About To Pvr - Advice?

[appleavi8or]

I'm PA and due to end service at the end of next year. I'm also just about to PVR via JPA but have been having a goat with SPVA on pension issues and someone just told me that I will also go onto a different Pension Rate for PVR.

I don't think that's the case as I've done my time but I would be grateful for any other gotchas I should know about before actually submitting my resignation.

I'm planning to use my resettlement time to do some fixed wing flying - perhaps an Instructor rating - any advice here too would be welcome.

Thanks PPruners./

[F3sRBest]

There are differences in Pension/gratuity between leaving at an Option or PVR. Try the online Pension Tool.

[Climebear]

As F3sRBest said.

AFPS75 for officers pays an enhanced rate of pension for those officers that leave the service at one of the specified exit dates (ie 38/16, 44(RAF only), and 55). Or it could be, and is, interpreted that a pension on PVR is reduced. The differential between the 2 rates reduces the closer one gets to a full pension (ie 34 years reckonable service for officers).

[Tiger_mate]

If you are PA and PVR you will receive Early Departure Pay (EDP) rather then immediate pension. Your lump sum will be less but not by a great ammount. Your pension (payable from 55th birthday) will be quite a bit less at age 55 (-10k ish) but you will get a second lump sum at age 65 that you would not get if you 'time serve'. Assuming you live beyond 65 it is my understanding that overall you will not be financialy disadvantaged. The rule of thumb is: If you intend to carry on working, then PVR works. If you want to retire outright, then bite the bullet and do the time and in doing so get the maximum lump sum and maximum pension for the word go. Either way; Good Luck, there will be many others following once the Redundancy details are released.

[orgASMic]

Bear in mind that, at the moment, once you PVR:

You cannot change your mind.
It won't stop you going OOA.
You won't get made redundant.It is a tough decision. Good luck, whatever path you choose.

[Al R]

Thinking laterally for the moment apple, the MoD/Treasury is shortly to make a final report about the carrying forward of unused annual pension contributions (tax relief) from the previous 3 years. If you have a chunk of cash sitting around after April next year, it might be worth still being in place to be able to capitalise on 40% tax relief into your pension before you retire (and before you possibly lower your marginal tax rate).

Of course, you could still do something else with it - just a thought.

[appleavi8or]

Thank you for the valuable comments so far. I'm in an unusual position having been on '75 and in receipt of that for a while but now on '05 as PA. I'm also a smidge beyond 55 so I don't think the pension calculator is much use as it simply doesn't cater for that - hence the goat with SPVA.

I also understand that I must give 6 months notice - I assume that is calendar months rather than 6 x 4 weeks.

This all sounds a bit naive but I'm a little out on a limb and it is really difficult to get any sort of definitive answer from anyone in the 'system', particularly as they seem to have no liability for giving incorrect information.

Essentially I want to take full resettlement, want to give minimum notice and don't want to find any surprises lurking around any corners once I have popped it into JPA.

Thanks for the good stuff so far.

Apple

[I'm Off!]

orgASMic, you can only be sent OOA by the RAF if they have informed you of it prior to your PVR through JPA. Any OOA liability informed prior to PVR must still be served.

My first thought would be, don't. Unless you have a job to go to straight away. They may well waive the 6 months notice as they need to lose people in a hurry - great if you have a job to go to, not so much if you don't and you were planning to use that time to sort things out.

May be worth hanging on til March/April to see where things are when the dust settles. Also worth remembering the Flying Pay hit if you PVR - if that applies to you.

Just a few thoughts...

[nav attacking]

If I were you I would go and speak to your resettlement officer about the timing fo your PVR. Don't forget that you are paid whilst on resettlement and there are some cases where you can be on a work placement up to 7 weeks, that is if you want to now you are over 55. Also don't forget to include your terminal leave and any unused leave when working out your exit date. A top tip we heard the other day is to PVR on bank holiday, 3 days extra pay! If you are really lucky you may be able to drag it all out to get a further increment on your pay and hence pension. (if you have any left)

If your resettlement officer is unapproachable then I suggest you speak to Richard Puddy at the Training and Development Flight at RAF Kinloss, he was the one giving us all the advice and tips last week.

