New Pension Calculator [Archive]

Al R

31st May 2013, 19:08

In a different sense, all hell could break loose soon anyway. Due to (for instance) the lowering of the lifetime allowance, it is making increasing sense for the younger/higher paid in the public sector to consider the pros and cons of transfering their 'pots' into alternative, quite esoteric personal pension schemes. There is one in particular which is doing roaring business with NHS Consultants. The age old maxim that the public sector scheme offers you stability still rings true, absolutely, but there are now more factors at play.

In addition, the HMRC consultation on QROPS announced the other day is going to limit options for any casual scheme member looking to outflank the regulations but with increased uncertainty in the world of defined benefit/CARE public sector schemes.. what to do?

HM Revenue & Customs: Pensions: Draft QROPS Regulations 2013 (http://www.hmrc.gov.uk/news/draft-qrops-regs2013.htm)

Flavour of the month right now, in compliancy and regulatory terms is pension busting and nearly all of it is contrary to the spirit of pension legislation and is therefore likely to result in a pension buster ('penster' - there, just made that one up) losing a lot of money for a variety of reasons. However, a senior public sector worker has (recently) become the first penster to successfully release his pension from his unfunded pension fund in a particular way that has nothing to do with working with shady companies or the scenario in Para 1.

It took him over a year to do it and he received all manner of threats of prosecution, HMRC landing on his doormat etc. If that is seen to have successfully set a precedent and if the principle is successfully applied elsewhere (ie; within another scheme) then the public sector pension landscape changes.

Lima Juliet

31st May 2013, 21:52

New Calculator? Simply awful!

Can't frig it to work out for FTRS. Can't do calcs for those with just slightly more than 10 years to serve in 2015.

Awful...:sad:

NVIS

1st Jun 2013, 07:31

Hopefully a "glitch" but you have to be in receipt of PA by 01/06/14 to work out a PA pension.

Terminal Grant

1st Jun 2013, 09:03

Just done the sums and my final pension at age 55 on AFPS using Old Pension Calculator version 9.2 versus new AFPS Calculator reflects a 3.1K annual decrease in pension at age 55! Bugger!
However, shows a 5K increase at State Pension Age (67).

Essentially, must cut down on the red vino!

kweelo

1st Jun 2013, 11:23

I know I'm being a biff and need to get financial advice from the FPS.

On the new calculator (i intend taking max communtation and am on AFPS75) I understand my communtation lump sum which I will add to my lump sum at exit - to produce one final lump sum, my reduced immediate pension until aged 55 and then my reduced deferred pension until SPA. What is - 'Increased AFPS 15 EDP income by commutation'?? Is this not applicable because I am opting for maximum commutation?

Any help greatly appreciated, I'm hoping there will be some form of briefings that will help explain in greater details.

Thanks:)

Al R

1st Jun 2013, 12:04

Kweelo,

Your '75 benefits will be treated seperately to those which you wil start to grow iaw '15. The amount that you may commute is expressed as the amount of cash in your notional pot that is surrendered in exchange for each extra £ you wish to take. The higher the Commutation Factor of the scheme (all are different), the less 'pot' you will have to surrender in exchange for cash upfront and that has a big impact, especially later on in retirement.

Each pension scheme sets out ‘cash commutation factors’ that determine the rate at which annual income is converted into a lump sum. Anyone retiring today needs to check these factors to check whether taking a lump sum makes sense - AFPS 15 allows you to transfer up to £12 per £1 per annum (up to HMRC limits).

Taking max commutation isn’t always the best option though. More of late, calculations used to swap an ongoing annual income for a lump sum today haven’t kept pace with changes in financial markets so you may be getting less than the true value of the pension you give up.

Yes, once the money is yours it can’t be taken away and it is tax free and you might need it to pay off a mortgage, yes – they are all credible reasons for maxxing out your the commuted lump sum. But be careful not to underestimate the value of having a guaranteed AFPS income for life that increases with inflation and provides for a partner after your death.

Putting your reasons to commute to one side for the moment, if you wanted to annuitise the equiv of the money that you commute, at today’s annuity rates it will cost you (at aged 60) about £41.60 to buy £1 a year of index-linked income with a 50% spouse’s pension – broadly equivalent to the benefits of AFPS. But by age 65, the cost of buying this income has fallen to £35 per £1. By contrast the commutation factor from AFPS 15 is going to be in the range of £12 for every £1 of pension income you sacrifice – at best half an annuity rate.

A more simple cost benefit analysis then kicks in. Can you predict/justify the accrued benefit of commuting (from aged 60 with AFPS 15) that sum and what you manage to achieve with it.. compared to the ongoing benefits that the ongoing income you and/or your partner will receive until you die. One more thing, at what age do you intend dying? Knowing that would help of course. ;)

Al R

1st Jun 2013, 12:25

Once a pilot, JTIDS,

Therein lies the rub. It is one thing having a pre defined and pre-determined benefit. It is even one thing to have a pre defined and pre determined benefit that isn't as good as it used to be. But having a pre defined and pre determined, not as good as it used to be and constantly moving benefit is another thing - it certainly isn't the sacred cow it used to be.

If you have 3 massive changes to any defined benefit in 10 years.. then if that doesn't contravene the letter of the law in terms of trade description legislation, it must certainly sail close to the spirit of it. AFPS used to make planning simple. Now though, it can make it harder because although you have been (rightly) encouraged to treat it as the core of your financial future, cynicism takes over - just how much faith do you place in it?

kweelo

1st Jun 2013, 14:10

Thanks Al - for you detailed reply, unfortunately you lost me after the first sentence! Though, in essence I understood most of it.

I understand your sentiment about max communtation and whether given falling pension rates, it would be wiser for me to reduce my lump sum for a better monthly pension. However, I prefer to take what I can now and worry about the future later and as you rightly point out, although I believe I am Peter Pan - I am unsure when I'm going to die!:hmm:

Having serve 28 years when AFPS15 kicks in, I am content my accrued (AFPS75) rights are protected however, in the new calculator:
I have a lump sum (a) at exit (28 years on 75 / 2 years on 15) and then having opted for maximum communtation - a commutation lump sum (b) - a+b = final lump sum. I then would receive a reduce pension until age 55 when I believe, that would be index linked, only on the AFPS 75 part.

My question, and the bit I am unsure of, is a new line on the calculator - 'Increased AFPS 15 EDP income by commutation' which for me is approx £900. Where does this figure come into things, has it already been factored into communtation lump sum or is it an additional (hoping!) annual payment??

I probably haven't explained myself well and I'm hoping there may be some briefings or examples set out in the coming weeks.

Again, thank you for your help. It is much appreciated.

Just This Once...

1st Jun 2013, 14:32

It means giving up your AFPS15 lump sum to increase your EDP. With the new scheme commutation is allowed in both directions.

