NEM Alignment
Join Date: Aug 2006
Location: Belgium
Posts: 254
Likes: 0
Received 0 Likes
on
0 Posts
JAJ
I'm not an expert as it didn't apply to me, but a few years ago, when the new pension scheme was announced, those with less than 10 years to go were given "preserved rights" ie they will not transfer to AFPS15 on 1 Apr this year as everyone else will. I think this was seen as a good thing at the time, and I believe it still is if you leave at 55.
However one aspect of the 75 pension (not certain about 05) is that you stop accruing pension after 55. This doesn't matter unless you work beyond 55 - which NEM is introducing - making it far less attractive - the figures in my earlier post just won't be anywhere near right for someone in that position. When NEM was announced it was emphasised that those on "preserved rights" could not change to AFPS 15 even if they wanted to.
Hope that helps a little - some of the details above will hopefully be corrected by someone shortly, but the general gist is right.
I'm not an expert as it didn't apply to me, but a few years ago, when the new pension scheme was announced, those with less than 10 years to go were given "preserved rights" ie they will not transfer to AFPS15 on 1 Apr this year as everyone else will. I think this was seen as a good thing at the time, and I believe it still is if you leave at 55.
However one aspect of the 75 pension (not certain about 05) is that you stop accruing pension after 55. This doesn't matter unless you work beyond 55 - which NEM is introducing - making it far less attractive - the figures in my earlier post just won't be anywhere near right for someone in that position. When NEM was announced it was emphasised that those on "preserved rights" could not change to AFPS 15 even if they wanted to.
Hope that helps a little - some of the details above will hopefully be corrected by someone shortly, but the general gist is right.
Not sure if it counts as an issue but your '05 pension is limited to 40 years of contributions. If you happened to have joined at 18 then you pension ceases to increase for service beyond age 58. If you joined in your 20s then you will not run into this.
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
High Spirits,
The state draws a fine line, it doesn't want to disincentivise too many people from saving via the pension wrapper. If it did drop it further though, it'd be likely to settle on £1,000,000. If it did, you could declare fixed or individual protection - but effectively leave AFPS. The downside to that is that you'd lose death in service benefits. Para 12 refers.
https://www.gov.uk/government/upload...n_Benefits.pdf
In respect of the MP's scheme, don't get me started. It had transitional protection at the 10 year point, as did AFPS, but the scheme trustees also gave themselves tapered protection for a further 3.5 years, to 13.5 years. This, despite the Brigadier in charge of army manning chopping a few redundees within days/weeks of getting an immediate pension because 'tapering wasn't an option'. Thread drift though.
The state draws a fine line, it doesn't want to disincentivise too many people from saving via the pension wrapper. If it did drop it further though, it'd be likely to settle on £1,000,000. If it did, you could declare fixed or individual protection - but effectively leave AFPS. The downside to that is that you'd lose death in service benefits. Para 12 refers.
https://www.gov.uk/government/upload...n_Benefits.pdf
In respect of the MP's scheme, don't get me started. It had transitional protection at the 10 year point, as did AFPS, but the scheme trustees also gave themselves tapered protection for a further 3.5 years, to 13.5 years. This, despite the Brigadier in charge of army manning chopping a few redundees within days/weeks of getting an immediate pension because 'tapering wasn't an option'. Thread drift though.
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
Backwards:
It might not apply to you specifically, but remember that if you opt for 'protection' and froze your pension pot, you have to take into account the annual CPI growth that would grow it (ho ho) - and any other post RAF pension savings. If it did drop to £1,000,000 you'd be a bit too close for comfort.
If anyone hasn't run the scenarios through the pension calculator, do it now! As a mid 40s PAS Sqn Ldr on AFPS75 (soon to be 15), I can leave on my 55th birthday in 10 years or so, and get about 100k lump sum plus just over 29k /yr. If I do 5 more years I get a 69k lump sum and just over 46k /yr. 17k /yr extra for a loss of 31k lump sum is a big boost even taking into account that the lump sum is tax free and the income will be taxed at 20/40%.
I see that (20x46k)+69k is 989k so below the magic 1 million mark!
I see that (20x46k)+69k is 989k so below the magic 1 million mark!
Originally Posted by Just This Once...
JAJ,
Not sure if it counts as an issue but your '05 pension is limited to 40 years of contributions. If you happened to have joined at 18 then you pension ceases to increase for service beyond age 58. If you joined in your 20s then you will not run into this.
