Pension Change

[LFFC]

Public sector to lose 'final salary' pensions (http://www.telegraph.co.uk/finance/personalfinance/pensions/8363526/Public-sector-to-lose-final-salary-pensions.html)

Public-sector workers are set to lose their “gold-plated” final salary pension schemes with the publication of a landmark report. The report is expected instead to propose that they receive a portion of their average salary over their entire career in a move aimed at bringing in major savings in future decades.

:eek:

[VinRouge]

Well, as a career Flt Lt, salary averaging is going to work in my favour...


I take relief from this though:


Lord Hutton, the former Labour work and pensions secretary, is also set to recommend that public-sector staff contribute around three per cent more annually to their pensions schemes in a separate move that will raise £1.8billion a year by 2015-16.


3% I can cope with.

Then this:

Changing the rules for new contributors to go into “career average” schemes would result in significant savings - but these would not be achieved for years down the line.
Current employees would still be able to benefit from more generous final-salary schemes.
Lord Hutton is thought to have ducked away from a more hardline approach because of “political realities,” according to Whitehall sources.


Looks as if they get the message - f*ck with our pensions, and there is going to be hell to pay. didnt the original hutton prelim reccommend no changes to AF pensions anyhow?

[Diablo Rouge]

Current employees would still be able to benefit from more generous final-salary schemes.


One could argue that this is all that matters. When you have worked a lifetime and gone the extra mile on occasion focused on the long term reward, it is important that retirement expectation is not pulled in the final hours.

The work force of tomorrow; and indeed FNGs today, live in a world reaping the wrath of previous mis-management. There is an inevitable overswing and the long term security for new guys now is significantly less in fiscal terms. It may be adjusted to something more palatable in years to come, especially if demand does not match supply. A point for debate would be who is to blame? Is the present final salary pension scheme really untenable if not influenced by external demands on Govt by the financial sector. .....or an insistance by Govt to dance on the world stage as if the Empire remained.

Wind the clock back and we could have retained an appropriate military force, highly motivated and trained, that was armed with the technology required to protect the home nation, and meet our morale comittments to former colony countries. (Independence +50 years). But Govt instead chose us to be an american aircraft carrier permanently anchored off the european mainland.

[Al R]

It did; Hutton previously stated that SP should not start to pay personal contributions from salary – whether George Osborne accepts that is another issue - we'll have to wait until the budget to find out. Hutton knows that SP have their salary abated (gross) already to take account of the fact that they do not pay an active contribution.

So, if a personal contribution IS to be made, there would have to be a salary increase to compensate for it, and George Osborne has decreed that no public sector is to receive a salary increase for the next two years. It would present a devisive scenario, especially at a time when Plod is being asked to take a pay cut.

If everyone has to move across to the new (career averaging) scheme at outset, then Vin Rouge will be quids in (relatively speaking), compared to someone who is promotion flatlining for a long period and who then gets picked up at the tail end of a career.

The people who could get hurt in the near future are those who might get rolled up into the new National Employment Savings Trust after a full mil career. If you are in that, in your 50s, then somewhere in the region of 2% of your fund will go towards repaying the State start up costs. That investment shortfall mauling is NOT going to be recoverable in a 10 year window.

[Just This Once...]

Now if 'career average' included all my flying pay...

[FFP]

Here's my question,

How much can the Govt change pensions ? Where does "Grandfather Rights" come into effect ? Is it anything that isn't being paid yet that can be changed ?

[Diablo Rouge]

I cannot reply to the Grandfather Rights question with anything beyond logic. But it is so logical that I am confident of being correct.

In my own case, I have contributed to my pension over three decades with a 'hidden' payment from my monthly salary. This hidden payment is also potentially subject to rumour rather then documented fact. However, if true, then I have 'earned my pension', and it cannot be touched.

Based upon previous contentious changes to Terms of Service that I have witnessed over the years, the military will force your hand when accepting any of the following:

1) Promotion.
2) Extension of Service.
3) Structeral Change. Such as trade group amalgamation.
4) Commisioned Service if non-comissioned at present.

A condition of accepting the 'carrot' will be for you to subscribe to the 'stick'. You may turn down promotion/comission but an extension of service offer may eventually force you into a corner. The principle example I can recall concerns the removal of time promotion against reserve rights of pay. It took about 10 years to get as many on board as the system was ever going to achieve, and I dare say a few stragglers remain who have; over the years, rejected offers of promotion.

