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Old 12th Nov 2011, 09:03
  #33 (permalink)  
stablelad
 
Join Date: Jul 2008
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Lunch

What the article is saying is that an individual who left on "05" scheme full pension in 2010, would be entitled to an annual CPI rated pension increase in both 2011 & 2012. So his pension will be more than another individual retiring at the end of March 2013, creating a "Pension Trough" for the later retiree. The FPS has convinced the MOD to introduce "dynamising" into the scheme thus protecting personal who retire in the period 2011 - 31 Mar 2013

So a Sqn Ldr who retires on 31 Mar 2013 would retire on a salary of £56,500 the same salary as a Sqn Ldr who retired in late 2010 but who is benefitting from the increases of CPI inflation in 2011 & 2012, so his actual pension will be more than the Sqn Ldr who has retired 2 years later.

He quotes an inflation increase of 3.1% in 2011 & a estimated increase of 3.9% in 2012, on a compound basis this would be a 7.1% overall increase, and a gives the later retiree a "new salary rate of £60,523. This means our Sqn Ldr will receive terminal benefits 7.1% greater than otherwise have been the case."

Sorry if this hasn't made it any clearer but if you can IM me I will send you a photo of the article which hopefully you can expand and read. The other option is to join the FPS at £16 a year and read the article online.
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