Best of luck, you may even be able to drag it out longer than those of us about to be made redundant!

[Ringroad]

Appleavi8or
OK, 6 months notice to leave is 26 weeks. From that period take off 28 days terminal leave (5 .5 weeks), 35 days (7 weeks) Resettlement training time and the remainder of your annual leave. I also had 15 days leave carried forward from the previous year. Don’t forget that you are earning leave up until your last day of service, so add that on as well not forgetting public holidays.
Work back from your last day of service adding all of the above and you come to a last day at work date. You will probably find that this is about 8 weeks after the date you submit your PVR.
Note that resettlement is duty not leave and you must attend an approved activity. Pole Dancing classes and croupier training in Spain have been approved in the past. I did a work experience placement with my future employer. I worked 4 days a week with the fifth day being taken up with RAF admin (of which there was a lot), gym, reading papers in the Mess etc. This extended my resettlement to 8.5 weeks.
Best of luck

[kiwibrit]

Bear in mind that, at the moment, once you PVR:
You cannot change your mind....Actually, I did - and got away with it - in the late 80s, mind you. Even in those days, there was no right to change one's mind - I was just very lucky that the Service still had a use for me. I can well imagine that in today's circumstances the chances of being able to change one's mind is remote - but I guess the possibility may still be there for some.

[orgASMic]

Kiwibrit, with all due respect, 'in the late 80s' is not 'at the moment'. Yes, the regulations allow for it, but it won't happen in the current climate.

[RODF3]

remembering the Flying Pay hit if you PVR - if that applies to you

If you are PAS then you don't get flying pay, therefore no reduction when you PVR.

[I'm Off!]

Thanks. That's why I wrote "if that applies to you".

[Deleted]

Following on the pensions thread JOIN THE ARMED FORCES PENSION SOCIETY NOW. Costs about £10 a year and they will do an independent assessment of your pension and give you some top tips. As an example, if you were on the AFPS 05 and left 1 day before your 55 point (Officers) you would be thousands of pounds better off over the life of your pension. Sadly, we have thinned our admin support down to the bare minimum and those at Glasgow do a one day course where there are decades of experience with the Pension Society. No, this is not a sponsored link, I like many are weighing up options. Please join now, if only for peace of mind that the system has got it right

[nav attacking]

Just had a brief at ISK re FPS. They now charge £30 per year but join online and you can get a £150 ABTA Travel agent cheque!!!

Best advice given was to leave in Apr not Mar as the pensions uplift is made on 31 Mar therefore pension is worth more! Not fully sure how but their help desk will explain (need to be a member of course). The big thing for everyone was the fact that they will assess your pension forecast for you as in most cases SVPA get the calculation wrong. Will almost certainly save you more than £30 per year. Some good benefits too.

[Fatjoff]

Terminal leave is 20 working days - used to be 28 days when they included weekends in the calculations. So grab back that week and a half I'm afraid.

I was always told GRT is yours to use as you please (except work) so you don't necessarily have to engage in approved activities. According to the JSP, it comes under the heading of Individual Resettlement Preparation (IRP), which "should be interpreted in the broadest sense for resettlement purposes and may include periods spent applying for jobs, attending interviews, employment and recruitment fairs and preparing CVs. IRP may also be used for activities related to house purchase and relocating children in schools."

And that's exactly how I will use mine when the time comes.

[JliderPilot]

Using the online pension calculator there is a difference between going on time or PVR, someone explained it to me as you get 95% of your pension if you leave under PVR terms. Not sure if that is correct.

[Biggus]

Ladies and gentlemen,

I offer you the following advice, take it or leave it. Get to know the details of your own pension scheme intimately! By all means take advice, but read the literature (all details are on the defence intranet), use things such as the pension calculator to confirm your findings etc. Take no one persons advice as gospel, but confirm it with your own understanding of your situation.

The two pension schemes really aren't that complicated, but AFPS05 seems to be misunderstood, or simple not understood, by many people. Everyone posting on here is smart enough to understand how their pension works, if you just take the time and effort to research it.

