FTRS Pension abatement

[downsizer]

Just been looking at a number of options....

If I understand right if I take up FTRS service when I leave my pension will be abated because I can't earn more than the day I left...right?

Also, I've heard this has been challenged successfully recently, has anyone in FTRS service heard this?

Thanks.

[Spot 4]

I have not heard about a sucessfull challenge, and I doubt it to be true.

What I do know is that the online pension calculater does not account for dynism (Sp?) in your pay and that reality could be up to 8% more than the calculator would have you believe in both final settlement fiqure and subsequent pension payments. The reason why this is important to you is that the more pension you are entitled to, the less salary potential is available given the final salary capping. Throw in 40% tax ( & PMs recent 'promise' to increase the 40% threshold was stated as 'action before the end of the next term,' ie 5 years away) and you may find that FTRS is not worth getting out of bed for. NI will also be deducted from FTRS pay despite it not being a legal requirement if you have paid your NI for 30 years. I asked JPAC for a pension forecast based upon my actual retirement date and was very pleased with the response.

Each to their own, but for me FTRS involving an early (briefing) start, long days, and a boss who keeps one eye on the clock did not represent a sound proposal for the salary being offered.

Defence Business Services
Pensions Division
Mail Point 480
Kentigern House
65 Brown Street
Glasgow G2 8EX

Pay and Pensions Enquiry Service Contact Number:

Tel: 0141 224 3600

Freephone: 0800 085 3600

Normal Opening Hours: Monday - Friday 0700 - 1900

E-mail:[email protected]
.

[Lima Juliet]

Downsizer

People have tried to challenge it without success - here is an example http://www.pensions-ombudsman.org.uk/determinations/docs/2005/Oct/P00290.doc

If you are on AFPS75 you can keep all of your lump sum and your pension that is the difference between your last day in the Regulars and your first day in the Reserves. If you go up a rank in the Reserves and you get paid more than as a Regular then you can be paid more but you can draw none of your pension until you retire or change to a FTRS post that pays less. If you commute anything into your lump sum then that is also taken into the calculation - ie. If you commute £2k per year of your pension then that will be taken out of your pension PLUS the abatement; also if you take a FTRS post that pays more than your Regular salary then that £2k will be taken out of your FTRS pay. You can leave Regular service on 1 day and join the next on AFPS75 as the pension scheme is now closed for re-entrants.

For AFPS05 it is much more complicated. Firstly if you retire before 55 to go FTRS then you need to understand that an Early Departure Payment (EDP) is NOT a pension. Therefore, if you leave for FTRS before 55 then you will get NO yearly EDP until you retire from FTRS (or possibly at 55 depending on how the transition to AFPS15 is managed). On AFPS05 you DO get a pension at 55 and so if you retire now then you should get an abatable pension at 55. Now for the lump sum. If you retire with an EDP lump sum of £36k and your final Regular salary was £48k then you would have to leave the Service for 48/36ths years (ie. 1 year and 4 months) to keep all of that lump sum. If you left for 8 months and then wanted to rejoin under FTRS then you would have to pay back £18k (ie. 8/16ths or half) of your EDP lump sum. If you lose ANY of your lump sum during the FTRS process then you NEVER get it back again.

For AFPS15 there is no abatement, however, I am unsure what 'Breaks in Service of 5 years or less will be treated as continuous Service' will mean? It could be that you have to be out for 5 years to claim or you will start paying back into the same pension pot and all payments will cease? I don't know.

Finally, abatement is a Treasury rule and applies not only to the Armed Forces but to ALL Public Service jobs - Police, Nurses, Civil Servants, Firemen, Council Workers, etc... All are subject to it.

I hope the above helps? It does come with a DISCLAIMER in that it is just my advice/opinion and that you should seek professional guidance through either JPAC/SPVA or people like Al R who is a financial advisor that understands the vaguaries of the Armed Forces' Pension Schemes.

LJ

[downsizer]

LJ

I'm on 75, till next year at least, so thats pretty much as I thought.

When you say "If you go up a rank in the Reserves and you get paid more than as a Regular then you can be paid more but you can draw none of your pension until you retire" I assume you are excluding the lump sum, correct?

[Voxpop]

The legal challenge was all about how to work out abatement following a Pension Sharing Order. SPVA were counting the full pension when they should only have been taking the reduced pension into account.

[Just This Once...]

There was talk of challenging the perceived unfairness of the annual allowance tax calculation vs the significantly lower pension received under abatement. The thinking was that it was unfair to have your tax worked out on a pension that you actually failed to receive. Not sure what, if anything, came of this.

[Lima Juliet]

Downsizer

Yes, for 75 they cannot touch the lump sum (unless you commute into it, which you will pay back monthly).

LJ

[Lima Juliet]

PS. Forgot to mention Voxpop in people you can talk to. He is something to do with the Forces Pensions Society.

Apologies...

[Wyler]

Downsizer. I was FTRS for 3 years at 2 different ranks. You are correct on all your points.

[downsizer]

Thanks guys.:ok:

[5 Forward 6 Back]

Is it possible to transfer to the reserves at an option point, and continue accruing AFPS75/15 benefits? Talking about before your IPP.

[Voxpop]

I don't know the mechanics of transferring from Regular to Reserve service but I will try to help with your pensions question.

AFPS 75 membership is not currently open to those serving in the Reserve. Excuse my cautious answer but historically those who left with an AFPS 75 immediate pension who later did an operational tour did accrue further AFPS 75 benefits. This change on 6 April 2005 when RFPS was introduced and those on FTRS/ADC commitments and Reserves on operational tours were pensionable under that scheme.

From 1 April 2015 there will be one pension scheme for the majority. AFPS 75/05 members who were age 45 or over on 1 April 2012 and RFPS members who were 50 or over on that date will remain in their current schemes but everyone else, the majority, will transfer to AFPS 15.

The introduction of AFPS 15 is good news for the Part Time Volunteer Reserve (PTVR) as it makes their service pensionable for the first time. It is in this scheme that your new device will build up. If you leave the Regulars as an AFPS 15 member and join the RTVR reserve within 5 years your service is taken as continuous. If the break is more than 5 years you will start to build up a separate entitlement.

I hope this helps.

[hullrocks]

Hi, guys, Ive read through the thread and theres still a fair amount I am not clear on. Im due to leave the Navy soon and Im looking into all avenues of employment when I leave.
FTRS isnt top of my list but its always nice to have a few options. I have a few questions even having read your posts. Ill try to keep them as simple as possible. FYI i am on
pension schemes 75 and 15 and will be looking to take up a HOME COMMITMENT contract if any, at a push LIMITED COMMITMENT.

1. I understand my pension will stop being paid BUT WILL I KEEP MY LUMP SUM. My understanding is that I will KEEP MY 75 LUMP SUM AND EDP LUMP SUM (15)?

2. If I take up a job thats 200 miles away from my home ( I would be looking to work at NORTHWOOD) will I receive GYHP. ( I did a FC 2 year FTRS contract 15 years ago and I did get GYHP
but I was FULL COMMITMENT at the time not HOME COMMITMENT)?
3. Will I be charged a higher rate for my accomodation than I do in the regular navy?
4. Finally, Im a submariner (queue sun dodger jokes) Will I keep my submarine pay (im aware of Xfactor deduction) if I am in a submarine essential billet like Northwood?