I am certainly no pension expert so please feel free to ignore my personal uneducated thoughts below, and I am very much into the twilight of my career, but I am coming to terms to what is rumoured to be about a 10%reduction in real terms in my annual pension, but taxing my Gratuity/EDP would be my fear if I was outside the 10 year protection zone.
Those that are between the 38 - 45 (on 1 Apr 12) are the ones that will be affected the most, having made a choice to opt for a second career with Her Majesty rather than leaving for a potential civilian career at what some term as the optimum time, they may have considered pension rights in this decision process.
The very clever HMT that has historically taxed our graturities at 0% means that as per any other tax they can raise or lower accordingly without any requirement to consult or seek legal assurance. Therefore there is rumour that at the end of the consultation period that although accrued rights has ben retained, HMT will will simply raise the rate of tax on the gratuities of those outside the 10 year protection zone from 0% to what some believe may be in the region of 30-40% tax - (ouch
)
No act of parliament required, tax is simply in the gift of the Treasury.
Not only is that going to hurt those outside of the 10 year buffer that did elect to stay on in the belief that they were going to receive a decent pension, but also if 2015 is the cut off, then will there be a mass exodus for the door as the maths doesn't add up and it doesn't make financial sense to stay (acknowlegding that for some job satisfaction outweighs financial gain).
Or, has HMT/MOD been very very clever by suddenly announcing the 1 April 12 'lock down' date as no one will be able to leave in one month in order to avoid the tax changes. I cannot see why if the pension changes will not take effect until 2015/16, why 1 Apr 12 is being used as an arbitary date for policy decisions (especially when we have not had visibility/input into the consultation process yet)? 4 years for people to decide to stay or go (in order to gain from the old pension benefits if they so whish appears fair, and should allow AMP to allow the manning levers to manage the outflow. Raising the drawbridge in one month does not seem fair if that it is the plan?
Why not 1 Apr 2015?
I have a horrible, personal feeling that it is because everyone would try and leave before the new pesions kicked in and therefore 1 Apr 12 shuts the door nice and early.
But hopefully I am very wrong about this.