For the system to mandate a total change of pension policy would be to open the main gate and allow a tsunami of experienced operators to leave. It would be management suicide. Whilst we live in uncertain times; I would like to think that Manning have a grasp on the negative consequences of such action. In fairness, and especially pertinent to redundancy tranche three, Manning do appear to be conducting the slaughter with an element of gentlemanly behavour. ..though 170 baby pilots probably disagree with that.

[Climebear]

Now if 'career average' included all my flying pay...

... you would have received less flying pay as it would have been subject to the same % reduction as your basic salary.

[BEagle]

But would have enhanced your pension.....:hmm:

When rumours of nuLabor proposals to fiddle with long-standing pension systems started, the pins on my black and yellow came out. When rumours became fact, that, coupled with the whole RAF starting to go incipient, caused me to pull the handle 2 years early - damn glad I did!

[The Old Fat One]

DR

Very good post and pretty much what I observed over a full career as well.

Beags

Agree and did the same myself (except I would delete "nulabour" and insert "all lying b****d politicians of any political persuasion")

[GrahamO]

except I would delete "nulabour" and insert "all lying b****d politicians of any political persuasion"

Of course, who else is ever likely to propose any kind of change ? The lollipop lady ?

Such a situation will sadly unfold regardless of the party in power , as Public Sector pensions have always been a gigantic Ponzi scheme where the payees of the past are funded by the payees of today and simple demographics determines that such schemes are not going to last, so its not really the politicians to blame. We are all living too long and not enough are in work to pay for those alive and in retirement.

The deck of cards is crumbling and its not the fault of the current politicians of whatever persuasion. Its pure demographics.

That said, I would fully support only one part of government keeping final salary pensions and thats the Armed Forces, and not the wider 'non-combatant' MoD or civil service.

[LFFC]

Here's another report; this time from the FT:

Hutton seeks end of state final-pay pensions (http://www.ft.com/cms/s/0/2c85c2c6-4813-11e0-b323-00144feab49a.html#axzz1FwdZMX9K)
By Nicholas Timmins, Public Policy Editor
Published: March 6 2011 22:47


In an effort to keep the change as simple as possible, Lord Hutton has come down against a cap on the amount of pension higher earners can receive, or switching them into a form of money purchase pension. He will argue that the change to career average for future pension earnings will deal with “fundamentally unfair” pensions at the top, where final pay for the highest fliers determines their pensions. In addition, excluding higher earners would remove their contributions, making the taxpayer funding of pay-as-you-go pensions more difficult, not easier.



Under the package, staff would keep the final salary pensions they have earned to date. However, all staff, not just new entrants, would be switched to career average pensions for their future service. There may also be controversy over the index Lord Hutton recommends for increasing the value of the pension earned each year.

[VinRouge]

http://www.pprune.org/terms-endearment/444744-virgin-atlantic-744-roster-fo.html

http://www.pprune.org/terms-endearment/442652-466-000-pilots-required-3.html#post6287560

Oh dear. Looks as if it is all about to get a bit interesting.

[Just This Once...]

Did I not read it right when Hutton suggested leaving the armed forces out of these changes?

[Al R]

Yes, he did say that. But Hutton doesn't make the rules, he was taken onboard to offers Osborne advice and bought him breathing time and space, and act as an excuse Patsy. Transiting across to AFPS 13 (or whatever) might not be obligatory, but may well be should you wish to sign on or get promoted. Previously earned rights could well be preserved, so its not so much a loaded gun at your head; more, loaded kid gloves rubbing greedily together as you mull the alternatives.

This may or may not provide (cold comfort) and I hate to be a potential harbinger of doom, but The Armed Forces (Pensions and Compensation) Act was amended to read..


(1) The power of the Secretary of State to modify an armed forces pension scheme may not on any occasion be exercised in any manner which would or might adversely affect any entitlement, accrued rights or pension credit rights of any member of the scheme acquired before the power is exercised unless—

(a) the consent requirements are satisfied in respect of the exercise of the power on that occasion in that manner, or

(b) the scheme is modified in the prescribed manner.

(2) The consent requirements are those prescribed for the purpose of obtaining the consent of members of the scheme to its modification.

Retirement options are getting wider by the month. As the picture is dumbed down across the board, private company schemes will also come under increasing pressure. I have absolutely no doubt that in 'x' year/years, we will see some budget carriers signing up to NEST in order to mitigate an expensive and long term company commitment. The attitude will be '.. if you don't like it, fine.. then leave.'. There will always be some hungry mouth waiting to take your seat. In all honesrty, I would not be surprised if, in the wake of a massive overhaul, something similar was offered to new recruits. After all, if you are going to make changes, get the bad news out of the way now, rather than drip feed it over the coming years and endure death by a thousand cuts.