Onceapilot

1st Jun 2013, 14:37

Cheers Al!
I suppose we will know the sh1t has really hit the fan when, they start reducing the pension that we have already earned. Wait....oh no, they already did with the delayed retirement age and, the 35 qualifying years:uhoh:!

OAP

downsizer

1st Jun 2013, 14:45

It means giving up your AFPS15 lump sum to increase your EDP. With the new scheme commutation is allowed in both directions.

Thats what I thought, thanks for confirming.....

kweelo

1st Jun 2013, 15:06

JTO - thanks for confirming for me.

Background Noise

1st Jun 2013, 15:43

It's still a pretty poor website/app - some of the potentially variable information, such as anticipated leaving date, is on the first page while some of the fixed data, such as which pension scheme or trade, is on later pages. So if you are looking at the effects of different leaving dates you have to go all the way back to the start. Sometimes selecting an option updates the page, sometimes it's when you click 'next'.

The results are ok as a guide, and ok for comparing the effect of things like leaving date, but the best way is to get a pension forecast from SPVA - mine came back better than the calculator suggested.

Just This Once...

1st Jun 2013, 15:47

Best to set your leaving date at age 60 and use the sliding bar to look at earlier dates - takes seconds that way.

SAR Bloke

1st Jun 2013, 17:17

But does moving the sliding bar change whether you are leaving under PVR terms or not?

If you set your leaving age at 60 and then slide the bar back, I assume it doesn't take into account the reduction in pension caused by leaving early. That could give someone a nasty shock if it doesn't.

Not being able to set a future PAS date means that the tool is effectively useless for pension forecast planning for those due to change over in the next few years.

Background Noise

1st Jun 2013, 18:21

Sliding bar??

Just This Once...

1st Jun 2013, 19:01

But does moving the sliding bar change whether you are leaving under PVR terms or not?

No but if you set that at the beginning it works fine.

skaterboi

1st Jun 2013, 19:16

As someone who starts on PAS terms in May next year (having accepted it last year) I find the fact you can't put a future PAS start date in deeply annoying :*

Just This Once...

1st Jun 2013, 19:27

Drop the RAF SO2 who is running with this a note via your OC PMS or equivalent. The speed at which they have rolled out suggested changes from a week or so a ago is pretty impressive - I am sure you will get a swift response!

Field44

2nd Jun 2013, 08:26

I know this is a forum and everyone is suppposed to be anti but as PAS (3 years so far and on the 75 scheme) the new scheme seems for me to be rather good. If I serve till 55 I will be over 10k a year better off at 67 ish (or whatever the retirement age is now), but surprisingly only slightly worse off at 55 too which I wasn't expecting. I would now invite everyone to shout me down for missing some major point etc!

3 bladed beast

2nd Jun 2013, 16:15

Field44!

No shouting from me- but of course you realise there will be another 10 pension scheme changes by the time you reach 55!

You'll probably qualify for a pension when you're 92.

Good luck mate!;-)

Onceapilot

2nd Jun 2013, 17:00

Anyone remember what the average life-expectancy is for Service personel who retire at age 55 please?

OAP

Al R

2nd Jun 2013, 21:20

OAP,

Therein lies a question!

It all depends on which service or branch/trade you're referring to. One problem is that the state these days, classifies a veteran as anyone who has served in the Armed Forces for at least one day. The results are skewed therefore, because you include recruits who throw the towel in after a day, in a truculent fit, in the same way as an RSM/Lt Col/WO or Wing Commander with 22/30 years under their belt.

Many 'genuine' vets, those who we think of as having served a while after finishing training, are affected adversely of their recent ground combat experiences (Iraq, Kosovo, Afghan, Bosnia etc) but are advantaged by better physical conditioning when set against the civvy population. The problem is made worse because many modern servicemen and veterans feel hamstrung and let down.

The traditional idea that a National Service/Cold War SNCO/WO was dined out and then bowlered off a unit, simply to keel over with a heart attack 6 months later doesn't really stand up to closer scrutiny these days. I know some young infantry vetarans who are highly eloquent; I'm not sure if they were 'different' before their service or if their subsequent experiences had an impact. This is a few years old but useful.

House of Commons - Defence - Written Evidence (http://www.publications.parliament.uk/pa/cm200405/cmselect/cmdfence/63/63we13.htm)

Whenurhappy

3rd Jun 2013, 07:15

AL-R,

Thanks for posting that link. I recall similar material when I was in town fouryears ago - about the basic literacy of recruits into Scottish regiments (average, functional, reading age of 7).

Given the material that the Army works with, they do a pretty good job, especially if one was to consider the trajectory of these kids if they didn't join the forces. Nonetheless, we - the Country - place a huge responsibility on the shoulders of these individuals in these days of the Strategic Corporal; is it no wonder that things go wrong from time to time? These guys are not social anthropologists or linguist, yet in AFG we expect them to behave as such.

Onceapilot

3rd Jun 2013, 07:37

Thanks Al, the info MUST be out there for all the benefit calculations that the Treasury makes.
Seem to remember a figure of 7 years average life expectancy for true ex-service "lifers".:(

OAP

Al R

3rd Jun 2013, 09:05

Its an interesting area - ONS doesn't compile that data (maybe it should; it'd be a wake up call if there was a big difference!). The Treasury and GAD (http://www.gad.gov.uk/Index.html) makes general assumptions - more's the pity. It would make financial planning a little clearer if there were some slightly former assumptions to rely on.

In the UK potential recruits, tend to be attracted to specific services rather than the military as a whole ('Be the best', 'Rise above the rest' etc). The army has also relied heavily on the 'It takes a soldier to recruit a soldier' so if there was a problem with the collective mindset in the first place that resulted in problems with resettlement, then all that was happening was that it was simply being repeated over and over, instead of the army looking into social pastures new.

Even within the nilitary there are niche mindsets. RAF research found that barriers to joining it included misconceptions and concerns about qualifications, career options, training provided, discipline, disruption to family life and the belief that you are cut off from civilian life. However, the main reasons found for young people not wanting to join the Army were (unsurprisingly!) being killed and badly injured, being away from home at a young age, being bullied and having to follow orders.

A little knowledge is a dangerous thing but if we assume that emotional transition is hard and starts the chain of poor readjustment which leads to depression which can lead to premature death, these Q reports make for worrying reading. I remember reading that cancer through a higher incidence of smoking and heavier drinking was to blame. Op Grapple and Porton Down trials won't have helped mind and everytime we fired the main armament in the Scorpion battoned down and without air filtration running, it must have been like smoking 40 Super Strength.

