Military pension

[Topofclimb]

Anyone heard any rumours about what's going to happen to our pension with the new reduction in final salary schemes? This could be bad news I feel!

[Exiled]

SofS for Defence had some interesting things to say on on the matter during Sundays Politics Show. It's on the iPlayer if you want to have a look.

In a nutshell he said that our pensions were not going to be touched because of the unique nature of the job we do and the effect it would have on recruitment and retention.

I suspect that some very good work has been done behind the scenes to pave the way for that statement.

Whether he keeps this promise in the face of the Govt's Public Sector Pensions Commission remains to be seen.

[Wander00]

It would help the Forces Pension Society if more serving personnel joined - they not only look after the interests of us old codgers now on pension, they also do a lot of work lobbying on future pension rules. They also give very good pensions advice.

[Pontius Navigator]

Wander, can you give a short list of what they have achieved? I know they worked hard for the post-service widows pension. Lobbying for those who are still serving, and not members of the society, should not be one of their roles.

A case study they sent me to encourage me to join refered to a Brigadier who was disadvantaged because of retirement dates and inflation. I wrote pointing out the the brigadier had a rather larger pension than I did. I had a very nice letter from a Maj-Gen conceding my point. I did not join and do not know what they could do for me.

My opinion there is the same as of trades unions. They should not be concerned of amended T&Cs for people who have yet to join the union, but they do. They do, I suspect, to ensure that these new members are union-orientated from day one.

[Wander00]

Can't improve on their statement of objectives on their web site
The Forces Pension Society - Information about the pensions society (http://www.forpen.org/about-us/)

[Pontius Navigator]

Wander, thank you. I guess the key is:

"Whether you’re already retired or want to protect and maximise your Service pension in the future, now is the time to join us and support our work"

They need to get more serving members to join rather than retired members.

[Wander00]

PN - agreed. Perhaps they ought to get out more. I only found out about the Society because one of the members of the Royal Lymington Yacht Club, of which I was Secretary, was Assistant Sec of the then OPS.

[Geehovah]

Having just taken my first pension payment I worry for those who follow. With a pilot dominated Air Force, low pensions will be a push to leave. Salaries have been better since Thatcher but lower than the airlines. A pinch on pensions means (good) people will leave for the potential of greener grass. Not rocket science.

[LFFC]

Despite what Dr Fox said on TV last Sunday, it looks like the Armed Forces will have their pensions reviewed.

Millions in the public sector to pay more for pension (http://www.telegraph.co.uk/finance/financetopics/budget/7842438/Millions-in-the-public-sector-to-pay-more-for-pension.html)

As well as NHS pensions, the review will include teachers, local authorities, civil servants, police, firemen, the Armed Forces and the judiciary. But MPs, who enjoy some of the most generous pension rights in the public sector, are excluded. The review will also examine whether the retirement age should be raised and consider scrapping final salary schemes.

[Thelma Viaduct]

But MPs, who enjoy some of the most generous pension rights in the public sector, are excluded.

Scum of the highest order.

[Al R]

The bottom line is - we have to change public sector pensions - we simply have to and 'we' should all be subject to the same rules - no exceptions. If personal contributions or deferral Regs change for firemen, nurses and plod, then to retain the status we wish the Forces to retain in the hearts and minds of the public, then they must change for servicemen as well. But by focusing on MPs, you missed the really neat swerve.

MPs are still exposed to certain pensions Regs. The Prime Minister, Mr Speaker Lord Chancellor and Judges, however, are not because their particular pension scheme enables them to avoid the lifetime allowance on pensions — £1.8m this year. This means that they alone will not have to pay tax of 55% on pension income deemed to come from funds over this amount. How much did Tony Blair make again?

Judges do not get tax relief on their whopping 1.8% contributions to the Consolidated Fund scheme because it isn't a registered pension scheme in the eyes of HMRC. The Prime Minister and Mr Speaker etc may stay in the bog standard MPs’ pension scheme, which will be subject to the new tax if they wish. But somehow, I doubt it. And that is the scandal, not if HM Forces should or shouldn't have different terms and conditions to anyone else.

'In it together Mr Cameron'? Mmm.

[Al R]

PN: Lobbying for those who are still serving, and not members of the society, should not be one of their roles.

I have become a real admirer of the RBL, which I had previously thought of, as a bit of a retirement job club and talking shop. It has proved its credentials time and time again and we should put our faith in one big hitting body that has a reputation such as the one it has. I see the appeal of diversification, but I wonder if we don't spread ourselves a little thin sometimes.