The concern within HM Forces is (as far as I can see) that there is going to be a multitude of individuals on differing contracts. Contracts such as PAX for instance, is that it probably is far from being the best product for most people.. but everyone is in it together and so, the blunty or Rock sitting at KAF is paying the same as the EOD operator out on the ground. In contrast, these widely differing levels of beneficial and opaque retirement benefits can only further undermine and dilute military ethos.. or perhaps people just won't care by then - who knows?

Reliance on the company or the MoD is getting a less and less likely option as the months/years go by, especially as the Basic State Pension is also going to overhauled and simplified to 'compensate'. £140 a week, anyone?!

[LFFC]

Warning of public sector 'exodus’ over pensions (http://www.telegraph.co.uk/finance/personalfinance/pensions/8372288/Warning-of-public-sector-exodus-over-pensions.html)

From 2015, most of the six million state employees will be expected to retire at the state pension age, which is due to rise to 66 by 2020, under recommendations from Lord Hutton of Furness. Armed Forces personnel, firemen and police officers, who can currently retire in their fifties or even younger, will be denied a pension until they reach 60, he will say.

Armed Forces face shock in public pension reforms (http://www.thetimes.co.uk/tto/news/)

The Armed Forces, the police and firefighters will have to work until they are 60 and will lose their “gold-plated” final-salary pensions under reforms to public sector retirement benefits to be announced today. Lord Hutton of Furness’ long-awaited report on pension reforms for six million workers includes more than 30 recommendations to overhaul the £30 billion annual public sector pension bill. The key proposal, which will enrage trade unions, is to scrap the generous final-salary scheme for all public sector workers by the end of this Parliament, The Times has learnt. The highest-paid, including doctors, generals, head teachers and top civil servants, could lose tens of thousands of pounds a year from their annual pension in a switch to a less generous scheme linked to the average wage earned during a career.

[VinRouge]

Have to see if this affects gratuity and the ability to max commutate. If it does, o think a lot are going to walk... Not least the seniors of wg cdr-star rank who now sound as if they have the option of leaving now or working to much later. Quite frankly, it sucks, but the butchers bill from the last government needs to be paid.

[22/7 Master]

"Have to see if this affects gratuity and the ability to max commutate. If it does, o think a lot are going to walk... Not least the seniors of wg cdr-star rank who now sound as if they have the option of leaving now or working to much later. Quite frankly, it sucks, but the butchers bill from the last government needs to be paid."

That's OK then. As long as it in the name of government profligacy then we should pay. What a load of hoop.

Absolute Betty Swallox. Pay is already reduced. Allowances are reduced and we know there are further MAJOR reductions coming (no entitlement to SFA or SLA post part 2 training - how do you like them apples? massive reduction in BSA). Now our pensions which don't forget we contribute to via a reduction in take home pay.

So if our pensions are now going to reduce massively (average earnings AND RPI to CPI) are we going to see a large increase in our pay packet to allow us to purchase additional pension provision? Not likely.

At the end of the day this is about reducing the cost of the public sector in the long term in order to recude the tax the super rich have to pay. It is a long term goal conveneintly hidden by the financial ineptitude of Blair, Broon and his cohorts.

In my opinion any remaining doubts that the armed forces covenant no longer exists has disappeared. It is time for us to have formal and robust representation in the form of an Armed Forces Federation akin to the police, and modern terms of service offering overtime, fixed hours etc.

This may seem backwards leaning, but the government and the taxpayer must realise you only get what you pay for and the reliance on the goodwill and 'can-do, will-do' attitude of service personnel is over.

'Tommy this and tommy that' indeed.

[whowhenwhy]

I hope to christ, allah, buddah and anyone else that'll listen that 2015 is the earliest that this will come in!:sad:

[Bert Angel]

It does raise an 'interesting' situation - if you need to serve to age 60 to get your pension then how does that fit with having 'lean, deployable forces'? With fewer places in the services can we really have them taken up by old people pushing 60? So the idea of serving until pension will become a thing of the past except for very few, probably very senior officers. Everyone else gets pushed out early with no pension to compensate for the reduced income of having to start a new career at a late age.