Defence Analytical Services and Advice: UK Armed Forces Quarterly Mental Health Report (http://www.dasa.mod.uk/applications/newWeb/www/index.php?page=48&thiscontent=1320&pubType=0&date=2013-04-04&PublishTime=08:30:00)

wokkamate

3rd Jun 2013, 20:01

hmmmm....does this mean that one now has to serve to age 60, as normal retirement age, or can one still retire at 55 (not on PVR)?

Also, does anyone know when the State pension age rises above 67

Yours, Confused :eek:

Lima Juliet

3rd Jun 2013, 20:31

It appears to have moved to the following web address:

Armed Forces Pension and Annual Allowance Calculator (AFPAAC) (http://www.mod-pc.co.uk/WizPersonalDetails.aspx)

Just as poor for working out FTRS stuff, which considering FAFPS15 is supposed to be for all personel (both regulars and reservists) is rubbish. :sad:

LJ

Al R

3rd Jun 2013, 21:20

Wokka,

Full benefits accrued after '15 kicks in can become payable as late as aged 60. You can take them earlier, at 55, but there will be a reduction as you trade off taking more cash upfront for less ongoing income. If you don't serve to your ADP point you will have to wait until your normal pension age before you get anything. If you make the 20/40 point, you'll get immediate payments (tax free lump sum and taxable income).

The g'ment has already announced plans to bring forward the planned increase in Basic State Pension age to 67 (to begin in 2026 and finish in 2028) and it will introduce 5 yearly reviews to consider future changes in that age. The first (5-yearly) review will take place sometime in the next Parliament, which begins in 2015. Lets face it, it'll happen as soon as the new g'ment is elected (I can't see any g'ment waiting until 2019/2020).

Somehow I don't think they'll tell us they'll be putting it back to aged 65.

wokkamate

4th Jun 2013, 06:34

Al, thank you, but it used to be clear - you retired at 55. Now is the retirement age for aircrew going to be 60? I appreciate one can leave earlier (at 55) on reduced benefits, but what is the standard retirement age please mate?

The difference on the new pension calculator between retiring at age 55 or 60 is a pretty compelling reason to stay for 60! :}

TwoTunnels

4th Jun 2013, 07:04

Maybe being cynical, but it's probably for that 'compelling reason' that not everyone (anyone?) will be re-engaged from aged 55 to aged 60.

Al R

4th Jun 2013, 09:09

Wokka,

That's one of the NEM considerations isn't it? I couldn't agree more; for some folk, hanging on until 60 will be a financial no brainer.

It depends what group you’re in. The easiest group are those aged 45 or over on April 1, 2012 who will remain on their current pension scheme, and will be able to draw their full pension at age 55 so are protected from the impact of ’15.

It seems as if it won't apply to you, but the first people outside the protected group currently due to retire at age 55 still have more than nine years left to serve (it consists mainly of JOs on PCs but also medical and dental officers on Intermediate Commissions, and some JNCOs who were aged under 18 on joining).

edit: If you're on FB, I have just started a community - search for Armed Forces Pension Scheme Help and Information Exchange (snappy huh :eek: ?). Hope to see lots of folk there.

just another jocky

4th Jun 2013, 09:25

So can I now retire at 60 instead of 55? :hmm:

Al R

4th Jun 2013, 09:42

.. the military can extend people beyond 55 already if it wants to, but I guess that'll depend on the economic climate down on Zarg?

Backwards PLT

4th Jun 2013, 10:00

The 55 / 60 question should come out when NEM is announced. Hopefully. I understand that some big chiefs are keen for it - it could save the military a fair bit of money and some are not so keen - you don't want a military full of old people. What will happen is pure conjecture - personally I believe that it will be introduced for some, perhaps defined by trade/branch but more likely by rank (SO1s and above? PAS??)

I'm not sure that they will bring it in as compulsory for those currently serving, but instead offer it as an option to those in the correct bracket.

Financially, it will be a good deal for many - retiring at 55 may be marginal but retiring at 60 with no reduction in the AFPS 15 pension plus an extra 5/47 of top end pay will be well worth it.

All pure guess work, we will find out eventually...........

EDIT: As Al said there are often options to extend beyond 55 already on a service need basis, although it is pretty mad to do so under AFPS 75, and I believe FTRS commitment is already past 55 (60?)

Mahogany_Bomber

4th Jun 2013, 11:34

When I fill in all of my details with a retirement age of 60 I appear to get no AFPS15 lump sum, I am being a biff (as usual!) or is this the case for everyone?

MB

BobbyT

4th Jun 2013, 12:47

Well my master-plan is to cut and run at my 38 pt (just prior to 15 changeover), take max commute to throw at mortgage and should still be left with 10k+ per year pension. From that point I'll start a new pension scheme with a civvie airline.... providing I can get a job.
I'd rather have a known quantity and enjoy life now rather than keep every penny for 67-68-69-70 (or whatever they eventually move it to) which I may not reach or at best be limited to how much I can enjoy the money. But that's the crux of the thing, everyone's life plan and outlook is different!

Voxpop

4th Jun 2013, 16:01

AFPS 15 does not pay out a lump sum automatically. You can opt to give up some of your pension to get a lump sum should you so wish.

JagMate

4th Jun 2013, 20:36

I've just found the link to the calculator and I'd like to pick-up on a point already covered.
Why would the calculator give a default retirement age of 60. Surely, its not been set there just to cover the v small percentage of Air ranks or those who are occasionally extended past 55. I would have thought it would be set at the most likely retirement age, allowing you to pull the bar up if required.
Therefore, I can only arrive at the following conclusions:
a. It is a cynical attempt to keep us all happy (as we will not have terms of service that allow us to continue past 55) by showing us a pension figure which is impossible to achieve.
b. The NEM really is going to offer service to 60.
What are the thoughts of those experts out there?

Lima Juliet

4th Jun 2013, 20:57

JM

FTRS already have terms of service to age 60 and some to 65. So I see no reason why Regulars can't crack on to age 60 in this age when we're all fitter than yesteryear.

LJ

http://24.media.tumblr.com/tumblr_md4onjtvEc1rr177zo1_400.jpg
Dad's Army anyone? :ok:

Al R

4th Jun 2013, 22:22

Jagmate

If it didn't illustrate to 60, I suppose that the MoD might be exposing itself to charges that it never had any intentions of introducing it? As Leon says, some can already soldier on until 60 so why not have the eldest point as the default setting?

Bobby

Why wait until you're out? If you can, make sure that you have at least considered a pension for Mrs T as well, even if she isn't a tax payer. Cue Robbie Williams.

