FTRS and 05 Pension
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FTRS and 05 Pension
A little query. It appears that if your on a 05 pension, and subsequently PVR for a FTRS appointment, you lose your lump sum in total. Is this correct?
I understand your EDP is abated also in total till the day you leave FTRS appointment and then it resumes.
Will this all stay, when NEM comes in?
TVM
I understand your EDP is abated also in total till the day you leave FTRS appointment and then it resumes.
Will this all stay, when NEM comes in?
TVM
That is how I understand it - lose the lump sum but your monthly payments will start on retiring from FTRS. Give SPVA a call or email - they are the definitive answer.
There is Al R and Voxpop on here who might be able to throw their considered opinion in?
iRaven
There is Al R and Voxpop on here who might be able to throw their considered opinion in?
iRaven
Correctamundo.
Treasury rule....can't be paying you more for the same job then you were paid before.
Kind of pushes you towards a job where they wouldn't take the EDP back. Self-defeating?
Treasury rule....can't be paying you more for the same job then you were paid before.
Kind of pushes you towards a job where they wouldn't take the EDP back. Self-defeating?
Paul
Please see my post number 3 at this link: http://www.pprune.org/military-aviat...abatement.html
It is not good news I am afraid. 
LJ
Please see my post number 3 at this link: http://www.pprune.org/military-aviat...abatement.html
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.
LJ
Last edited by Lima Juliet; 15th Nov 2014 at 23:11.
If you were on AFPS75 and transferred to AFPS05 and your 'Offer To Transfer' (OTT) letter did not spell out that FTRS might affect your pension then you may have a case to challenge it with the Financial or Pensions Ombudsman: Complaining about problems with your pension scheme | nidirect
It does say that you should challenge any Occupational Pension issues with your employer first and they must reply within 8 weeks. I know that OTT was supposed to be a one-off offer with an inability to wind it back, but did the MoD make it clear that your EDP Lump Sum would be lost if you went for FTRS in the future? It should have done as FTRS was introduced in 1997 and the OTT was in 2004/5. It is certainly worth a try in my humble opinion.
Good luck
LJ
It does say that you should challenge any Occupational Pension issues with your employer first and they must reply within 8 weeks. I know that OTT was supposed to be a one-off offer with an inability to wind it back, but did the MoD make it clear that your EDP Lump Sum would be lost if you went for FTRS in the future? It should have done as FTRS was introduced in 1997 and the OTT was in 2004/5. It is certainly worth a try in my humble opinion.
Good luck
LJ
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Leon,
Succinct. Losing the EDP lump sum whatever happens, is harsh. You might have to leave FTRS through no fault of your own and you're worse off than where you were before you started.
Succinct. Losing the EDP lump sum whatever happens, is harsh. You might have to leave FTRS through no fault of your own and you're worse off than where you were before you started.
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Good spot, technically bang on, it's simply income not a 'pension' until then. Let's think about this. It's a given that if you rejoin and have a 'pension' (official terminology) in payment, it gets suspended or reduced to ensure that it, and your new FTRS pay does not exceed your old rate of pay (adjusted for inflation). But, if you join FTRS, and especially if there is a gap in employment, and if you have transfered your AFPS preserved pension benefits (as you say, still 'EDP') into a personal pension, what then?
You might not even take income from it, your personal pension might remain completely untapped or uncrystallised (lots of new tax benefits too!). If your income therefore, is lower, how would that affect your FTRS rate of pay? Your new personal pension would be an asset in much the same way an investment portfolio accrued via your salary over the years is an asset. In respect of surrendering EDP lump sum, what about reverse commutation (especially if above was achievable)?
It'd be interesting to see if the scheme rules could be lawfully interpreted to one's financial advantage and whether or not anyone has done it.
You might not even take income from it, your personal pension might remain completely untapped or uncrystallised (lots of new tax benefits too!). If your income therefore, is lower, how would that affect your FTRS rate of pay? Your new personal pension would be an asset in much the same way an investment portfolio accrued via your salary over the years is an asset. In respect of surrendering EDP lump sum, what about reverse commutation (especially if above was achievable)?
It'd be interesting to see if the scheme rules could be lawfully interpreted to one's financial advantage and whether or not anyone has done it.
No - if you stay until 55 you get a pension straight away. Then you can FTRS and keep your lump sum, and your pension will be abated as required.
It just means that (financially) an AFPS05 person would not want to PVR (before 55) to go FTRS - as the OP suggested.
To complete the OP's question, going straight from regular to FTRS (before age 55 on AFPS05) you would not get the EDP lump sum. You need to be out long enough to 'amortise' the EDP lump sum - usually about 18 months, but yes you would still lose all of your EDP annual income whilst serving as FTRS.
Al R, I think you can only reverse commute the second lump sum.
It just means that (financially) an AFPS05 person would not want to PVR (before 55) to go FTRS - as the OP suggested.
To complete the OP's question, going straight from regular to FTRS (before age 55 on AFPS05) you would not get the EDP lump sum. You need to be out long enough to 'amortise' the EDP lump sum - usually about 18 months, but yes you would still lose all of your EDP annual income whilst serving as FTRS.