So where's the incentive to stay in past about 35? Go early while you can still secure a good second career. If you do stay in the hope of achieving a high rank but don't make it you get forced out in middle age without a financial safety net.

[Really annoyed]

60???????????????? What level do you think a 59 yr old will have to reach in the MSFT? It will probably still be higher than an 18 yr old girl!!!! They wont have to do sit ups as it will be a struggle for them to even sit down! As for press ups, not a hope in hell.

More important than that there is no mention of the MP's gold plated pensions in all of this. Then again why am I surprised.

[harrier123]

I am scheduled to leave in 6 years having completed my 16 years. Do you think that I will still get a pension from when I leave. If this is not the case I can see a lot of people leaving.

[Al R]

Graham,

The same logic might be applied to the Basic State Pension. The problem is, we have fewer and fewer young workers making headway in the jobs market. By comparison, our potential problem is nothing copmpared to some other's; for instance, Italy.

22/7 Master,

In the first instance, yes, it might be a help. But, if the public perception of the military is changed in order to allign us with police and teachers etc, the long term picture would be eroded. We might get some campaigning top cover generating some good column inches, but then what? What good has that done for the police this week? We have organisations such as the RBL, FPS etc. We need credible organsiations fighting for us; not so much us fighting for 'us' (I accept I am now retired, but old habits die hard..)

Its going to be a very lean 4 or 5 years. I only hope that this is going to be similar to the period at the end of the 70s, which preceded a bouyant turnaround in fortunes a few years later. The difference this time, is that people are now far more cynical and far more inclined to look after #1. This provides some objective assesment of the background to AFPS reform.

http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/SNBT-05891.pdf

From this morning;

But in a bid to reassure public servants close to retirement about the value of their schemes, he told BBC TV on Thursday morning that it would be “quite wrong and legally unacceptable” to remove benefits so far promised. “Everything you’ve currently got, you keep,” he said. “But going forward, I think we’ve all got to share in the cost of rising longevity.”


FT.com / UK / Politics & policy - Hutton urges average salary pensions link (http://www.ft.com/cms/s/0/4b466cae-4a7c-11e0-82ab-00144feab49a.html#ixzz1GCDOCL5S)

[Brian 48nav]

I am no expert, far from it, but I thought that for the last 25 years or so that SPs (like other pensions) were portable.

I can certainly remember exRAF guys coming into air traffic with CAA/NATS and moving their service accrued pension in to our scheme.I wish I had been able to do it when I left the RAF in 73. As it is I have nothing to show for my first 10 years of work (apart from a small gratuity)-c'est la vie, the 33yrs I got with NATS still equals a Grp Capt's pension.

So this could be the answer for those who wish to or have to leave in their 30s etc. For pilots joining say BA you may not get year for year, but on retirement from an airline as a captain that pension will easily beat a service pension, apart perhaps AVM and above.

As for the police, well the country can no longer afford folk taking their full 2/3rds pension at age 48 etc.It is well past time that they were brought into line with everyone else.

Standing by for fireworks!

[Really annoyed]

But in a bid to reassure public servants close to retirement about the value of their schemes, he told BBC TV on Thursday morning that it would be “quite wrong and legally unacceptable” to remove benefits so far promised. “Everything you’ve currently got, you keep,” he said. “But going forward, I think we’ve all got to share in the cost of rising longevity.”

Does that mean those close to retirement can still go at 55? What do they class as close to retirement? 3 Years? 5 years? When they say we've all got to share in the cost of rising longevity does that mean the MP's as well?

I can't see many front line soldiers wanting to fight at the tender age of 58 or 59. Could imagine it? It would be like a scene from Dads Army. Maybe we should stop giving away 10 Billion pounds a year in overseas aid. How about we look after ourselves for once.

[Al R]

Brian,

You can transfer out of AFPS, but as a core strategy, what has been accrued to date is a guarantee of income.. so you'd probably be bonkers to do so. What might be added are other measures, such as a personal pension (don't forget the other half), other investment approaches (Investment ISAs/VCTs etc). They diversify your approach to retirement, give you flexibility and more options, and have the potential to offer greater performance and income.

Are these measures needed, however bitter to swallow? The Treasury’s own forecasts show that the public sector shortfall, on the £32 billions paid out this year will rise from £4 billion to £10.3 billions by 2015-16 if there are no changes. By contrast, in 2004-05 the shortfall was only £1.25 billions. That figure of £32 billions is now two-thirds of the total amount paid out through the basic state pension which covers all pensioners – not just the one in five who work in the public sector.