Biggest single financial regret - Echelon Wealthcare (http://www.echelonwealthcare.co.uk/biggest-single-financial-regret/)

CAC Runaway

5th Jun 2013, 03:27

Here's a question for you regarding PAS. I went onto it recently and won't have completed the required 5 qualifying years when AFPS15 comes into effect. If I was to PVR after this point but before the 5 years are up would my pension be locked on the PAS one up to this point or would I revert back to my old pay scale?

downsizer

5th Jun 2013, 08:43

I'm confused as to what people are referring to as the "default point of retirement at 60"...? I just inputted the end of my current engagement as my retirement point, where does the 60 default come into it? Am I missing something really obvious...:uhoh::\

Sandy Parts

5th Jun 2013, 12:39

Not sure how it works with AFPS15 (I left last year), but I didn't complete the required 5 yr service as PAS and instead got an equivalent 'Specialist Aircrew' pension based on my 22 years service. This was the default arrangement (as detailed in the JSP and AP) and wasn't affected by the fact I left on redundancy (non-app). Look up the terms for PAS pensions and read the para on qualifying service. That will tell you what happens if you leave before the full 5 years. Safe to say - you'll be better off staying for the full 5! Unless the rules have changed, at least if you do go early, the pension is better (at 'Spec Aircrew' rates) than non-aircrew pension for the same rank.

Voxpop

6th Jun 2013, 07:46

Downsizer,

The age 60 bit refers to the first age at which you can leave with a pension paid immediately without the actuary reducing it to take into account the fact that it has been brought in payment early. The only exception is for those who get an ill-health pension.

If you leave before 60 (other than with an ill-health pension), for the service you give on AFPS 15, you will get a pension preserved until state pension age and, if you meet the criteria, you will get an EDP and EDP lump sum. This is on top of your protected benefits from your current pension scheme.

downsizer

6th Jun 2013, 18:03

Voxpop

8th Jun 2013, 23:04

See your PM

wokkamate

9th Jun 2013, 09:36

I think what I, and several other people, am asking is:

Will the retirement age in the RAF move from 55 to 60 with Pension 2015?

Dont care about deferred this or EDP that, just whether or not I will have to serve to 55 as standard. Clearly the pension under 15 becomes much much better if you serve to 60......

the_easy_life

9th Jun 2013, 10:44

I am a pilot 2nd tourist having served almost exactly 50% (10 years) of my commission. I took a picture of my pension under the 75 scheme last year for comparison and the figures stated below are from the 38 point (all open source).

39,411 lump sum.
13,137 per annum.

This is the new figures at the 38 point using 75/15 scheme? Using the exact same data.

20,922 lump sum.
6,974 per annum.

Are there any others in a similar situation to me where half way through my commission I am looking at getting a 50% reduction in my pension? I have tried and retried and cannot find any mistakes in my data entry but have requested a full forecast to make sure the figures are correct.

Anybody want to take a guess at what will happen if the pilots in my situation with ATPL's and significant heavy experience get told they face a 50% pension reduction on the backdrop of a possibly improving civil airline market?

VinRouge

9th Jun 2013, 10:57

Tel, there is no secret. But the treasury will not offer fri's until they see the outflow rate and IMO, not until after the next general election when they can boast about cost savings. I am seeing many first tourists get their tickets in now as there is no point in sticking round for the 1000 captains.

From what I have worked out, the fri will have to be in 6 figures to keep me in... There are plenty of jobs outside of poleing too that pay better and induce less stress. I unlike many others will stick it till 38 but I do fear for our experience levels once the outflow starts.

Al R

9th Jun 2013, 11:13

Leon,

Ref your #45, a couple of years ago, there were 230 serving beyond the age of 56.

Armed Forces: Pensions: 15 Feb 2011: Hansard Written Answers and Statements - TheyWorkForYou (http://www.theyworkforyou.com/wrans/?id=2011-02-15a.40269.h&s=Afps#g40269.r0)

Al R

9th Jun 2013, 11:27

Wokka,

There was a question asked in the House recently by the Lib Dem MP for Chip'nam (I couldn't find it). He asked that if firefighters were now 'expected' to work until aged 60, what scope was there for firefighters to retire with (full?) benefits if they failed their breathing apparatus physical tests. The reply came back that if they retired earlier, there would be that actuarially reduced benefit.

The point though, is that firefighters now seem to be targeting aged 60. I don't have any idea what conclusions or parallels may be drawn from that but there appears to be precedent. At the risk of unfairly rushing to a cynical judgement, I imagine there would be a deluge of 57 year olds failing their BA tests unless there were a reduction.

Al R

9th Jun 2013, 11:43

Vin Rouge,

Don't forget the tax on that FRI - you'd have the privilege of being an Additional Rate Tax Payer. Anyone fortunate enough to be earning more than £150,000 (included in that is the FRI of course, which will include those who it is aimed at) will see their tax rate on income over that limit reduced from 50% (where it has been since this tax was introduced in April 2010) to 45%. This group of people will pay more tax in the 2013/14 tax year than they did in 12/13 due to a rule which applies to those earning over £100,000.

If you earn more than £100,000 in the year, the tax-free personal allowance is gradually reduced at a rate of £1 for each £2 you earn over the £100,000 limit. Those earning £118,880 or more in 2013/14 will therefore have no tax-free allowance. Because the threshold between 20% and 40% tax has been reduced, those who earn between about £117,000 and £157,000 will find that they actually pay more tax than they did the year before – when those earning less and those earning more will each pay less than they did the year before.

For a 50% taxpayer, however, the tax relief on pension contributions is a serious uplift - after all, it means that you could (if it was the best course for you) make a (currently) maximum £50,000 annual contribution for just £25,000 and refer back to any 3 previous years unused allowance. That's the theory; bear in mind your AFPS notional contribution also chips away at the annual allowance. The annual allowance drops to £40,000 next year.

The Salary Calculator - Take-Home tax calculator (http://www.thesalarycalculator.co.uk/salary.php)

Just This Once...

9th Jun 2013, 11:45

I am a pilot 2nd tourist having served almost exactly 50% (10 years) of my commission. I took a picture of my pension under the 75 scheme last year for comparison and the figures stated below are from the 38 point (all open source).

the_easy_life

I've not checked your figures but you are part of a group of relatively young aircrew that my particular ivory tower is exceptionally worried about. In certain regards you find yourself forced into a group of people (informally referred to as the '05 Experiment' - a term massively out of date) that will not have the pull-factor of an immediate pension at the 16 year point.

We have already been tracking aircrew (primarily pilots) who joined from 2005. This group will start to hit their 11-year point (a traditional itchy-feet point) from 2016 onwards. Without the allure of a healthy 'pension' for 5 years further service it is difficult to see what, in financial terms, will draw them through for another 9 years for a rather paltry EDP. The gap is too wide for very little reward. Others may point at the value of the deferred pension at age 68, but that is just too far away for most.

