Military Pensions (again)

[SteadyNote]

Extract from today's Sunday Times:

"Army and police face loss of early retirement rights
Robert Winnett and Jonathon Carr-Brown

THE Treasury has unveiled plans to strip members of the armed forces, police and fire brigades of their cherished early retirement rights, cutting millions of pounds from their pensions.
The plan is a key part of a proposed government-wide clampdown on generous pension schemes for public sector workers which could save the exchequer £4 billion a year.

People in high-risk physical occupations are at present allowed to retire earlier than normal, but Gordon Brown, the chancellor, is proposing the perk should end from 2005.

The plan would force soldiers and others to work for up to 15 years longer before receiving a pension — a move that could make it much more difficult for the Ministry of Defence to recruit new servicemen.

The proposal is causing uproar among soldiers, sailors, policemen and firemen who have picked up rumours of the cutbacks. It has also sparked renewed tensions between unions and government, echoing the recent French union protests over plans to cut back public sector pensions.

Bernard Jenkin, the shadow defence secretary, said: “The armed forces already feel taken for granted and this is a further insult coming within months of a major military victory.”

The proposed cutbacks are part of a wider programme of changes to public sector pensions contained in the fine print of legislation due to take effect over the next two years. John Prescott, the deputy prime minister, is drawing up plans to overhaul the scheme for local authority workers to tackle an estimated £15 billion shortfall in council pension plans.

The crackdown has been launched because the costs of paying pensions to public sector workers are soaring. Government commitments to pensions total more than £300 billion, the equivalent of £13,333 for every household in the country. This year several local authorities blamed rising staff pension costs for above-inflation increases in council tax bills.

“In future we want to see full retirement at 65 throughout the public sector, with early retirement possible only from 55,” said a Treasury spokesman.

The proposed changes would mean that members of the armed forces would no longer be able to retire at 40, after 18 years’ service, on a pension worth a quarter of their salary. They would have to wait until 55 to claim any pension and until 65 to pick up the full entitlement of two-thirds of their final salary.

The changes would cost an army major £12,276 a year during his forties and early fifties. A squaddie would lose at least £6,000 a year. But the Ministry of Defence stands to save about £300m annually. Policemen and firemen would have to work at least five more years to claim any pension and a decade longer for a full pension.

Glyn Williams, of the Unison union which has 1.27 members, said: “There is a strength of feeling building up about these proposals. If people are forced to pay in more or final salary schemes are scrapped, many would be prepared to consider industrial action.”

However, Prescott is expected to press ahead with plans forcing council workers to pay more into their pension schemes. He is also considering scrapping the final salary scheme and replacing it with a less generous pension based on average career earnings.

Teachers and nurses will also have to work up to five years longer and may have to pay higher contributions.

Maurice Fitzpatrick, an accountant at Numerica, the business services group, calculates that the government saving will be about £4 billion a year, the equivalent of more than 1p on the basic rate of income tax.

The Ministry of Defence is understood to be trying to negotiate a compromise solution with the Treasury whereby soldiers retiring early may receive a “bonus payment” to help to compensate for the delay of pension rights. "

[whowhenwhy]

There is a distinct sound of glugging, I'm beginning to feel a little damp and I do believe I just saw some rats scurrying down the road.

I believe this may be my stop driver!

Out of interest, would this be a bad time to suggest that President Blair and his cronies try to save some money by plugging the huge holes in their asylum and social security policies, rather than punishing those of us who actually work for a living?? Just a thought! :mad: :mad: :mad: :mad:

[FFP]

So are they looking to start all this IN 2005 or will people who leave FROM 2005 be hit (if it happens) ?

[Follow Me Through]

Actual link is:
http://www.timesonline.co.uk/newspaper/0,,176-721816,00.html

The worrying thing for those serving and expecting to get a pension as part of their current Terms and Conditions is that for the Govt plans to work they want to say anyone retiring after 2005 will not get an immediate pension. The bow wave of pensions/demographics will not wait for 16 or 22 years from 2005 to take effect.

This is rich from the MPs that awarded themselves a record breaking pension rise in the last 18 months or so.

Standby for a max exodus from those who will not stand for it.

The Ministry of Defence is understood to be trying to negotiate a compromise solution with the Treasury whereby soldiers retiring early may receive a “bonus payment” to help to compensate for the delay of pension rights.


That was the footnote about MoD. The fictitious major they mentioned with a pension of 12,276 would currently earn 184, 140 in pension over 15 years from age 40 to 55. Will be interesting to see what the 'toothless wonders' negotiate with the Treasury mandarins to compensate for that.

