP SUM, but no mention of annual pension until 65. I had heard rumours a last year that something like this was in the offing; this formed a major part of my decision to leave. Face it - we are broke and this debt spiral for Governments has only just begun.

Bill Gross, veteran Bond Investor, wrote a good piece in the FT this week saying that Bond Yields will rally in the near future and the 30yr US T-Bond Rally will end. Governments will need to inflate their way out of debt so in the near future expect interest rates of 7-8%. The sad thing is that leaving with full pension at 38 will mean a lean few years of monthly payments that will not keep pace with inflation. The index linking will kick in at 55 I presume, unless they push the age back to 60 for everyone? I think there will be a mass exedous from the services on this news.

What a kick in the teeth at the very time the Forces have effectively saved the Olympics. Trust no one.

[Grimweasel]

Ministry of Defence | Defence News | Defence Policy and Business | New Armed Forces pension proposed (http://www.mod.uk/DefenceInternet/DefenceNews/DefencePolicyAndBusiness/NewArmedForcesPensionProposed.htm)

Better news, and relief in blue below, from the MoD site but the last comments mean if you are 45 then you are ok; but below 45 may mean you get accrued benefits up to 2015 immediately, but have to wait until 60 for the service post 2015 to be paid? :

Benefits of the proposed new scheme include:

• it creates one scheme for all - including reservists. There are currently several different Armed Forces pension schemes

• Service personnel won't have to make any personal contributions to their pension

• Service personnel will receive a tax-free lump sum and monthly income if they leave the Armed Forces at age 40 and have served for over 20 years. No other public service makes any pension payment that early

• as recommended by Lord Hutton, the Normal Pension Age will be 60 - considerably lower than for other public service pensions

• accrued pension rights have been protected so there is no change to the age at which those currently serving can draw their accrued benefits, which are based on final rank and salary

• it is in line with Lord Hutton's recommendations and other public service schemes, moving to a pension based on career average earnings rather than final salary

• all members of the Armed Forces Pension Scheme who were within ten years of their Normal Pension Age on 1 April 2012 will receive transitional protection and see no change in their pension age or the amount they receive at retirement.

[Al R]

Grim,

Yup. Thats about the long and the short of it.

[VinRouge]

******* ***** the lot of them. I would love to see what pension the MPs are due to draw.:ugh:

BALPA | Direct Entry Pilot Career Event (http://www.balpa.org/Direct-Entry-Pilot-Career-Event.aspx)

Emirates will be there. Might be worth letting them know there are plenty of us looking for a job if they change their tune on Ex Military service. BALPA membership is 24 quid per annum for current serving mil personnel and for those in ownership of a PPL whilst flying "mil aircraft on Civil register" you can use the legal services provided as part of the membership.

[4everAD]

So on transition in 2015 I'll have 25 years on 75 scheme. Are "we" saying that for the next 5 years of service to my LOS30 will give me no benefit till I'm 60?

[VinRouge]

So Al,

the short of it as far as you can tell,

Yup. Thats about the long and the short of it.

If you are on AFPS75 but are due to retire post AFPS changeover, we will still definitely get a lump sum and monthly payment our original 38 point, but to be able to claim any of the benefit from 2015 we will have to serve to 40 now instead?

AND, if you get PA, you will get your representative amount post 2015 if you were to PVR after the new 5 year PA ros? Any word on whether PA will exist past the introduction of the new employment model? Lots of hints in the last AFPRB regarding disparity between non PA and PA, I hope they arent planning to lower the bar for PA post NEW introduction.

I can sense a few bell rings down at PMA over the next week or two! :mad:

[VinRouge]

And what if we refuse to accept the terms? are we going to get an opt out without 12 months PVR?

[Al R]

Vin,

My reading is that if you have accrued the 75 benefit which would allow you thegratuity before the point of transition and if you retire after it, then yourgratuity is yours - as agreed - when you leave.

If youreach the target for AFPS 75 after 2015, and then retire a little later, thenyou get the 75 benefits when you leave and the balance as FAFPS benefits andiaw those scheme rules.

But if not, then you have to tick the 20/40 box in order to get cash, or wait.

[Al R]

Sorry Vin, I deleted my post and added to it, hence your reply before my answer (above).