The brutal reality for the individual and the Service is that the rate of churn will increase to a level that we may not be able to sustain. The NEM goes even further and positively embraces the up-or-out principle, yet we have no practical solutions on how we sustain this 'encouraged' (intentional or not) outflow. Many small fleets have pinch-points with OCU/Fs and increasing IPS by 30 to 50% is just not achievable.

As is often the case the financial burden has moved from one budget (pensions) to others (FLCs). The only handbrake we have to stop runaway dilution is the absence of capacity or resources to train the replacements. So we will achieve a heady mix of dilution and gapping.

The new pensions and NEM mix will work for a large % of SP and save some money. It will not work for the highly skilled element - and this group includes many others outside of the aircrew cadre.

VinRouge

9th Jun 2013, 12:37

Al, that's why I state 6 figures. I reckon if they were to pay out the fri as an increase in salary over the period of retention, it would be more of a winner, but I don't somehow see the treasury going for that one, do you? :hmm:

the_easy_life

9th Jun 2013, 12:57

Vin Rouge, Just this once,

Thanks for your replies. In my view (purely a heavy pilots one) what one lost from not joining the airlines as soon as possible after the captains ocu return of service, was made up for by the lump sum and full pension at the age of 38, + service life (which I enjoy) + service perks.

Now that equation looks to be significantly skewed by a huge reduction in pension along with continuing eroding of perks that being part of the service might not make up for. What annoys me is that I'm really enjoying my job right now but feel a significant pressure to consider other options as I have a duty to do what's right for my family as well as myself. I know the civil market isn't guaranteed but surely people like me, and the considerable amount of more disgruntled pilots than me, will see the 'airlines' as a much better option. Where will this leave sqn's, experience wise, in 10 years?

People have already made the argument to me 'you didn't sign up for the money did you' no I didn't, absolutely not. But I am entitled to be able to plan my future and with 10 years left until 38 point reductions this big are difficult to manage.

Anyway I'm getting ahead of myself. I shall wait a while and see where things sit approaching 1st April 15 and make my decision then, as I expect a lot of my colleagues will also!!

Lima Juliet

9th Jun 2013, 16:00

I read on Friday that there's going to be a New Employment Model (NEM) consultation in similar manner to that which was done for the Future Reserves (FR) 2020 consultation. It appears that they will use KPMG to do this work for the MOD.

What struck me is that they have introduced a pension before they have agreed the terms of NEM. So there is a chance that the retirement age remains at 55 but the pension starts at 60. Our chance is to get the word out on what we want in the consultation which will start in the late Summer of 2013.

LJ

5 Forward 6 Back

9th Jun 2013, 18:12

Leon,

I believe the pension and NEM are entirely separate; the NEM was never necessarily intended to consider a change in pension terms.

Someone in the crewroom recently seemed sure that the NEM won't provide any shockers and will provide grandfather's rights for most things. The pension doesn't because it's forced upon us by an act of parliament rather than a change in terms of employment decided by our paymasters. His impression was that while parliament can force us to accept a new pension, the NEM won't be able to retrospectively adjust your TOS.

So if you're in to 55 when it enters, you'll still be in to 55... it's the gap to 60/SPA and what happens with the poor guys who're about to hit 38/16 points and consider longer service if a promotion is now only tied to (say) service to 44.

I couldn't see ANYONE accepting promotion or PAS if they didn't include guaranteed service to 55 or beyond. Being out at 38 is one thing, PVRing at 34 is another, but being out on your ear at 44 without the pension benefits is fairly shocking.

5 Forward 6 Back

9th Jun 2013, 18:14

TEL,

I get the impression that they looked at the pension and realised how much money they're "wasting" by paying guys like you and me £10-13k per annum from age 38 until we cark it.

With the immediate pension gone, for guys in your shoes, there's now 2 sensible points to leave from what I can see. When you have enough hours to do an easy switch to a civil job, or at 55/60 after a full career.

The impact of losing the age 32-33 pension trap people will be interesting. With most of a tour to run until my 38 point, I only stand to lose about £500 per annum. Anyone younger than me by even just 1 or 2 years starts to lose out considerably, and anyone who joined post-2005 is stuffed. Why would you stay longer?

Just This Once...

9th Jun 2013, 18:26

So if you're in to 55 when it enters, you'll still be in to 55... it's the gap to 60/SPA and what happens with the poor guys who're about to hit 38/16 points and consider longer service if a promotion is now only tied to (say) service to 44.

There would be a few long faces if grandfather rights saw you discharged 5 years short of a full pension. I would be surprised if this was applied universally as there would be little point in staying in.

Promotion to sqn ldr will equal LOS 30 (end of Tier 2); promotion to wg cdr (Tier 3) will see you to age 60. The working assumption is that PAS will also see an offer to age 60.

Aircrew officers will be exempt from the 12 year 'up-or-out' point as completion of first OCU will trigger an offer of service to the 20 year (EDP) point.

I have seen nothing on transitional arrangements beyond the rather worrying 'single-service manning control opportunities' phrase.

As accommodation and housing charges increase as you move through the Tiers it will be interesting to see how the new pay bands work.

BlindWingy

9th Jun 2013, 19:54

Re-posted from another thread..

Don't know if this helps, but for a Flt Lt on AFPS75 leaving at 38 and living until 85...

If he leaves 1 year post being forced onto AFPS15 - total loss = £23 308

2 years, total loss= £46 567

3 years, total loss= £70 063

etc etc...

Al R

10th Jun 2013, 06:52

JTO,

Interesting.

Could be all irrelevent - if Comrade Balls is to be believed. Over the weekend, he announced that Labour's planned cap on Annually Managed Expenditure (£352 billions spent on running Whitehall, benefits, EU contributions, debt interest) would include pension spending (if Labour got elected). Two things; he'll either now spend the week removing his foot from his mouth and trying to make everyone think he isn't really the complete and utter liability that he tries so hard to make everyone think he is - or the cat is out of the bag.

What price now the triple lock? Either way, I really fear for AFPS and all public sector pensions.

VR,

If this fillet of personnel is so tightly defined, what would help it.. more money? Probably not. That sounds daft, but what des this niche want and need? Long term stability and not having to worry about being caught between the career devil and the deep blue sea. So, instead of going down the route of chucking money at something, why not be creative; why not offer a year to two's gardening leave at the end of the engagement period? It would allow a second career to be started and new coy pension benefits to start to be accrued in lieu of AFPS decimation and it might act like a laxative in the training pipeline.

Just thinking aloud; still haven't had that first coffee.

raytofclimb

11th Jun 2013, 19:05

I had a good bash on the pension calculator today, essentially to see what I'd get at 16/38 vs 44 or PVRing any year in between. There is a bulge of pilots in my peer group and the figures surprised me.