[Pontius Navigator]

Al, I take your point, certainly RBL helped me with my disability pension. Also RBL ran the resettlement workshops at Tidworth and also the accommodation there.

On the Forces Pension Society, I confess I didn't click on the name, when I retired it was the Officers' Pension Society, clearly a wholly different animal as of course officers' pensions were considerably larger than the fewer, especially Army, ranks' pensions. Even so I believe they did work for all pensions not only officers.

One thing that should be brought out more is the pension proportions: civil servants 60:80 whereas Military is much less, can't remember the exact figure but nearer 50%. I know that after flying pay was deducted my full term pension, capped at 34 years even when I served more than that, was less than half pay.

[knowitall]

"The bottom line is - we have to change public sector pensions - we simply have to"

actually its not that simple (nothing re pensions ever is) and we don't necessarily "have to", though it is understandably attractive to government at this time


BBC - Stephanomics: (Some of) the truth about public-sector pensions (http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2010/06/some_of_the_truth_about_public.html)

Having said that if the "hit" is merely an extra 2.5% of income that's been rumoured I'd be inclined to take it, and keep quiet, still a far better deal than you'd get in the private sector

[Pontius Navigator]

NHS pensions, the review will include teachers, local authorities, civil servants, police, firemen, the Armed Forces

Oddly the Torygraph does not mention the Armed Forces.

[Tankertrashnav]

I've moaned about this before, but I still don't see why my first 3 years of commissioned service till age 21( I was commissioned 2 weeks before my 18th birthday) dont count as pensionable service, when if I had been in the ranks this period would be counted. The fact that I was doing my only stint of active service in Aden when I was 19 makes this even more galling.

[Impiger]

Tankertrashnav, your Service before age 21 would count if you were on AFPS 2005 rather than the old version. It was the main reason I elected to change. Of course you may have retired before the new pension was offered in which case - sorry but too bad.

Much chat about equal treatment on this thread but that's all P & W. Occupational pensions are a benefit arising from employment. Different employers offer different packages to attract, recruit, retain, motivate and reward as part of the overall remuneration. Therefore as the needs of the police, armed forces, teachers, nurses etc are all very different so too are the remuneration (including pension) packages on offer. It's no good joining a career stream and then later complaining that you don't like the pension plan; if you didn't like the salary you wouldn't have applied would you!

Interestingly the armed forces have a 'non-contributory' scheme. Which the AFPRB see as such a significant benefit they suppress your salary in return (which some might see as a contribution). It really is a good scheme thanks to all the hard work put in by the Forces Pension Society and SPPol.

[RotaryWingB2]

Tanker,

It wasn't just officers who suffered this fate, I joined up aged 16 and 3 months, the first year and 9 months don't count towards my pension either.

[Al R]

She makes the point well about making a connection between affordability and political liability. But we still have to find £1 trillion from somewhere (if you assume interest rates over the next 40 years will be realistically higher than they are now) to fill this gap in what we are supposed to have, to pay for public sector pensioners, and what we actually think we'll have. If we don't start saving now, we will be f:mad:cked later and her comparing this liability with that of for instance, free healthcare or education isn't very plausible.

I agree with your last point. Most people on between 40-50k better settle down with a stiff drink ready for the bloodbath budget.

[helo425]

Does anyone think its significant that under the 05 scheme you do not get an immediate pension lump sum but rather a resettlement grant.

As this does not include the key word 'Pension' could those on teh 05 scheme potentially loose their immediate lump sum on leaving without appearing to have had their pensions touched.

[minigundiplomat]

Just to change the subject slightly, but as someone originally from overseas, Ive never understood why the UK provides free healthcare for it's citizens and anyone else within the Western world.

To achieve this, the UK pours hundreds of billions into employing over a million people, maintaining hospitals and buying cutting edge equipment.

The point is, the NHS isn't free. It sucks up most of the tax revenues of this country.

I see a need to provide a free service for the elderly and low income households, but that aside, private healthcare would be far better run and at much less cost to the taxpayer (a residual premium for those mentioned above). The choice of providers would ensure efficiency and premiums would probably be less than the proportion of your tax allocated presently.

The rest of the world manage it, why is the NHS a sacred cow here?

[BEagle]

Good point. As a taxpayer who also pays from his military pension for BUPAcare, why the heck aren't BUPA fees allowable against tax? I'm taking the pressure off the National Patching Up Pissed Chavs Service, so why should I effectively pay twice?