While not criticizing the two individuals involved, who I am sure are well meaning, lets look at the recent advice from Deleted and Nav Attacking:



Deleted He said "...if you were on the AFPS 05 and left 1 day before your 55 point (Officers) you would be thousands of pounds better off over the life of your pension..."

Is this correct, well, basically yes, but with some caveats. First of all, this applies to everyone on AFPS05, not just officers. Without going into the full details it all boils down to the fact that if you leave at 55 you get a single gratuity, there and then, if you leave before 55 you get one gratuity when you leave, and another at 65. Therefore there is the scope to make more money IN THE LONG TERM. This situation doesn't just apply if you leave 1 day before 55, but for 2 days before, 3 days before, etc, with a decreasing amount by which you are better off for each day early you leave. How far back does this work - well it depends on you personal salary and pension, but a rough estimate I worked out would be up to about 3 months before 55 - BUT DON'T TAKE MY WORD FOR IT - CHECK IT OUT YOURSELF!!!

So, why am I even bothering to comment on what Deleted said - well, there is a down side. Although if you leave JUST before 55 you will be better of by the time you are 65 and 1 day, between the ages of 55 and 65 you will recieve considerably less pension (only 75%) compared to leaving on normal retirement at 55. Thus, you gain in the long term, but loose in the short. This aspect was missing from Deleted's comment.

You have to decide such things as:

Will I live to reach 65 (family medical history) - although I think if you die before 65 your widow (if you have one) gets the second gratuity anyway, but I'm not sure!

Do I need as much money as possible when I retire at 55 or can I afford to wait till 65? (do you plan to work from 55 or retire immediately, etc).

While not wishing to criticize Deleted, I hope I have shown that his comment is more complicated than at first appears. Next.



Nav Attacking

He said "...Best advice given was to leave in Apr not Mar as the pensions uplift is made on 31 Mar therefore pension is worth more!..."

AFPS75 provides a basic set of tables for pension values I believe, of rank against years of service with an amount in the box, at least it did the last time I took an interest in it (I'm on AFPS05). Presumably a new table is produced every year, so by leaving just into Apr, as opposed to Mar, you benefit from using the new table with increased figures. Brilliant, so where is the issue? Well.....

On AFPS05 your pension is based on a % of the highest average salary you have earned over a 12 month period in the last 3 years. So, lets look at two examples, retiring at the end of Mar 2011 (case A) and the end of Apr 2011 (case B). In case A the pension will (if the person in question got a pay rise in Apr 2010) be a certain % of the salary for the period Apr 10-Mar 11. In case B the pension will be a certain % (an almost identical % to case A with only 1 month extra served) of the salary for May 10- Mar 11 and Apr 11. Therefore the person in case B will only benefit from 1/12th of any payrise by leaving at the end of Apr as compared to Mar - AND ALL PAY HAS BEEN FROZEN FOR THE NEXT TWO YEARS!!

Additionally, if you leave in March, case A, and start getting a pension, then it will recieve it's annual inflation update in April, even if the forces aren't getting a payrise. So it would appear that it is actually better on AFPS05 to leave just before April!

Therefore, while the advice given by Nav Attacking has relevence to those on AFPS75, it has little impact, and perhaps even be the exact opposite, for those on AFPS05.


By the way - GIVEN THAT PAY IS FROZEN FOR THE NEXT TWO YEARS, the tabular pension values used for AFPS75 are also unlikely to go up next April, so the advice given (to be fair - passed on) by Nav Attacking may not be relevant in these particular circumstances. In fact, with pay rises frozen it might also be the case on AFPS75 that it is better to leave in March and get your annual inflation rise in April!!

BOTTOM LINE - Take as much advice as you can, but get to understand your own pension scheme inside and out - it is in your own best interest!!

[Deleted]

Sorry if I caused any confusion, my aim was to highlight that pensions are complicated. Top work Biggus, totally agree get as much info as you can. After all you will, hopefully, draw your pension for more years than your salary!