For context, I'm a 35.5 year old Sqn Ldr pilot, on AFPS 75. So my IPP is in 2.5 years, the last 8 months of which and anything thereafter will be on the enforced new pension. I am pretty sure the RAF will have little to offer me beyond 44 so I had all but ruled out staying past then. My work/life balance is levelling off!

-If I leave at 38 I get a reasonable and tempting wedge.
-If I PVR at 39 I lose £1300pa on my immediate pension and £4000 off my lump sum although my max commutation almost mitigates this but I'd also lose a year of flying pay
-Until I'm 42 this remains the case where IP and lump sums are lower than at 16/38 but the max commutation is increasing slightly.
-At 42, I've done 4 years on the new pension which when added to my 16 means the 20 year benefits of the new pension kick-in and everything jumps back above my 16/38 figures. I'm still losing 12 months of flying pay.
-By 43 I'd soak up the last year to get the best deal with my preserved 44 option. But I'd be 44.

My point? If there is a remote chance of dusting off my still valid ATPL (ok, CPL/IR with ATPL credits) in 2.5 years, why would I chose to stay and work for four more years where at any point I want to leave I lose out in addition to the loss of flying pay?

Assuming the pension calculator is at least in the right ball park, I'm off! And I suspect, many of my experienced peers too.

Ray

Just This Once...

11th Jun 2013, 20:20

Ray,

I have seen similar maths in recent days leading to similar decisions. The 'law of unintended consequences' regarding flying pay does not make it easy to retain people. Work longer and get less is clearly stupid - there was a very good reason why (pre-JPA) FP was not abated on PVR beyond the 38/16 point; to do otherwise we artificially force people at out at option points.

Anyway, if you do find yourself approaching your 38 point without a clear job ahead it is worth applying for PAS as no FP=No abatement on PVR. Could save you nearly £16k on a 1 year PVR.

Regarding PVR terms - during the AFPS15 consultation is was suggested that the abating of pension on PVR (officers only) would not be a feature of the new scheme as it fell foul of the parity argument that was part of the original AFPS05 consultation. Yet it has stayed with us for both schemes… time for a legal challenge I think...

Guest_22

11th Jun 2013, 20:45

I don't know the implications for AFPS 05, but for AFPS 75...

I am in a similar position to Ray, due to hit IPP/exit date on AFPS 75 soon after implementation of AFPS 15. Using the new pensions calculator, I am roughly £2k per year worse off (not including loss of flying pay) if I leave at IPP/exit date if it is considered to be leaving by PVR due to the new 20/40 return of service that is part of the new pension, rather than leaving at completion of service.

I am out to pasture on a last tour of duty with 2 years to run, but the implications are that there is the potential for this to be now 6 years to go if wanted/extended by AFPS 15 return of service. I am sure there are many others in this situation so I await with baited breath the promised DIN with full details of FAFPS implementation and the resultant changes to my, and many other's, terms of service.

This change of return of service has many implications which have not yet been fully briefed or understood by people (including the powers that be and Manning).

raytofclimb

12th Jun 2013, 16:23

Guest 22

" if I leave at IPP/exit date if it is considered to be leaving by PVR due to the new 20/40 return of service that is part of the new pension, rather than leaving at completion of service."

How come? I understand that if you (we) are on AFPS 75, the 16/38 point is a preserved right. Hence I told the calculator so. If you stay on but leave before 44 point, also preserved under grandfather rights, then it would be a PVR but as I described earlier at least the 20 year FAFPS benefits kick in at 42?

Don't you love the fact that we don't know and resort to a rumour network?

Ray

Guest_22

12th Jun 2013, 17:30

Ray (and everyone)

From the DIN, your accrued pension is frozen at AFPS15 introduction and not your exit date.

Compare this change to that when AFPS05 was introduced. You had to accept the new return of service that came with the new pension if you took the offer to transfer. There is no offer to transfer this time, it's compulsory! Hence exit dates have the potential to be moved...

As I said previously, I await the DIN that contains the full implementation detail so I can make a few life choices.

Guest

FFP

12th Jun 2013, 21:11

Anyway, if you do find yourself approaching your 38 point without a clear job ahead it is worth applying for PAS as no FP=No abatement on PVR. Could save you nearly £16k on a 1 year PVR.

True, but PAS does come with a 5 yr RoS from your 38 point. Only really helps if you plan on PVR'ing at year 4 to be out after 5 years.

middleground

12th Jun 2013, 23:28

Why would you PVR with a 12 month wait and loss of FP, when NGR in 18 Months with no Loss!

Only those with a concrete job offer will (should) PVR.

Just This Once...

13th Jun 2013, 05:56

middleground - if you look carefully the posts above are discussing officer aircrew.

:ok:

Al R

13th Jun 2013, 09:19

JTO,

You make some really good points – let me add to them if I might, from a different perspective; I agree completely that there is a tranche of officers which is in a pickle, but potentially, everyone is going to be in a pickle with their pension. The Lifetime Allowance changing again, to your detriment. The Lifetime Allowance is a limit on the value of benefits from your pension schemes – whether lump sums or pension income – that can be paid out without triggering an extra tax charge.

The Lifetime Allowance for most people is £1.5m in the tax year 2013-14. It applies to all the pensions you have, excluding your State Pension. In 2014-15 the Lifetime Allowance will reduce to £1.25 million. Will it affect you? Multiply your annual pension by 20, add your lump sum - what’s the number? Is it going to be over £1,250,000 (and that’s not even taking into account any post military civvy accrued benefits which may well bedefined contribution), are you considering individual protection from the Lifetime Allowance charge?

https://www.gov.uk/government/consultations/pensions-tax-relief-individual-protection-from-the-lifetime-allowance-charge

How does the new Lifetime Allowance of £1.25m affect you? Look at it this way. As it currently stands (at £1.5m) if you are on track for a final salary pension (with no separate lump sum) of more than £75,000 a year, or, a salary-related pension over £56,250 plus the maximum tax-free cash lump sum, then it will - you will incur a tax charge of 55% on anything that you benefit from (or crystalise). Note that benefits paid out to your survivors if you die also use up Lifetime Allowance.

I have just had a chat with the man at HMRC who is overseeing this latest consultation and asked him how it would affect members of a pension scheme where accrual is (nominally at least?!) non contributory. He was very nice and when he started suggested renegotiating an employment contract, even he paused mid sentence because he realised that renegotiation can’t happen with military personnel. This further latest reduction in Pension Lifetime Allowance must have an effect on anyone who aspires to the loftiest of perches and if you are one of those, its important that you get your head around this.

It makes saving a few thousand pounds here or there, with the very greatest of respect to those who are (justifiably) concerned, worried and annoyed by it, pale into insignificance – and is especially vital to those officers and airmen who are a) successful and b) joining companies after a successful military career and who DO have the opportunity to negotiate a bespoke contract. In other words, should your head really be turned by a (superficially at least) great group pension scheme which might turn out to be a poisoned chalice? It is also vital for those who become consultants – are you adding to a personal pension which is only going to present you with a tax charge of 55% when you wish to crystalise it?

