PPRuNe Forums - View Single Post - April 2013 Pension changes.
View Single Post
Old 9th Dec 2010, 14:21
  #10 (permalink)  
Pontius Navigator
I don't own this space under my name. I should have leased it while I still could
 
Join Date: Dec 2002
Location: Lincolnshire
Age: 80
Posts: 16,777
Received 5 Likes on 5 Posts
Additionally, if you leave in March, case A, and start getting a pension, then it will receive it's annual inflation update in April, even if the forces aren't getting a payrise.
If you leave on say 1 March and receive a pension of £10,000 in April you will receive the annual pension uplift, say 3% but . . . only 1/12th as only 1/12th of your pension was paid in year 0. So your pension in April would be £10,025.

If you retired on 30 April and April pay had risen by 3% you would expect a pension of £10,300.

The following April the early retiree would receive (assume 3%) £10325.50 but our April retiree would receive 11/12ths of the uplift or £10,583.25.

This discrepancy will follow through for life and was a good reason for switching to a 12 month final salary system.

I stand to be corrected on the math but that is my understanding.

Also it is worth looking closely at the 'best 12 months in the last 3 years'. In one case I was told it was the summation of the 4 best 3 month periods in the last 3 years.

PS, ONLY in the case of a pay freeze would the March retiree gain.
Pontius Navigator is offline