Al R, I think you can only reverse commute the second lump sum.
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This doesn't answer the OP's question, but may be of interest. I understand that if you were on PAS and retire at 55 then sign on for FTRS you may actually get paid more than you did in Regular Service. As an example, say you retire as a Sqn Ldr on PAS, and take a Flt Lt FTRS post, you will be paid as a Flt Lt, with your pension abated to reflect your Sqn Ldr PAS income, however, as you are no longer PAS, you will be paid flying pay on top of your income ~ approx another £10k per annum.
Unfortunately I wasn't PAS and so didn't pass Go and did not collect my extra!
Daf
Unfortunately I wasn't PAS and so didn't pass Go and did not collect my extra!
Daf
On AFPS05 you don't get a pension until 65 - from 55 they are still EDPs and you will forfeit all of it if you go FTRS.
So just to make it clear - age 55 is the Normal Retirement Date (NRD) for AFPS05 and anyone who retires at or after age 55 will be getting a pension and NOT an EDP.
I hope that helps?
LJ
Another interesting thought to consider is something that I mentioned in the link above. As everyone with 10+ years to go will transfer to AFPS15 next April 2015, and you need a 5 year break if you join Regular/Reserve or they will re-open your pension scheme on AFPS15. Does that mean that those that transfer to AFPS15 and then leave before 55 to go to FTRS will be able to continue accruing and then take the pension at a later date?
I think it might, however, the only niggle in that plan that I can think of is that FTRS do not have a 20/40 point and only a NRD of age 60. So if you leave before age 60 then parts of your pension would be preserved to age 65+ (depending on how old your are!). But if you did stay until age 60 on FTRS then you should not have lost the lump sum if my assumption above is correct for those taking FTRS after Apr 15.
PLEASE do not take this as gospel and speak to one of the experts in Glasgow or the FAFPS Team in Main Building - and get it in writing so that you have some recourse if the rules don't work out that way!!!
LJ (sitting smug on AFPS75, thank you!
)
I think it might, however, the only niggle in that plan that I can think of is that FTRS do not have a 20/40 point and only a NRD of age 60. So if you leave before age 60 then parts of your pension would be preserved to age 65+ (depending on how old your are!). But if you did stay until age 60 on FTRS then you should not have lost the lump sum if my assumption above is correct for those taking FTRS after Apr 15.
PLEASE do not take this as gospel and speak to one of the experts in Glasgow or the FAFPS Team in Main Building - and get it in writing so that you have some recourse if the rules don't work out that way!!!
LJ (sitting smug on AFPS75, thank you!
)
Leon,
You only get a pension at 55 if you retire at 55. If you retire (PVR) before 55 it remains an EDP until 65 - (I am in that category).
This page has a pdf download link for the AFPS05 booklet - page 27 addresses early departure and page 28 explains what happens if you rejoin:
https://www.gov.uk/government/public...dance-booklets
You only get a pension at 55 if you retire at 55. If you retire (PVR) before 55 it remains an EDP until 65 - (I am in that category).
This page has a pdf download link for the AFPS05 booklet - page 27 addresses early departure and page 28 explains what happens if you rejoin:
https://www.gov.uk/government/public...dance-booklets
BN
Sorry matey, I was answering to this:
- You do get a pension before 65...if you retire at or after 55.
- From 55 they are not EDPs...they are pensions
Seems your first post didn't read quite right!
LJ
Sorry matey, I was answering to this:
I'm not sure that's correct. On AFPS05 you don't get a pension until 65 - from 55 they are still EDPs and you will forfeit all of it if you go FTRS.
- From 55 they are not EDPs...they are pensions
Seems your first post didn't read quite right!
LJ
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You are definitely right. If you serve to 55 you get your pension straight away. If you leave before 55 (and have reached the EDP 18/40 point) you get an EDP.
The EDP lump sum is recovered to the extent that it is 'unexpired' and you don't get it back if you are on an FTRS commitment/engagement. This was spelt out above.
The EDP income stream stops and restarts when you leave FTRS.
EDP and FTRS don't mix very well!
If you leave at 55 and join FTRS, there will be abatement of pension but your AFPS 05 (or 75) lump sum is safe.
The EDP lump sum is recovered to the extent that it is 'unexpired' and you don't get it back if you are on an FTRS commitment/engagement. This was spelt out above.
The EDP income stream stops and restarts when you leave FTRS.
EDP and FTRS don't mix very well!
If you leave at 55 and join FTRS, there will be abatement of pension but your AFPS 05 (or 75) lump sum is safe.
There should be no need to leave and join FTRS at 55 from next spring. My deskie told me all PA aircrew will be offered service to 60yo on current terms (ie 75 or 05).
I did some sums on the pension calculator and if I PVR aged 59.5, there's no EDP, only a slightly reduced gratuity & pension.
Perhaps it hasn't caught up with reality yet but it's certainly a question I shall be asking.
I did some sums on the pension calculator and if I PVR aged 59.5, there's no EDP, only a slightly reduced gratuity & pension.
Perhaps it hasn't caught up with reality yet but it's certainly a question I shall be asking.