Secondly, the pensions minister (Steve Webb) is starting to sound like a Discovery that has been trying to get out of the mud for ages and is only now starting to gain traction. About what? Defined Ambition pensions. Intended to reduce the difference between Defined Contribution and Benefit schemes and more ‘fairly’ (chortle) blur the boundaries of actuarial/investment/future etc risk between employers and employees, who is to say that this isn’t going to be the next big thing for AFPS?

Steve Webb: DB will be 'dead' without defined ambition | News | Money Marketing (http://www.moneymarketing.co.uk/pensions/steve-webb-db-will-be-dead-without-defined-ambition/1072348.article)

AFPS, even in ’15 format, IS still ultimately unaffordable. If you’re looking at staying in for the long haul, stay light on your feet, identify your unique financial end game, look at the macro perspective and don’t become fixated about any one particular issue that is on your radar now – if the loadie is telling you that the crew microwave isn’t working, make sure you don’t overlook the wing falling off.

Sorry for being glum; it really depresses and annoys me – no wonder there isn’t a military trade union. Someone please ply me with alcohol at Waddington tomorrow night.

Onceapilot

13th Jun 2013, 09:48

A good post Al, nicely illustrates the Lifetime Allowance.
By my calculations, a PA Flt Lt doing a bit of continuance on AFPS05 could already reach an LA of £1,000,000. :ok:

OAP

Al R

13th Jun 2013, 10:43

Lets not forget either, the fund continues to grow iaw the index of the day. Lots of NHS consultants are leaving the NHS pension scheme and starting up one or two rather esoteric (completely lawful) types of pension whereby another family member can also be party to the same pension as the (high earning) spouse but can receive a disproportionate amount of the subsequent investment growth - ideal to bolster a partner's earnings and to lower one's tax bill. Is it contrary to 'the spirit' of legislation, that latest benchmark?

Its getting to the point where you almost want to say to a client to get divorced..

"Darling, we need to talk"

"Yes darling?"

"Darling, I want a divorce"

" :{ But why?"

" :{ Its.. its.. its my Lifetime Allowance, I need you to take me for a 50% Pension Sharing Order".

JagMate

13th Jun 2013, 19:58

Just This Once

Where are you getting your gen from.

Will it be part of the NEM that those at Wg Cdr & above will get TOS to 60?

Just This Once...

13th Jun 2013, 20:15

JM,

Rumour network, no sources revealed...

As said previously, the NEM is not set in stone but yes, the current proposal is wg cdr = offer to age 60. I have still seen nothing on transitional arrangements and given that the presentations at stn level start this summer it all looks a little last minute dot com.

Al R

17th Jun 2013, 13:13

Hot off the presses; the triple lock might still have a pulse, but its getting fainter by the day and won't last beyond the next election - certainly not so, given Harriet Harman and Ed Balls' comments the other day. I'm only surprised that I'm surprised. This of course, will have an impact on military pensions in payment and in anticipation of payment.

Steve Webb warns UK pension rises are at risk | News | Pensions Insight (http://www.pensions-insight.co.uk/steve-webb-warns-uk-pension-rises-are-at-risk/1471796.article)

(free FT log in required)

Jumping_Jack

17th Jun 2013, 15:16

fin1012

17th Jun 2013, 17:58

So here is something that I hadn't really thought about until I had a play with the calculator after someone mentioned revised TOS possibly taking you to age 60. I am on AFPS75 and within my last 10 years of service, so anticipate leaving in 2017 without being affected by any of the 2015 pension stuff. But if I did serve longer (purely hypothetically as even hanging in there until 55 is looking like a bit of a struggle) I will have hit 34 years service and the pension stops increasing year on year under the terms of AFPS75. Is this what happens to people currently who are extended? I understand that the AFPRB annual pay rates are reduced by an amount that equates to a personal pension contribution....so I would in effect be making pension contributions for no return, while also working for half pay as I could leave at any point and generate a pension that paid half my salary. Is this correct or have I missed something. If it is, why would anyone do that?

Just This Once...

17th Jun 2013, 18:23

Fin, you are correct that service beyond 34 years for AFPS75 offers little reward beyond the salary. The recognition of the pension in our pay calculations is a bit of a red herring.

AFPS05 is better in this regard, as is AFPS15. Otherwise FTRS may be the best option for service beyond 55 for those with an AFPS75 background.

downsizer

17th Jun 2013, 18:48

NEM Briefs start tomorrow....as of last friday the scripts still weren't finalised....I suspect they've been busy today! It seems that the 'NEM Hierarchy' are currently wondering how they are going to spin the briefings to hide the fact that we are all to be shafted in the very near future. http://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/censored.gif

Any idea where or when? Nothing heard at my location....

fin1012

17th Jun 2013, 18:54

JTO, thanks for that - hopefully hypothetical anyway!

Just This Once...

17th Jun 2013, 19:25

Any idea where or when? Nothing heard at my location....

Didn't know it was starting tomorrow (!) but the outline draft went to stn cdrs and OC Admins/Base/etc a few weeks ago. The whole thing was supposed to start with a Ministerial piece; I guess things have changed.

Al R

17th Jun 2013, 20:11

Anyone within 10 years of their normal retirement date wef 1 April 2012 will not be transferred to '15. But if service continues until aged 60, how do you compensate the older service men/woman for the (in effect) loss of pension accrual who may currently still have up to 15 years in '75 to serve out?

In the new scheme, the maximum accrual cap is abolished to allow accrual for the duration of paid service, so if you hit 34 years in '75 by 2015 (assuming you're over aged 46 now), can you buy Added Years (somehow) or for '15 I wonder? No tables as yet, although reference is made to 'actuarially fair' computations. HMRC guidelines would still apply, but there may be scope.. otherwise, would there be a pay adjustment to compensate for the discrepancy or will it be a case of "c'est la vie"?

fin1012

17th Jun 2013, 21:24

Al R, That was my thought - although well aware how good my pension deal is compared to many, it does make me wonder if they have thought this through. Presumably if they want to offer some folk service to 60, they are hoping some will take it...at the moment though it doesn't seem to offer much in the way of an incentive pension wise

Al R

17th Jun 2013, 21:48

Maybe they'll be hoping that a Wing Commander or MACR won't be focusing too heavily on the pension benefits; that they'll be basking in the autumnal glow of 5 more years top notch salary and (potentially) a further decent CARE accrual rate - especially if they joined late. It does create a potential sticky wicket though - do you open up a new career stream; one that accepts the sacrifice of further AFPS accrual for the extra years? Who might the idea appeal to? How about someone who was made the subject of a pension sharing order in his/her 40s and who might look on the new potential career extension as the ideal opportunity to regenerate a fresh, independently worthwhile retirement fund.

