Final-salary Pension under threat!

[Al R]

Vecvec,

My pensions experience is not so much Trustee based, but rather, using AFPS as part of an overall investment and retirement strategy (as an IFA). And although I know AFPS inside out (I have one!), I wouldn't claim to know specifically how the MoD and Parliament is going to change it in the future.

Having said that, my working days at the moment seem to revolve around JSP 764, offsetting AFPS AVC calculations and The Armed Forces (Pensions and Compensation) Act 2004. So, talking of which, and in keeping with your question, it was amended in 2004 to read (rather opaquely and ominously)..

(1) The power of the Secretary of State to modify an armed forces pension scheme may not on any occasion be exercised in any manner which would or might adversely affect any entitlement, accrued rights or pension credit rights of any member of the scheme acquired before the power is exercised unless—

(a) the consent requirements are satisfied in respect of the exercise of the power on that occasion in that manner, or

(b) the scheme is modified in the prescribed manner.

(2) The consent requirements are those prescribed for the purpose of obtaining the consent of members of the scheme to its modification.

(3) In this section—

• “prescribed” means prescribed by an order under section 1,
• “accrued rights”, “entitlement”, “member” and “pension credit rights” have the same meanings as in Part 1 of the Pensions Act 1995 (c. 26).

The cynic would suggest of course, that in 2004, everyone already quietly knew that the principle of the Public Sector Final Salary pension was fast becoming unsustainable. In general terms, it is always in everyone's best interests to start taking responsibility for their own financial futures anyway, and to create a personal financial plan - and not to wait for events to arrive from a great height at their door (if in doubt, recce out..?).

PS: Diablo,

Add to that list, toilet paper manufacturer..?