To provide another perspective on the Consultation Exercise, the FAFPS Team were bounded by the recommendations in Lord Hutton's report and actuarial discussions with Treasury, which left very little room for what could be consulted on. Provisions such as Career Average, Normal Pension Age for uniformed services moving to age 60 had to come in along with others that should be broadly welcomed (annual statements; establishment of a Pensions Board; removal of abatements; maximum accruals etc).
The clear political direction has been that as people are living longer so people would have to work longer to get their pension, including the Armed Forces. Therefore the trick that the Department somehow pulled under AFPS 05 for ORs to reduce the amount of time they had to work from 22 years under AFPS 75 to 18 years (plus reaching the age of 40) to receive an EDP was not going to run and we needed to show the Treasury 'some leg' by moving the EDP out a reasonable distance. Not to have done so could have undermined the financial value of the package as presented this week and drawn fire from other areas of the public sector who will have more significant changes introduced. Yes, we are very different from other areas of the public service and rightly deserve to have this reflected in our pay and pensions and broadly I think the pension settlement still reflects this.
The options presented in the Consultation Exercise (20/40 to 23/45) fitted with broad manning profiles being looked at by the NEM for an organisation that still needs to shed a significant proportion of its manpower at a relatively young age. There was vocal support from many for moving the EDP to 23/45, clearly as long as there was an appropriate financial reward at the end of it, but the final 20/40 point was clearly unsurprising. Moreover, from my understanding, the Consultation Exercise also clearly demonstrated the importance of the EDP income stream to SP and the 17,500 responses probably helped to see off any attempt by the Treasury to move from an income stream and lump sum to a one-off EDP lump sum payment on departure. If you consider the external workplace now with employment to 67 being seen as the norm, someone could still leave the Services at 40 under FAFPS and receive a resettlement payment (an EDP is not technically a pension) whilst employed in the civilian market for 27 years until State Pension Age. That's some resettlement period, but the Exercise demonstrated why the income stream was still valid.
So, yes the Consultation Exercise was limited, but it was never going to be a blank canvas from which a new pension scheme was going to be developed given Lord Hutton's recommendations. Also employing a forced questioning methodology in a survey to make people select from a defined series of options is an accepted practice in such surveys. If the option you wanted wasn't there it was probably because it wasn't on offer.
Last edited by Reverend 71; 3rd Aug 2012 at 09:02.