[RandomBlah]

So if your IPP is after 2015, would you start to receive a pension from your 18/22 or 16/38 point, or would you have to wait until age 65 or possibly later?

[Al R]

Does that mean those close to retirement can still go at 55? What do they class as close to retirement? 3 Years? 5 years? When they say we've all got to share in the cost of rising longevity does that mean the MP's as well?

I can't see many front line soldiers wanting to fight at the tender age of 58 or 59. Could imagine it? It would be like a scene from Dads Army. Maybe we should stop giving away 10 Billion pounds a year in overseas aid. How about we look after ourselves for once.

Hutton suggested linking public sector normal retirement age to the state pension age, currently 65 (but due to increase to 66 for both men and women by 2020). Some (including 'us') can currently retire earlier, and Hutton suggests a normal pension age of 60. TBC though.

Hutton suggests leaving a number of other similarly important decisions to g'ment (specific accrual rates for benefits, contribution rates and indexation etc). In particular, Osborne also has to decide whether the accrual rate for who leave a public sector pension scheme before retirement should be linked to prices or earnings (there is a recommendation that benefits being accrued should be uprated in line with average earnings for those who remain contributing members of the schemes).

Whowhenwhy and Random,

Hutton suggests it should be possible to introduce these new schemes before the end of this Parliament, in 2015, while allowing a longer transition, where needed, for groups 'such as the armed forces and police'.

[downsizer]

Work in the RAF till 60, or can't draw your pension till 60? Big difference.

[Al R]

It would strongly suggest that (full?) benefits might not be drawn until 60.

[Biggus]

People, it's no good asking questions like, "...how does this effect me? I'm leaving in 20XY on AFPS0X having severed for XY years, X of which in my current rank....", etc, etc...

Hutton has set out broad principles, not fine detail, which the government doesn't even have to follow.

At the end of the day all you have at the moment is enough information to worry you, not any detailed information you can use for planning.

Time will lead to more detailed information, no doubt in the classic MOD way of "roadshows", DINs, glossy "Q&A" brochures, rumours on unofficial websites, etc....


It will also no doubt take months to work out the fine details, so be patient people....

[Al R]

Biggus,

Correct - Hutton was tasked with slashing the bill. It seems he has done that. Given the zeal which Osborne has gone about his task in other areas of cost cutting, it seems likely he'll offer a few titbits back, but the general thrust of what Hutton suggests is going to be enshrined I would imagine.

Overall, things could be worse. Hutton has not recommended a cap on the amount of pension higher earners can receive, or proposed switching employees into the cheaper ‘money purchase’ defined contribution schemes which are now the norm in the private sector, or even worse, heading towards NEST.

It gives an ample lead in time for people to realise though, that the times, whether they like it or not.. are a changin'. Its going to be a nasty shock for everyone involved with a public sector pension (me included) but in some ways, its a good thing we now know where the land lies.

[mlc]

As for the police, well the country can no longer afford folk taking their full 2/3rds pension at age 48 etc.It is well past time that they were brought into line with everyone else.

Brought into line with everyone else? I think the Police would be happy to be brought into line with the Armed Forces. Can we afford a non-contributory pension for the armed Forces. Perhaps the RAF, Navy and Army should now pay 14% of their gross pay into their pension scheme.

Cameron has nailed his colours to the mast. He's not interested in dealing with the benefit thieves or the business who avoid tax and vat. That's too hard. It's the PAYE earners he's after. And the first ones to suffer are those that can't take industrial action.

[draken55]

Graham O

"Public Sector pensions have always been a gigantic Ponzi scheme where the payees of the past are funded by the payees of today and simple demographics determines that such schemes are not going to last"

No such thing as simple demographics and not all Public Sector Schemes are alike. For example, the Local Government Scheme is Funded. To class the AFPS, NHS, Police, Fire and Teachers Schemes akin to a Ponzi is somewhat simplistic. There is nothing unsound about using current income in the form of contributions to a scheme to pay benefits rather than need to "secure them" by having to pay much more in cash to an annuity provider.

In the past the larger funded Private Schemes paid benefits out of cash flow too. The problem facing the Private Sector stemmed from the Lawson tax raid on Schemes in the 1980's when they were prevented from running at too high a surplus (based on Government assumptions) and then had to either spend the surplus or pay tax on it. Having spent their surplus to improve benefits, fund redundancy's etc in the late 1980's and 1990's, they were then hit by changes in pensions law, actuarial assumptions and Browns Tax raid in 1997. They have never recovered. After closing their schemes to new members they then faced increased costs combined with the impact of changing accountancy standards that led to growing deficits being stated in their Annual Shareholder Reports/Accounts.