Another interesting thing about MPs pensions is just how quickly they can aqquire rights. None of this 16/22 years service to the Crown that others need to do!

[stillin1]

Being naive I can't believe that the powers that be can really be planning to rip up the deal we all signed up to.
AL1. Oh yes I can.
I'll be doing the sums on Monday & suspect that they will = PVR. What a stunning way to get shafted after 30 yrs service.

[Fire 'n' Forget]

If that's the case then surely you would be allowed to serve until retirement age then ? :hmm: I would love to see everyone staying in until 65. Imagine :rolleyes: no promotion, a bigger pension until the bloke ahead of you reaches 65 and retires !!. MT fleet consisting of 3 wheeled electric buggies, Senile dementia setting in (already exists with some I know), Med and Dental centres overflowing with geriatrics instead of young skivers!! And worst of all the "When I was younger the airforce........." stories. Please Please No :uhoh:

[FFP]

So I can stay in and get nothing at 38 or leave at 32 with an ATPL up my sleeve and go to the airlines ?

Will take about 5 secs to think that one through . . . .

I joined under the (naive) impression that I could leave at 38 with a pension and move abroad. And now all that might/will change ?

Nothing like a morale boost after a war . . . . .

[SinkingMallard]

Having read the article, it look as though those of us who signed up to FRI 1 have been stitched up. Take a bonus of up to 17K to stay in to 38 and then receive your early retirement pension if you still want to leave :D. But wait - before you leave, we'll change the rules so you can't have the pension for a further 17 Years.:mad:

Does anyone else read it like this?

[donald stott]

Have spoken to a number of friends/colleagues and very few of them are aware of this. Suggest all readers promulgate this to the widest audience.

[jerryatric]

I also read the offending article in the Sunday Times yesterday and was left feeling very disillusioned. I have just over 5 years to my 38/16 point and have a CPL/IR. The only thing keeping me in the service at the moment is my pension. If I'm no longer going to be eligible then I may aswell leave tomorrow and seek employment with the airlines. My question is: If the powers that be scrap the pension as we know it, how will I stand if I were to get a job and only give the MOD a month's notice to leave? I'm sure this question has been asked before but I'd be grateful for any feedback on the legal standing of the MOD keeping you for a year/18 months as it currently is for PVR !:sad:

[left one o clock]

Naively, I joined the RAF aged 16 1/2, so now, 20 years later, I still have 3 years to do to qualify for a pension aged 40 and after 22 years reckonable service.
I have just received my aircrew financial retention incentive in return for agreeing not to leave in the next 3 years. Poorly targetted cash in my opinion as I was staying in for the pension. Now it seems, the £8000 I got may be all I get. If that's the case, I fully intend to return it and jump ship, even though, bizzarely, I'll be obliged to pay it back gross although I received it net!
I, like many other people I suspect, have made significant plans based on the provision of a partial pension at fourty. I've had a long and mostly happy time in the RAF, but towards the end of my career this leaves a relly bitter taste. If this happens, it will be a genuine injustice.

[Fox-1]

When the French get a little miffed they have a general strike and bring the country to its knees. When the firefighters want a pay rise they go on strike and partake in a long and protracted industrial dispute. When the military gets shafted it has a good think about things and says it's not fair. It is obvious that the only way the military is going to get a fair deal is to be prepared to stand up for itself. PLAN A.......

1) CAS says he'll resign if we don't get the pension we were promised. If he has to resign, each successive CAS does the same and goes to the press to publicise it.

2) 'Worried' aircrew refuse to fly because they feel distracted in the cockpit. (some of the saved money could go towards pensions........).

3) Everybody writes to their MP and makes it known they strongly disapprove of the change in their contract (we do have a contract actually, see what they say if you try to leave) and they will vote against any party that brings it in.

If these c:mad: s think they're going to cheat me out of £150k (estimate) they've got another thing coming. It's bad enough I have to pay tax on a non-pensionable incentive (which chinless wonder agreed to that??), let alone have my financial future destroyed by some chimp. I accepted the pension in the same way I accepted the long hours, risk of death, flying around in museum pieces, weekend working and general crap to make a living. I didn't see anybody from the Treasury in the cockpit with me over Iraq.

THE AIR FORCE BOARD LYING TEAM (AFBLT) ARE COMING TO LEUCHARS THIS WEEK. I'LL GET THE OFFICIAL LInE AND POST IT HERE.