I can't imagine there would be a PVR 'right', and you're in the new scheme unless you have age/service related rights. I don't know anything about that, but I guess if they wanted more to leave, now would be a genius time to have an extra round of redundancies..?

[VinRouge]

The re-written was how I understood it! Good job as the laptop was about to go through the window!

I think page 20 is the closest approximation to the situation I am in, replacing OR with Officer terms (38/16 vice 22/18).

All in all, not too bad if you have decent service under your belt and doesnt completely ruin the PA option, IF you plan to stay in till 55 on PA that is (am assuming the 75 pension is paid on final salary, not that at 2015?)

Its very confusing and I think the only way the military can deal with this is by providing a bespoke report of the scheme with realistic scenarios, for example PA for aircrew or promotion after 2015.

I am not going to hold my breath.

[Canadian WokkaDoctor]

Al R,

I took my 38 option 3 years ago and now work in Canada, I assume that these changes will not affect those of us who have already jumped ship?

CWD

[Fox3WheresMyBanana]

Hi CWD, I'm in a similar sitch. I have a letter from my last UK MP, who asked Danny Alexander, who said that no preserved pensions would be affected by upcoming pension changes. I'm due preserved AFPS75 and Teachers' Pensions.

[VinRouge]

Anyone else get the opinion they are rolling out the sh*t news during the distractions from the big school sports day?

[Canadian WokkaDoctor]

Thanks Fox3, that's a relief!

CWD

[Al R]

CWD - yes, you're safe.

[andie3]

If you opt to leave at your 16/38 point, you will receive an immediate pension and lump sum of everything you earned under AFPS75 prior to the point of transition (planned for 1 Apr 15). The remaining years will be under the FAFPS career average earning system and will be deferred until your normal pension age for this scheme as you won't have completed the required service for the 20/40 option point. However, if you choose to see out the qualifying period for the FAFPS Early Departure Payment (in effect, another immediate pension but it cannot be referred to as such) and serve until your 20/40 point, you will get this on top of your AFPS 75 'chunk'.

[fin1012]

well for those asking who the 17500 consultees were - I was one. The questionnaire I was asked to fill in was written specifically to force you to pick between 3 rubbish choices, so every time you ended up either choosing the worst of three bad options or refusing to fill it out. As an example, I think the EDD deferral options were 2, 3 or 4 years. I would imagine everyone, like me, ticked the 2 year box as the lesser of 3 evils. That way ministers can put their hands up and say 'look aren't we good? It could have been 4 years but we got it down to 2 through consultation' but of course it was always going to be 2 years anyway.

Anyone who thinks our lords and masters are doing anything to protect the troops over this needs to wake up. We have been abandoned to our fate...end of. Interesting to see how many put their money where their mouth is and leave over this. The system is about to be comprehensively broken, it will be interesting to see the retention schemes put in place in about 4 years time once the numbers leaving become unsustainable. Glad I'm out soon.

edited cos I was so angry I couldn't spell or do the grammar stuff! (twice!!!)

Rant over :)

[skaterboi]

Al R,

forgive me for asking you a direct question! I printed the document and read it through on the train this morning and it is still a little unclear due to PAS terms being completely omitted. As such any guidance you can offer is therefore much appreciated!

Background: Flt Lt, started service '98, 38/16 point '14. Just accepted PAS, due to start in '14 with ROS terms to '19. Intend to leave in '19, total service of 21 years.

I deduce that I'll get a gratuity made up of the full AFPS75 allowance plus the allowance from FAFPS for service post 2015. I then get a monthly pension of full AFPS75 plus the FAFPS part, which is then index linked at age 60. The only thing I 'loose' is the ability to commute as much as I could have done if I was solely under AFPS75.

Does this sound about right as an interpretation?

[Talk Reaction]

Skater

Rights accrued upto the changeover date are definitely protected, so you will have earned your IPP rights in '14 and if you retire anytime after that you would get your gratuity and IP, thus your deduction seems perfectly accurate to me. The further benefit post '15 will just not be as beneficial as it would have been if you hit that 21 years before '15.

I am in a similar position to you, with an IPP next summer and serving to 55 with a deferred option to leave in summer '15. I am still confident that the changes will only affect further pension increases post '15. This is going to sting those who earn their IPP rights after '15, but I think it should be minimal to our situation, unless of course you get promoted!!