Another little gem from Nigel Lawson in 1987 led to the cap on the pensionable salary that could be used in any tax exempt pension scheme. That led to a plethora of unfunded schemes and a boom in Boardroom pay as total compensation packages were created to reward Company Directors in lieu of pension schemes.

If the unfunded AFPS was a Ponzi what about the NHS? NI Contributions do not pay for it. At least the Government is now honest enough to call Road Fund Tax for what it always was i.e. a tax for having a car!

If demographics are really the issue this affects the UK as a whole and not just Public Sector Schemes. The cost impact on the future payment of State benefits will dwarf that on unfunded pension schemes. What is the Government planning? To "increase" the Basic State Pension to £140 per week and reduce the qualifying payments needed to obtain this:suspect:

[GrahamO]

Ponzi schemes they are in the true definition - the payments for the pensioners today come from the payments made by the workers of today. Every day the difference gets bigger and as soon as the payments of today stop, the pensioners of tomorrow should be concerned.

If demographics are really the issue this affects the UK as a whole and not just Public Sector Schemes.Kind of yes - but as the Private Sector pensions are driven in large, by what their input is into the savings, then it matters not. Nobody is affected other than the contributor themself. The problem is that with Final Salary Schemes funded by the taxpayer, is that if more money is needed, then the only person unaffected is the pensioner i.e. a complete reverse.

Gordon Browns raid on the private pensions schemes was for one purpose - to give money to the public sector he wanted to bloat.

Us private pension holders have our own little individual funds and what happens to it does not materially affect the pension payments of others. If my pension does not perform well, the taxpayers does not have to give me more to top up.

With Publicly funded pensions, the taxpayers continues to pay, no matter how much is drawn out. Thats the difficult bit for many to accept. Why should someone working in the HMRC doing a back office job be protected against inflation and market pressures more than a painter or decorator when they are on the same salary and the HMRC person takes nil risk in their job?

Do I expect military staff to be on the front line or flying at 60 ? Absolutely not, but there are plenty of worthwhile jobs needed in the MOD between the date individuals are considered not suitable for active duty, and the date they retire. Those days should be used to top up pensions without having to fight. Should MOD staff get better pensions than the police, fire, hospital staff, HMRC - darn right they should but retiring at 50 when they have a good second career earning potential ahead of them seems somewhat unfair.

I support the active military having good pensions for the commitment they put into this country. But at the moment its a little too skewed I feel.

And the state pension to £140 pays for itself. Gordon Brown in his maniacal obsession with screwing anyone who has worked hard for a living and succeeded, obsessed about paying someone who was already on a good pension, with a state pension, so he introduced Means Testing. The cost of that testing is so huge (mainly because of the large number of unemployables-elsewhere that are needed to run it) that stopping testing, saving that money and putting it into their Pension would give every pensioner £140.

[Ken Scott]

Can we afford a non-contributory pension for the armed Forces. Perhaps the RAF, Navy and Army should now pay 14% of their gross pay into their pension scheme.

Armed forces pension is contributory, pay is abated by approximately 6% to reflect the deduction for pension. Pension is then based on net pay rather than gross. If you opt out of the AFPS you don't get your pay restored to gross.

A larger abatement would be a pay cut, not a popular move especially with troops in Afghanistan etc. Perhaps we could all have a pay rise, with a larger abatement, net increase zero?

[Brian 48nav]

I'm getting in deeper here than I wanted to, but are you saying the police contribute 14% of their salary toward their pension?

I always assumed that like the Civil Service that it was non-contrib', in fact before I joined the RAF I was a cadet with Surrey Police (non-pensionable) and IIRC the real coppers had a non-contrib' scheme. Mind you that was 1963-5.

As to the services, I read somewhere years ago ( brain cells can't recall where!) that military salaries were abated by 9%, or was it 11%,anyway 1 different from 10%, to reflect their so-called 'free' pensions.

I'm not knocking the police but I guess their T&Cs were agreed many years ago when the average PC had been a serviceman first, joined perhaps at 23, served 30 years then had a life expectancy of 10-15yrs on retirement. Now those who join at 18 and serve 30yrs must have a life expectancy of 25 yrs plus I guess.

Al R

I think those exRAF guys who joined CAA around 1990 got a very good deal if they transferred their accrued service pension. I'm told our pension scheme was,maybe is, regarded by IFAs as one of the best.