Not sure if it counts as an issue but your '05 pension is limited to 40 years of contributions. If you happened to have joined at 18 then you pension ceases to increase for service beyond age 58. If you joined in your 20s then you will not run into this.
Join Date: Apr 2008
Location: The Frozen North
Posts: 25
Likes: 0
Received 0 Likes
on
0 Posts
PVR
(Follow-on to #38...)
IBN 13/15 revealed that the over-50s have lost any right to 6-mnth PVR and now need RoS 30 yrs+, with relevant AP 3393 Vol 1 changes etc
Totally see logic if you accept MEOS 60, but not if you 'do nothing' and expect to leave at 55
Wonder what other goalposts have moved in our T&Cs 'in the name of NEM' ?
IBN 13/15 revealed that the over-50s have lost any right to 6-mnth PVR and now need RoS 30 yrs+, with relevant AP 3393 Vol 1 changes etc
Totally see logic if you accept MEOS 60, but not if you 'do nothing' and expect to leave at 55
Wonder what other goalposts have moved in our T&Cs 'in the name of NEM' ?
Some good info Gent's! Overall, it seems to me that most aspects of pension planning are vulnerable to future taxation changes!
All your hard work might count for little so, just try to retire as soon as you can IMO!
OAP
All your hard work might count for little so, just try to retire as soon as you can IMO!OAP
Last edited by Onceapilot; 6th Mar 2015 at 16:00.
Join Date: Mar 2008
Location: Temporarily unsure of precise position
Posts: 36
Likes: 0
Received 0 Likes
on
0 Posts
Similar position to Backwards PLT - Flt Lt PAS, early 40's, AFPS 75. From playing with the pensions calculator, for those in a similar position to me there doesn't appear to be a financial downside to accepting the offer of service until 60. Compared to benefits on offer for leaving at 55, one's pension and lump sum grow gently with any additional service - until one hits 60 and the pension / lump sum situation chamges markedly as Backwards PLT alludes to (#36).
Point is - it would appear advantageous to accept the alignment offer, and nearer to retirement age calculate if-and-when one will breach whatever the prevailing LTA figure is at the time. Should one breach the LTA figure before reaching 60 (and for Flt Lt PAS it'll be pretty close!) then a 6-month PVR would still be an option, having served >30 years.
Unless, of course, I'm missing something! If any of the wise sages on this forum do spot a flaw in my logic, I and my colleagues would be immensely grateful if you would point it out.
Point is - it would appear advantageous to accept the alignment offer, and nearer to retirement age calculate if-and-when one will breach whatever the prevailing LTA figure is at the time. Should one breach the LTA figure before reaching 60 (and for Flt Lt PAS it'll be pretty close!) then a 6-month PVR would still be an option, having served >30 years.
Unless, of course, I'm missing something! If any of the wise sages on this forum do spot a flaw in my logic, I and my colleagues would be immensely grateful if you would point it out.
Join Date: Sep 2007
Location: various
Posts: 73
Likes: 0
Received 0 Likes
on
0 Posts
Tiger, you are missing something.
Leave before your 60th birthday and you don't get your AFPS 15 portion of your pension at 60, you get it at state retirement age. To illustrate this, run the pension calculator with you retiring at 60, and again retiring 1 day before your 60th birthday. The difference is eye watering. The treasury would probably be glad to see you PVR to avoid an LTA breach; they would effectively then start paying your AFPS 15 part of your pension 10+ years later than when you would hoped to have started receiving it!
Leave before your 60th birthday and you don't get your AFPS 15 portion of your pension at 60, you get it at state retirement age. To illustrate this, run the pension calculator with you retiring at 60, and again retiring 1 day before your 60th birthday. The difference is eye watering. The treasury would probably be glad to see you PVR to avoid an LTA breach; they would effectively then start paying your AFPS 15 part of your pension 10+ years later than when you would hoped to have started receiving it!
Similar position to Backwards PLT - Flt Lt PAS, early 40's, AFPS 75.
Point is - it would appear advantageous to accept the alignment offer, and nearer to retirement age calculate if-and-when one will breach whatever the prevailing LTA figure is at the time. Should one breach the LTA figure before reaching 60 (and for Flt Lt PAS it'll be pretty close!) then a 6-month PVR would still be an option, having served >30 years.
Unless, of course, I'm missing something!
Point is - it would appear advantageous to accept the alignment offer, and nearer to retirement age calculate if-and-when one will breach whatever the prevailing LTA figure is at the time. Should one breach the LTA figure before reaching 60 (and for Flt Lt PAS it'll be pretty close!) then a 6-month PVR would still be an option, having served >30 years.
