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Old 31st Jul 2012, 21:46
  #133 (permalink)  
Al R
 
Join Date: Jul 2007
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Backwards,

I asked because my brain was struggling about the 5 year payback rule. Its a bit late. Don't take this the wrong way (I know you won't), but through luck and not judgment, by getting a nice salaried increase and then levelling out, you conform to the profile of the type to benefit most because the new scheme has no built in memory - it doesn't know what you did before 2015.

One of the charges levelled against these schemes is that they flatten out career profiles and dull a member's aspirations (Unions love 'em). In other words, they don't incentivise the chargers as 75 and 05 did and those who want to charge a bit more towards the end of a career may as well not bother if they are motivated by the money. Instead, they encourage mediocrity and tend to lump more people in a more tightly defined profile (actuaries and trustees like the greater sense of certainty).

In 75 and 05, members whose salary rise fastest get a better bang per buck from the scheme than those whose salary rises at a slower rate. In FAFPS, all members may get a pension which is thought to be fairer as it better reflects the earnings and contributions throughout the members’ careers. Either way, take proper advice that you trust before you do anything drastic!

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