While we're at it, let's have compulsory abortions for pregnant underage schoolkids.

[Tankertrashnav]

your Service before age 21 would count if you were on AFPS 2005 rather than the old version.


Well I retired long before that so, as you say, "too bad" :{. Still if that iniquitous system has changed, then at least that's something.


Interestingly the armed forces have a 'non-contributory' scheme.


Do I touch a hint of irony in your last sentence Impiger? You might have done better to come straight out and say that the system is a scam which severely disadvantages those who only serve a few years and never qualify for a pension, having been paid the "reduced" salary whilst serving

[Grimweasel]

I watched the Osbourn / Marr interview yesterday and he said that pensions would have 'accrued rights' -so what has gone before the arbitrary line in the sand (Budget onwards) would be extant. I think they have to go to the courts to change the scheme on those already signed up. I would bet that pensions to those joining now though will be nothing like AFPS75 or even 05.

[charliegolf]

PN said:

One thing that should be brought out more is the pension proportions: civil servants 600 whereas Military is much less, can't remember the exact figure but nearer 50%.

I assume you meant 60% for civil servants, PN? Mrs Golf is on an 80th scheme, so would need 40 years in to get 50%. Same with me, a teacher.

CG

[BEagle]

...a scam which severely disadvantages those who only serve a few years...

So? GET SOME IN if you want a reasonable pension!

[Mmmmnice]

Beags - sounds like your dander is well and truly up today. Would you like one of my T-shirts emblazoned with "Bring back evolution - Don't waste my taxes keeping fat smokers alive".......woops PC caption inbound

[Al R]

Tankertrash,

The Commutation provisions allowed AFPS 75 scheme members who left at or after the Immediate Pension point, but before age 55, to have an additional tax-free lump sum equal to the Terminal Grant (TG) they received and the TG they could have received if they had served for a full career. The full career envisaged was 34 years for an officer and as much as 37 years for an OR - hence the 3 year differential you mention.

The size of the lump sum is/was limited so that the recovery does not take the pension below 50% of its original value (it cannot reduce anyway, once in payment) or breach the HMRC 25% pension commencement lump sum rules. Breaching those rules would have incurred a crippling tax charge, so, the Reg was a legislative one as much as anything, and one probably intended to save you money and a world of pain.

[Pontius Navigator]

So? GET SOME IN if you want a reasonable pension!

Losing your pension input, invisible in the Forces, was not solely the province of the Forces. Mrs PN has lst her pension input more than once. In one NHS job they sent her a cheque for £21/- being her contribution at the time - no choice.

As far as nurses are concerned the NHS is anything but National.

[Tocsin]

Did anyone see the bit in the Budget - public sector pensions to rise by CPI rather than RPI? That is a cut: still index-linked, but a different and almost always lower one :(

[Wander00]

Tocsin-what does the 1975 Pension Code say on the topic? If Index is specified, then no doubt there will be a challenge, spearheaded by FPS

[F.O.D]

My leaflet explaining the benefits of the 75 pension scheme specifically states that increases in pension are calculated by using the September RPI that is applied in the following April. Historically, RPI is well above CPI (roughly by 2%). I suppose we can expect an amendment to the leaflet soon changing the index from RPI to CPI.

If my dodgy maths is correct, at the end of a 20 year retirement timescale we will all become approximately 40% worse off because of this change in the small print!!!

I am afraid that we have just been mugged by those political bar-stewards.

Best wishes from grumpy FOD

[Wander00]

If the Code says "RPI" then RPI it is, I would think. Watch ForPen go into battle!

[Blighter Pilot]

I think that also applies for AFPS 05

[F.O.D]

My copy of the AFPS 75 guide leaflet starts with a preamble stating that the document itself carries no legal basis to pension rights - the reference documents are the "prerogative instruments." (whatever they are!) If the prerogative instuments refer to RPI then so much the better. However, I suspect that they will carry a more general phrase referring to pensions being index linked or inflation proof, thereby allowing the govt to switch from RPI to CPI. I hope I am wrong, but am sure that the Forces Pension Society will be on the case ASAP.

F.O.D

[BEagle]

Would you like one of my T-shirts emblazoned with "Bring back evolution - Don't waste my taxes keeping fat smokers alive".......

No, Mmmnice, unfortunately some addicts of the tobacco weed seem unable to kick a habit that was considered perfectly normal even when I joined in 1968. Not that I have ever indulged personally.

But if you've got a T-shirt emblazoned with "Boil all drug dealers to death in a vat of their own excrement", I might be interested!