[GrahamO]

Civil service pensions were non-contributory a long time ago but as the money coming out of the scheme to pay for the pensioners who worked in the past, was becoming such a huge sum that the country could not afford, they had to start paying.

I am not 100% sure but I recall it was the equivalent of 7% on Income tax rates to get the civil service pensions scheme back in the black and that was years ago. And since then its got worse.

I am sure someone knowledgeable can identify how but the civil service pensions deficit is today and how much our taxation revenue is. And that gap is narrowing and if left unchecked, will result in all taxation collected (Income tax, VAT, VED, etc etc) basically just paying civil service pensioners.

[The Old Fat One]

I did a presentation on Mr Madoff shortly after he was busted - focusing on two areas: the failure of the regulators and, of more interest here, the philosophy separating his scheme from similar looking "legal" entities, specifcally state funded pensions.

When you get down to it, the philosophy is not so different...they are all ponzi schemes of one sort or another (as was the sub prime industry and Enron). In functionality however they are a world apart, because the government controls taxation, the money supply and dozens of other instruments which allows it to plan the financial future of the economy (note that is not the same as saying that governments are any good at planning the economy!!).

On an individual note, my philosophy throughout my service career was that my pension was sacrosanct. What that meant to me was that...


I educated myself completely on my rights and entitlements.
I made career decisions based on I what I would get on exit.
I kept abreast of developments.
I trusted no one where my pension was concerned.
And if anybody ****ed with my pension, all bets were off and I would take whatever action I needed to look after me and my family.I commend this approach to all serving. By the way, it is completely compatible with loyal and professional service - as my military record proves.

[Really annoyed]

Graham why are you going on about civil service pensions? Nobody here gives a stuff about the civil service. This is a Military forum not a civil service forum. What is your military service history?

[Blighter Pilot]

If you read the whole document there are several references to the Military in terms of younger retirement ages due to the 'unique nature of the Armed Forces'

However, if the plan is to move to CARE pensions and link payment to equivalent retirement ages we will still have to leave at 55 and not actually get a pension until 60/65/67/68!:mad:

[mlc]

Many Police Officers are still ex-Forces (including me).

When I took off my dark blue uniform (gratuity not a pension), I had to decide what I wanted to do next. I was getting on a bit, so what choices does an ex-two ringer make. I could have gone for a high wage and less secure retirement, but chose a significant pay cut and the promise of a decent pension.

That pension has cost me a direct 11% deduction of my gross wage. And I can tell you that is a significant amount out of your wage packet each month. It's about to go up to 14%, for less at the end.

The Police pay more into their pension than any other Public Sector worker. When the review started, even the bloody Home Secretary didn't know how much we paid in. (Should we be surprised they are so ignorant!)

There has been encouragement to view us as 'Public Sector parasites'. Going after the benefit cheats and tax evaders is too difficult. We're easy targets.

[GrahamO]

Graham why are you going on about civil service pensions? Nobody here gives a stuff about the civil service.

You are in a branch of government and therefor part of the overall Civil Service.

Your pension is not paid by private industry, but out of the taxpayers contributions. In my eyes, that makes you part of the overall civil service.

[draken55]

"Ponzi schemes they are in the true definition - the payments for the pensioners today come from the payments made by the workers of today. Every day the difference gets bigger and as soon as the payments of today stop, the pensioners of tomorrow should be concerned"

Don't want to go off track but it's largely as a consequence of Government actions that Private Sector Schemes are stuffed and more workers will now end up relying on State Benefits. The State Pension is not funded though Government seeks to persuade us otherwise by the levy of a different form of Income Tax in the form of National Insurance.

Hutton is saying nothing about stopping payments. It is the level of current expenditure that is being questioned on the basis of changing demographics. This is contentious and you may have seen other threads on this forum that seek to use demographics to prove other theories like, say, the UK having a Muslim majority in 50 years.

Pay As You Go has long been one approach to pension scheme funding. It was the basis on which occupational pensions started in this country back in the 18th Century. Civil Servants who retired were compensated by the person who took their job. The State formalised such relationships and gave greater security by underpinning this promise for its employees by establishing Scheme. Unfunded Public Sector Schemes like AFPS are tested regularly by the Government Actuaries Department. Evidence that the population of Schemes is changing by living longer would be expected to conclude that Scheme Costs needed to rise. However, that is not a reason to throw the baby out with the bath water! Considered action is required, not shock horror story's about gold plated pensions, designed to stir up a reaction from workers in the Private Sector and perhaps oil change of a more political nature.