But if accrual is uncapped for '15; surely, there must be grounds for a crewroom (at least!) judicial review if there is a compulsion on that person who has to remain on '75 and who is discriminated against by being unable to grow those benefits. AFPS Trustee/HMRC guidance prevents Added Years bolt ons after aged 46 or worthwhile additional contributions, so what to do? Maybe simply allow scheme transfer if it proves to be in the scheme member's interests - we always assume that movement won't be - but it might be.

Melchett01

17th Jun 2013, 22:25

It seems that the 'NEM Hierarchy' are currently wondering how they are going to spin the briefings to hide the fact that we are all to be shafted in the very near future.

JJ - by that I assume you mean the worst of all worlds: for the majority, service to 55 but no pension until 60 or later and 5 years scrabbling round trying to find a job to fill the gap?

Or is there something else I might have missed? Not being in a light blue environment for the best part of 4 years, I'm definitely not up to speed and I didn't even know the NEM briefings were being rolled out this week.

Jumping_Jack

18th Jun 2013, 08:11

Any idea where or when? Nothing heard at my location...

We're getting a brief this week....19th or 20th

junket

19th Jun 2013, 05:40

NEM consultation launched today in MOD followed by DIB and IBN. Roadshow briefs commence from around early July. Consultation activity in and around 4 or 5 key RAF locations, ie Lincolnshire, Oxfordshire etc consultation through July, bit of August and into September.

From what I understand this is a proper consultation exercise with a civ contractor brought into facilitate discussions. Fair amount of money has probably been spent on it from what I gather.

Also understand that key decisions haven't been made yet so feedback from us is vital. More flexibility to this over and above the pensions one as it isn't cross departmental.

Time to get involved!

ALM In Waiting

19th Jun 2013, 06:21

Thanks for the gen Junket.

davidbriancomerford

2nd Jul 2013, 04:58

1. I am 55, I left the service in 1987, am I entitled to a pension now?
2. Where can I locate the online calculator?
3. I now live in Peru, last month however, I lived in Barcelona, Spain. The relevant authorities do not want to communicate with me anymore via email, and insist that I telephone them, with what I´ve read so far, these guys are not the most efficient, can anyone suggest a good approach?
4. A separate matter than the subject heading, it involves the non payment of a sign-up bonus (I originally signed for 3 years, but terminated my service after 11 years (+8 years)). I didn´t receive the incentive, and they cannot prove or disprove it either way, because they had paper records back then - not computers!

The_Agent

4th Jul 2013, 15:39

I am 33, and intend to take my option and leave at 38 under AFPS 75.

Thanks to the new pension, my commuted lump sum is about £10k less, and I will receive about £2k pa less on my immediate pension. I won't qualify for any EDP.

Adding up all the numbers between age 38 and age 70, I have calculated that I will receive £70k less in that period.

What annoys me is that this is, essentially, welshing on the contract I entered into with the RAF when I joined in 2001. My side of the contract remains unaltered, though.

Having recently accepted a new post, I am on a 3 year RoS, so I can't even vote with my feet. In fact, there's nothing stopping the RAF from deciding not to pay me anything for the next few years - and there is nothing I can do about it.

Anyone on a RoS in 2015 is being entered into a new contract without consultation. In the civilian world, a change to employment contract would involve terminating the old contract and all parties signing a new one.

My point: if you are going to move the goal posts, allow me the option of leaving. It seems morally bankrupt to adjust one side of the contract (pay) without concession to the other. The moral thing to do here would be the same as AFPS05 - put all new recruits on it and give people the option to switch to it.

The push/pull factors are changing all the time.

m0nkfish

4th Jul 2013, 17:12

Add me to that list, I'm in almost exactly the same situation. I still have the pam-air leaflet the RAF gave me when I joined up explaining the pension I would get.

Yes I know that FAFPS is still a good pension. But we have all worked hard for the entitlement they said we would get and now they are changing the conditions with many locked into a ROS that doesn't give them the option to just 'walk'. For me the precedent has been set now and nothing is sacred, leaving me worrying about what they will change next. Leaving seems to make the most sense, I know life is probably going to be harder on the other side of the fence, but at least my family can settle down, my children can attend the same school for more than 3 years, my wife can find employment and I can start claiming child benefit again! In fact, on two meagre wages we will probably be better off anyway.

That the government claims AFPS75/05 is unaffordable with one breath and then decides to award MP's a large pay rise when we are meant to 'all be in it together' makes the pill that much more difficult to swallow.

Onceapilot

4th Jul 2013, 18:58

I do not trust that the lump sum payments will remain tax-free either. Such a change could come after the pension is changed and, it will not be a change of pension but a change of taxation!:ouch:

OAP

gr4techie

15th Jul 2013, 20:06

I second what Monkfish is saying.

When I signed the contract all those years ago, I was under the impression that I work for the RAF for 22 years (most of my life given to the raf) and in return they give me the pension they said they would.

I'm angered that after all them years, they can change the pension goalposts and give me less than what I signed up for.

Did someone day there's a retention problem? I wonder why?

Al R

16th Jul 2013, 07:19

We look at this from the modern perspective of low income tax - who remembers the days of Income Tax being 35%+? We have come to the end of a 30 year period of low income tax and great benefits - that policy wasn’t sustainable. What do you do, pre-load the pain or tack it on at the end or both - and let’s face it; who knows what rate income tax is going to be in 5 years, let alone 25 years?

Lima Juliet

16th Jul 2013, 14:33

Al

With my income, I must pay 30-odd percent now :eek:

First £6k is free (I had a little underpayment last year!)
The next £30-odd at 20%
The last £30-odd at 40%

LJ

Al R

16th Jul 2013, 15:00

Leon,

You'll pay far more than that; don't forget that NIC masks the headline rate. Higher rate National Insurance was doubled in 2011 to 2% for higher-rate tax payers (on top of the 12% contributions deducted from earnings below that level).

In 1973 - income tax made for interesting reading. Standard rate of income tax was 38.75% with earned income relief of two-ninths up to £4005 and then 15%. Single person tax free allowance was £460, married couple £600. Single person tax on earned income of £1000 was (on average) 12.3%. Tax on earned income of £10,000 was 38.6% and tax on earned income of £100,000.. well, 71%.

Unearned income £1000 was 20.9%, £10,000 58.8% and £100,000 85.5%. Married couples with children had higher tax free thresholds.. not surprising there was a brain drain with income taxes at these sorts of levels. As a rough guide, £1000 in 1973 is now £10,400, and married women's earnings were added on to those of her husband.