Why on earth there are any 'child welfare' payments available to the Vicky Pollards of this world who can't keep their legs together after one wine gum and who, as a result, populate the nation with the spawn of their 90 seconds of passion with some spotty chav in a Burberry hat up against the gasworks wall, I do not know.

[Reach]

While we're at it, let's have compulsory abortions for pregnant underage schoolkids.

This is of the most unpleasant sentences I've seen posted on Pprune.

[Wizzard]

This is of the most unpleasant sentences I've seen posted on Pprune.

You've not looked very hard then :E

[minigundiplomat]

the reference documents are the "prerogative instruments." (whatever they are!)


Al R explained this recently on another thread. Al, if youre reading this, could you explain?

Otherwise, PM Al R - Im sure he will explain.

[hello1]

Beags, and another thing from the budget....

Today there are some families receiving £104,000 a year in housing benefit.

Probably with a bunch of pregnant 14-year-olds under the expensive tax-payer funded roof

[Chainkicker]

Whilst Beags may be a little extreme in his views of knocked up schoolgirls, I certainly wouldn’t disagree with the general thrust of his opinion. How about prosecuting the slimy oiks that knocked them up for underage sex?? I can’t say I’ve noticed that happening much (Living in Torquay I understand we have one of the highest underage rates of pregnancy in the country).
I would prefer compulsory contraceptive implants for under 18's myself though as opposed to Beags suggestion

Anyway, hopefully back to the topic from now on :rolleyes::rolleyes:

Anyone know if the proposed changes to CPI for pension increases would be likely to affect those already in receipt of a pension ?

[LFFC]

It's not a proposal - it's been decided, and it's for everyone! :uhoh:

Budget 2010 - Para 1.43 (http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_188575.pdf)


The Government will adopt the CPI for the indexation of benefits, tax credits and public service pensions from April 2011.


To get a feel for what this means, read this:

The Practical Difference Between RPI and CPI for Benefits (http://www.touchstoneblog.org.uk/2010/06/the-difference-betwen-rpi-and-cpi/)

This means that in cash terms benefits would have gone up by 31% since 2000 under RPI, but just 20% under CPI.

Interestingly though, CPI has been greater than RPI for the last couple of years. Long may it continue! :ok:

[Scribbly520]

The legislation for the increase in public service pensions at RPI is the Pensions Increase Act 1971. The Government will need to amend or repeal this Act to effect the change.

What it means to you depends on when you retired and how long you are going to live. Those that retire late and die early will be affected the least, those that retire early and live into their 90s will be very badly affected.

If we take the last 10 years as a basis, for 8 years the CPI was lower than the RPI. For the last 2 years RPI has been lower than CPI, but that is unusual. However, in the absence of crystal ball, if we take the last 10 years as a typical cycle, the gross loss to someone retiring now at 55 and living to 85 will be 5 times their annual pension in current issue.

The Government has not said whether the uprating of pensions not in issue will be at CPI or RPI yet but my guess is that it will be CPI. If so, a serviceman discharged now at 25 and drawing his preserved pension at 65 will be drawing about 70% of the pension he would have got under RPI. Then, based on a smaller pension in issue, he will still lose 5 times its value gross if he lives to 95.

Given that the UK National Debt is about £20,000 per inhabitant, I think we have been taken to the cleaners.

Do not use these figures to make any financial decisions - they are a quick stab and anyway, no-one knows what the inflation rates will be in 6 months let alone 10 years.

[twoteapots]

Scribbly

Thanks for the gen, very helpful and puts it in perspective. I assume from your title that you are man that knows! Don't think any of us saw this one coming, but once you retire you don't have much of a voice anyway, unless you join ForPen, which I have resisted.

Having retired on my pension 2 years ago I guess I have 2 choices - cut down to 6 bottle of wine a week or send the missus back out to work!:ok:

[Al R]

The military pension is an unfunded scheme which is based on 'prerogative instruments' (PI). PIs are not subject to approval, annulment or amendment by Parliament - they derive their authority directly from HM and has a kitty which is drawn directly from the 'Consolidated Fund' (CF), so the amount is safe. The Consolidated Fund (Bill) provides Parliamentary authority to release funds requested by the Government (in this case, to pay pensions).

The annual amount required for each year to satisfy pensions is calculated and voted for in Parliament. It is usually a backbencher who is primed to stand up and propose that the MoD gets a sum of money from the CF each year, to satisfy pensions in payment. No MP is stupid/mad enough to speak against it.