States can and do run up deficits by making political promises to gain favour (tax cuts versus say improved schools) or as a consequence of war. After World War 2 the UK did not try to re-balance the books in one Parliamentary term. It went for austerity but at the same time set up the NHS and developed Nuclear weapons. That was the choice our leaders took at that time.

Reducing the deficit by 2015 is as much a political choice. As is, say, a new Rail line from London to the North (£15 Billion plus) Trident(£20 Billion plus) both of which would clearly be out of the question for a bankrupt Nation.

If Hutton has carried out a genuine review and the Government moves towards legislation, seek evidence that is specific to AFPS as to why it must change rather than take a view driven by your wider political opinion.:ok:

[Dave Angel]

You are in a branch of government and therefor part of the overall Civil Service.

Your pension is not paid by private industry, but out of the taxpayers contributions. In my eyes, that makes you part of the overall civil service.

Guys don't feed the Troll :ugh:

[The Old Fat One]

You are in a branch of government and therefor part of the overall Civil Service.

Your pension is not paid by private industry, but out of the taxpayers contributions. In my eyes, that makes you part of the overall civil service.


Your eyes are just plain wrong then. The Civil Service and the Armed Forces are both segments of the UK Public Sector, along with the NHS, State Education, the Police, the Fire Service, Government (at all levels) and (still) heaps of Quangos.

And it's not just semantics; to refer to the Armed Forces as part of the Civil Service is ignorant on more than one level.

[GrahamO]

Who pays your wages - the public though the Exchequer ?

Who pays your pension - the public through the Exchequer ?

To suggest that this is not a good definition of a public servant is inaccurate, IMO.

[Homelover]

TOFO

Listen to Dave Angel- you just fed the troll!

:ugh:

[Grabbers]

Graham,

Are you Trim Stab in (thin) disguise?

[The Old Fat One]

Indeed...sorry

I will now force myself to finish the whole bottle of 16 year Lagavulin as recompense.

[Really annoyed]

Graham I take it you are a civil servant then. Why would you compare yourself to someone in the Armed Forces?:=

[Fox3WheresMyBanana]

To get back on topic-I have a preserved AFPS pension I hope to start collecting in 2022. The stated principle (Recommendation 4 if you read the Hutton report) is that whatever is already accrued is still yours. Only service beyond the change (2015) will have different conditions.
I'm well aware that much can be lost 'twixt cup and lip', so I emailed my MP. I pointed out that I couldn't exactly jump back into my cockpit to do some more 'time', having left. I also pointed out that those made (or about to be made) compulsorily redundant didn't have options to serve longer either.
Got a reply in 11 minutes (:ok:), with a promise of a letter to the Minister and notification of his reply. I'll believe it when I see it, but it's a start.
May I suggest emails to MPs from all ppruners.

p.s.
for comparison with AFPS, I believe the Teachers' Pension Scheme is self-financing (I've got a preserved one of those too).

[general all rounder]

Frankly we're stuffed. Interestingly though, Hutton did nail the lie that the Public Sector is better paid than the Private Sector. This has been the mantra of the right wing press, esp Daily Telegraph, for some years but it completely ignores that the Public Sector has privatised all its menial labour. Consequently all low skilled labour lies in Private Sector stats not the Public Sector. In like for like terms the Public Sector is significantly under paid. Hutton's example is PUS of the Home Office who has a £ 10 bn budget to manage: he gets £ 200K per annum. The median salary for Private Sector Chief Executives with budgets of £ 10 bn is £ 2.5M per annum - so on that measure the Public Sector is paid less than a tenth of the Private Sector. Whilst one example isn't exactly a stat - I was going to go anyway but the pension change means that I would be better off by about 50% in the Private Sector - decision confirmed.

[Brian 48nav]

Sorry pal, I should have followed the old rule 'don't assume, check!'

[Rector16]

I'm just a simple bloke - how are the changes supposed to save money? We're trying to 'slim down' the RAF to 33.500; retaining a bunch of old gits from 55-60 means that we pay them 100% of their wage for 5 years instead of 50% for that period. At the same time, we're occupying spaces that some young thrusters could be in (cheaper, fitter, more deployable). Seems to me that HM pays for me to stay at 100% or go at 50%.

Did I mention the Military Covenant? No, neither did the Govt - probably cost a few quid, so they binned it.......:(