[Al R]

Skaterboi,

Have you hit a FAFPS sweet spot? PAS should do well out of FAFPS and you stand to get max benefit for your career profile.

You get an immediate tick for '75 and a tick for FAFPS. IP and income from '75 and tax free cash and EDP from FAFPS in 2019, and a further rise in '75 income at 55 (CPI). At your deferred pension age (68), you then get FAFPS income which you can commute to get more tax free cash.

Talk,

Sweeter?!

[skaterboi]

Chaps, many thanks, much appreciated :ok:

[Reverend 71]

To provide another perspective on the Consultation Exercise, the FAFPS Team were bounded by the recommendations in Lord Hutton's report and actuarial discussions with Treasury, which left very little room for what could be consulted on. Provisions such as Career Average, Normal Pension Age for uniformed services moving to age 60 had to come in along with others that should be broadly welcomed (annual statements; establishment of a Pensions Board; removal of abatements; maximum accruals etc).

The clear political direction has been that as people are living longer so people would have to work longer to get their pension, including the Armed Forces. Therefore the trick that the Department somehow pulled under AFPS 05 for ORs to reduce the amount of time they had to work from 22 years under AFPS 75 to 18 years (plus reaching the age of 40) to receive an EDP was not going to run and we needed to show the Treasury 'some leg' by moving the EDP out a reasonable distance. Not to have done so could have undermined the financial value of the package as presented this week and drawn fire from other areas of the public sector who will have more significant changes introduced. Yes, we are very different from other areas of the public service and rightly deserve to have this reflected in our pay and pensions and broadly I think the pension settlement still reflects this.

The options presented in the Consultation Exercise (20/40 to 23/45) fitted with broad manning profiles being looked at by the NEM for an organisation that still needs to shed a significant proportion of its manpower at a relatively young age. There was vocal support from many for moving the EDP to 23/45, clearly as long as there was an appropriate financial reward at the end of it, but the final 20/40 point was clearly unsurprising. Moreover, from my understanding, the Consultation Exercise also clearly demonstrated the importance of the EDP income stream to SP and the 17,500 responses probably helped to see off any attempt by the Treasury to move from an income stream and lump sum to a one-off EDP lump sum payment on departure. If you consider the external workplace now with employment to 67 being seen as the norm, someone could still leave the Services at 40 under FAFPS and receive a resettlement payment (an EDP is not technically a pension) whilst employed in the civilian market for 27 years until State Pension Age. That's some resettlement period, but the Exercise demonstrated why the income stream was still valid.

So, yes the Consultation Exercise was limited, but it was never going to be a blank canvas from which a new pension scheme was going to be developed given Lord Hutton's recommendations. Also employing a forced questioning methodology in a survey to make people select from a defined series of options is an accepted practice in such surveys. If the option you wanted wasn't there it was probably because it wasn't on offer.

[Gaz ED]

Reverend,

You are Sir Humphrey, and I claim my £5.

Regards

[Red Line Entry]

Bearing in mind the pensions change was never going to be 'good' news, it sounds like at least we had some good people fighting our corner.

[Grimweasel]

Last day in RAF uniform today and I wasn't the slightest bit sad. I'm very happy with my decision to leave. A few of us commented in the bar at HWY over lunch about how many people are almost counting down their days left, almost akin to a prisoner's chuff-chart. Not the happiest place to work in the current climate.

Had an OJAR today too -pretty pointless on the last day; I derived great satisfaction from completing the 'suicide box' for the first time, where I told my 2nd RO and I suppose manning, of all the RAF's faults. I will post my rant here apres my last paid day in Dec!!

[Ginseng]

Having taken a good while to assess the effect of the coming changes, I am left in no doubt as to where the axe will fall, compared with today's Schemes. The short career (20-22 years) profile, wholly within FAFPS, when compared with the same profile wholly within AFPS 05, results in a massive loss of accumulated value of benefits up to the future State Pension Age (SPA) (and that is after making some fairly conservative assumptions about the affect of compound inflation and Income tax over the relevant periods). To some extent this is inevitable, of course, and Reverend's long post above is full of the political realities. But the result is undeniably very bad for those in the future who will not complete a full career, with the possible exception the real thrusters.

Regards

Ginseng