Under the Naval and Marine Pay and Pensions Act 1865, PIs for the RN and RM are by an Order of Council, for the Army it is the Pensions Warrant 1977 and for the RAF it is the QRs (for the Royal Air Force). Of course, the rules can change for new entrants. It looks as if we have enough money in the CF kitty..

<<Use of resources for the year ending with 31 March 2011.The use of resources for the service of the year ending with 31 March 2011 is authorised to the amount of £218,175,405,000.>>

Prerogative Instruments (http://www.statutelaw.gov.uk/help/Prerogative_Instruments.htm)

Consolidated Fund Act 2009 (c. 27) (http://www.opsi.gov.uk/acts/acts2009/ukpga_20090027_en_1)

[aw ditor]

Does the OAP' remain on RPI?

[Al R]

Gorgeous George smugly talked about 'triple joy' which guaranteed that the Basic State Pension would rise by a minimum of 2.5%, or by earnings or 'price inflation, whichever is higher'. But he was a bit sneaky. He said.. 'From next year, with the exception of the state pension and pension credit, we will switch to a system where we uprate benefits, tax credits and public service pensions in line with consumer prices (CPI) rather than retail prices (RPI)'.

CPI tends to be lower than RPI because it excludes household costs such as council tax and mortgage payments. We overlook the fact that inflation is age specific too.. most pensioners do not have to make mortgage payments for instance, but most young familes will be spending more on children's clothes and food (VAT exempt).

His backbench lobby though, seems to have done a good job in making sure he didn't go as bonkers on Capital Gains Tax as he wanted.

[Pontius Navigator]

aw ditor

OAPs are on a win-win-win basis. They will get whatever is higher or a minimum 2.5%. "There will be no more 75p pensions increases".

Given that Mrs PN and I are on about £10000 pa that means a guaranteed uplift of £250pa.

[Al R]

There is not much mention of his commitment that the Pension Credit will have an above indexation increase in April 2011. From then on though, rises would seem extremely unlikely. This might be the calm before the storm.

Although he raised the standard personal allowance from £6,475 to £7,475, pensioners already benefit from a higher allowance starting at £9,490 - which wasn't raised. If he had, it would have eased that higher VAT bill a little.

[Melchett01]

Whichever way you look at it, it's all getting a bit much of a test of nerves regarding the military pensions. If as Fox allegedly said on the Andrew Marr show that they wouldn't be touched because of the nature of the job, retention issues etc etc, they need to come out and say as much formally and settle a lot of nerves.

Equally, if they have decided that despite Fox's statements and the change to AFPS 05 that the AFPS is still too expensive, then they need to come out and say so. But be prepared for the mass exodus of people locking in their accrued rights.

However, having already moved across to the less generous scheme, if they did decide to change the AFPS, I just don't see how they can do it in a way that isn't an administrative nightmare and hugely expensive. From what I can gather, the main way of making pensions more affordable is to either move from defined benefit to a defined contribution scheme, or if you are in a contributary scheme you pay more than you are now or you do a combination of both.

But as we are in a non-contributory defined benefit scheme, how do you guarantee existing rights accrued under one scheme whilst simultaneously moving to another scheme so that individuals have a pension made up of a mixture of both schemes, whilst trying to admininster that mix across both AFPS 75 and 05??? It was bad enough changing over to the 05 scheme, but doing this would surely be a recipe for disaster?

Furthermore, if in guaranteeing existing rights, individuals decided they were better off out of any new AFPS, that could be horrendously expensive. Roughly speaking, a Flt Lt pension is about 11k; based on current annuity rates to buy 11k income / yr would be in excess of 100k - and that's at 75 when you currently have to buy an annuity. How much do you think it would cost to buy an income of 11k / yr with annual increases and uprated at 55, to be paid for the rest of your life from age 38? I have no idea, but I'm guessing an eye-watering amount. If any new scheme was such a bad deal for members that they wanted to move out of the scheme into another scheme, surely it would cost the government more in payments to transfer out guaranteed existing rights than it would to simply pay the pensions?

I'm certainly no expert, not even an amateur, but it seems like trying to fundamentally change our pensions given how complex they are already is going to be a nightmare. Surely, with the move to AFPS 05, the sensible option is to say we can't afford it so from a date to be determined all new entrants get scheme AFPS 12 or whatever and the rest of you remain on your current scheme. Afterall, their 75 liabilities are not increasing any more and will eventually start to taper off as older 75 members die out.