Unless, of course, I'm missing something!
Al R has warned a few times that arguably the biggest risk to our pensions and tax liability is future legislation. It seems to be open-season on public sector pension schemes at the moment and the unpredictability of it all does not sit well with the commitment the Service expects from us.
Another apparent bitter pill is the loss of part of an AFPS75 pension should you PVR at any point in the future, even if at PVR you are on a completely different pension scheme. I think this is grossly unfair but it only effects those with AFPS75 service, not those who joined or transferred to AFPS05.
It is all getting rather complicated and uncertainty does not mix well with military service or pension schemes!
Another apparent bitter pill is the loss of part of an AFPS75 pension should you PVR at any point in the future
Join Date: Feb 2008
Location: The Old Cheese Emporium
Posts: 57
Likes: 0
Received 0 Likes
on
0 Posts
If you don't accept the offer to 60 I'm sure that there will be offers to extend when you hit 55. This would allow you to see out your original TOS & top up a few years if you need to, with an eye on your LTA.
Can anyone see a catch? Apart from the obvious of assuming that they will need people to stay on in a decade or so.
Can anyone see a catch? Apart from the obvious of assuming that they will need people to stay on in a decade or so.
Did everyone who was offered the 'Allignment' get 28 days to make a decision? I only ask because I have heard that the PAS board has been delayed until the end of the month............! And has anyone successfully applied for an extension to the 28 days, to ensure all the T&Cs have been researched before making a decision? (My 'HR' department weren't that aware of the various changes, and stated they needed some time to read through the various APs etc)
These terms seem likely to be a trap within the tax system even before they are introduced. Even some Flt Lt PAS @60 would bust a £1,000,000 LTA.
The balance is all wrong, you have to stay qualified, stay med fit, do what you are told, work hard and, not get killed for another 5years. And if you fall foul of the system, you can be out in 3 months with your pension delayed to state pension age...whenever that is!
Good luck folks!
OAP
The balance is all wrong, you have to stay qualified, stay med fit, do what you are told, work hard and, not get killed for another 5years.
And if you fall foul of the system, you can be out in 3 months with your pension delayed to state pension age...whenever that is!Good luck folks!
OAP
Join Date: Mar 2011
Location: Did I Tell You I Was A Harrier Pilot
Posts: 79
Likes: 0
Received 1 Like
on
1 Post
I'm a mid-40s Sqn Ldr PAS. From my experiments with the online calculator there seems to be little difference between retiring at 55 under my current terms or leaving on a PVR at 55 under the new terms. Am I just unable to derive truth from the calculator or does this sound about right? Thanks.
Join Date: Aug 2006
Location: Belgium
Posts: 254
Likes: 0
Received 0 Likes
on
0 Posts
From what I've read and heard it appears as if there is no downside to signing up to 60. Some T&Cs and the start of AFPS15 will happen whatever you do. If you don't sign up you are taking the risk that they still want you at 55 - for no gain that I can see.
Viz - put your situation through the pension calculator. I'm AFPS75 and I get my lump sum (and a pension) whenever I leave. The AFPS15 portion gives you some when you leave as well as some pension, but not the full deal until State pension age (68 for most of those here - subject to change!!).
DITYIWAHP - I think that sounds about right.
High Spirits - run it through the pension calculator choosing the "not PVR" option. I don't think that you are any worse off (or better off) if you've signed on to 60.
Bottom line - signing up to 60 has no effect on your pension should you leave at any time before 55. It has a positive effect after that because you are working longer and a big benefit if you stay until 60 as that is the age AFPS15 is designed for - THIS IS WHAT I THINK, I COULD BE WRONG (it has happened before, don't tell the wife).
Viz - put your situation through the pension calculator. I'm AFPS75 and I get my lump sum (and a pension) whenever I leave. The AFPS15 portion gives you some when you leave as well as some pension, but not the full deal until State pension age (68 for most of those here - subject to change!!).
DITYIWAHP - I think that sounds about right.
High Spirits - run it through the pension calculator choosing the "not PVR" option. I don't think that you are any worse off (or better off) if you've signed on to 60.
Bottom line - signing up to 60 has no effect on your pension should you leave at any time before 55. It has a positive effect after that because you are working longer and a big benefit if you stay until 60 as that is the age AFPS15 is designed for - THIS IS WHAT I THINK, I COULD BE WRONG (it has happened before, don't tell the wife).