Incidentally, with regard to the new tax rates, it's not just the lowering of the higher rate thresholds that you have to worry about. Increasing the basic rate threshold by 1k at the same time effectively means that anyone paying higher rate tax will have lost out by more than the 1.5K as the basic rate band has effectively be squeezed at either end.

[Al R]

Although AFPS is non contributory in the strictest sense, it has always been an attractive part of the employment contract. If you remove it, what do you replace it with, and I wonder if people would leave though? However bad things do get, things in civvie street are pro rata, invariably always worse anyway.

The g'ment is binning the Annuity at 75 rule by the way. Initially, from 2011, the age at which you have to buy one will go up to 77, but thereafter, it'll probably be done away with completely. You seem like you'd enjoy Citywire. There are more specific tabs along the top, and you can opt into some news feeds if you like.

Citywire - Financial News & Advice, Investment News & Analysis, Best Funds & Fund Performance (http://citywire.co.uk/)

[Yeller_Gait]

luchboxlegend,

then the extra payment and gratuity at 65(or if clever at 62) Care to elaborate on how it is possible to take the second payment at 62?

Also, what is your understanding of the amount of the second payment under AFPS05? I understand it to be 3 times your annual pension, index linked to age 65, can you confirm this is correct?

Y_G

[teeteringhead]

Although AFPS is non contributory in the strictest sense, ... well, up to a point Lord Copper ....

Although the pay chit shows no pension deductions per se, the AFPRB knock a certain amount off their recommendations to equate with paying for the pension...

..so how is that non-contributary?

[Al R]

Luch makes a final interesting point when he talks about annual allowances, and having enough, but 'not too much'.

Lots of military familes obsess to the Nth degree about the main breadwinner's military pension, so that if/when they take up a second career, their worries swing the other way, and they start having to be worried about being taxed too much.

But they overlook that 'even' a non working partner can get 20% tax relief on pension contributions up to £3600 pa. In other words, if a husband puts £2880 into a wife's pension, per year, the State will bump it up to £3600. Where else would you get 20% right now, plus investment growth (DV)?

Then, when you are decumalating, rather than accumalating wealth, you can make best use of 'her' annual tax allowance. Osborne announced the biggest single increase in income tax personal allowances in history yesterday, which will see the amount that can be earned before tax, rise from £6,475 to £7,475 (in April 2011).

Getting obsessed about screwing the military pension down to the Nth degree is missing the point a little and possibly becoming a little target fixated. By default, all military married couples that don't consider banging into a personal pension for the non working partner are missing the point, and the potential advantages.

[Al R]

Teetering Head,

'Lord Copper'?

I said 'in the strictest sense' because yes, in the real world sense, 'we' all know that we pay for it somehow.. 8+% or so, depending on tax status etc. The last AFPRB report that I saw put it at 7%.

[Pontius Navigator]

I said 'in the strictest sense' because yes, in the real world sense, 'we' all know that we pay for it somehow.. 8+% or so, depending on tax status etc. The last AFPRB report that I saw put it at 7%.

It was 9% some time in the early 90s and the AFPRB reduced it one % per year to 7% as it was deemed that 7% was nearer the Private sector value. Of course many things have happened in the last 18 years but AFPRB seems to have overlooked (deliberately) that the 7% might be increased again.

Of course the only way that it could be increased would be by recommending a pay rise of, say, 2% but reduced by 1% each year as the non-contributory contribution was increased once more.

[LFFC]

I read the PM's comments that "existing rights will be preserved", with some relief but that only got me thinking about how it would work in practice.

If, as I suspect, all existing members of both AFPS 75 and 05 are transferred to a new, less generous scheme, then how would their rights be preserved? I guess the logical way would be to take the benefit that a person would receive at the change-over point (say 1 Apr 11) and freeze it at that level until they finally retire. If the government are generous, then that pension level would be index linked (at CPI of course) until the person finally retires. The big question in my mind is, at what retirement age would the government let you take that frozen benefit? Will they still let you take it at age 55 or insist that it can't be taken until age 65 - or even 66?

As always, the devil will be in the detail, but I just hope the details aren’t sprung on us at short notice!! Remembering the way that new limitations still keep emerging (http://www.forpen.org/news/pension-news/life-commutation-retrospective-changes/) from the last swap 5 years ago, I'm not confident at all about the future!

[Pontius Navigator]

LFFC, I would be very surprised if there was a compulsory transfer of T&Cs.

Slightly different tack, why wait 6 years before increasing the pension age to 66? Why keep the military retirement age at 55? If we are remaining fitter, longer, then the military retirement age could be increased too.