[tradewind]

left one o clock

'Now it seems, the £8000 I got may be all I get. If that's the case, I fully intend to return it and jump ship, even though, bizzarely, I'll be obliged to pay it back gross although I received it net!'

Not quite true - even if they claim the money back gross (which they can't), you can claim the tax (they didn't pay you) back off the taxman.

A small victory in a large war that I suspect will have lots of casulties.

[mutleyfour]

Hmm not sure.....

I was info'd a while ago that the new ruling which take place in 2005 will only affect new contracts and persons enlisting from that date.

Those that are already serving will remain as normal until at least 2010 thereafter a solution will be sought..ie a taxed lump sum payment.

[brit bus driver]

This has to be possibly the most worrying thread I have had the misfortune of reading here on PPRuNe. I mentioned this to my wife last night and she, like me, is totally incredulous.

Question: aircrew (and I have to use this example, as it's within my scope of understanding) are not automatically entitled to assimilation (sp?) to Spec Aircrew (or whatever it's called these days). So, as a gash shag Flt Lt you come to your 38/16 point, and - hypothetically - aren't offered Spec Aircrew; what now? They won't keep you employed to a pensionable age, but neither will they pay you to leave! Or will the gratuity be unaffected?

And what of the demographics.....where does it all end!

[man in the loop]

Start digging the escape tunnels, I reckon.

The pension is one of the main reasons for staying in. We all know that it is good, just as we know that spending lots of time away from home in sh1tty parts of the world is not good. However, we put up with the stick because we know that there are some nice carrots to be had. Take away all the carrots, and suddenly the job is not sufficiently attractive to make you want to stay in.

As far as the AFB LT goes, I would not be surprised if the line peddled is along the lines of "it's speculation and we don't comment on speculation / it is only a press article / lots of things get considered and don't get adopted / we haven't been briefed on this." However, they will need to do something, as the cost to individuals will be enormous, and therefore a mass exodus to beat any deadline is a dead cert.

Some of the questions that need asking are:

What compensation (if any) could we look forward to, given that we could be losing a lot of £££ over the coming years before we retire?

Given that we seem to get shafted by not having a formalised written contract, when can we look forward to seeing our current terms of service put into print so we can legally challenge such proposed changes as the removal of our pension?

Will the abatement of the annual pay increase now cease given that the net value of the pension will decrease? Similarly, will we be reimbursed given that the previous abating of pay was based upon the current pension scheme?

If these proposed changes are adopted, will our senior officers speak out or resign over the issue, or will they just roll over and do nothing?

Answers on a postcard.

Anyone want to join an escape committee?

[tracasseries]

Can anyone knocking about in Town provide a GPS position for the Treasury? I think there may be a DMPI missing from the target list!:E

[Hydraulic Palm Tree]

Everybody has Terms of Sevice which are laid down in some AP or other, and those already in will have reserved rights, however, the sneaky sods will make you sign new ToS to take promotion or Professional Aircew etc and this is when they will get you.

HPT

:mad:

[maniac55]

Having been through 'Hobson's Choice' when they shafted the Airmen Aircrew terms of service, that's exactly what the will do if this new pension scheme does come into effect.

"To accept promotion/re-engagment please sign here for the new terms as well"

Not this time, I'll be out of here, and I suspect a great many others will do the same.

We're already short of bodies as it is, and the negative impact that this will have on Retention and Recruitment will be enormous.

Our lords and masters have no choice they have to fight this and a 'bung' instead of a pension will not suffice :suspect:

Would the last one out please turn off the lights:(

[SALAD DODGER]

I have a lot of respect for many of our Millitary Top-Brass, but I seriously doubt that any would resign in protest at this. They have to also secure the financial future for their families and themselves and I really cant see them doing anything to put this at risk. The stealthy way that this is going through makes me think that the politicians are calling the shots with little consultation to the Armed forces.

The lack of public information on this subject is worrying, and makes me think that we really are about to be screwed by the government, and it will be as bad as we fear.

I dont think any of the political parties are going to offer us top cover on this, as they dont really care and they expect that we will take the hit on the chin as we have with every other cut to our Services.

[Yellow Sun]

Fox-1 Wrote

3) Everybody writes to their MP and makes it known they strongly disapprove of the change in their contract (we do have a contract actually, see what they say if you try to leave) and they will vote against any party that brings it in.


Don't just write, go to their constituency surgeries and see your MPs. This is the only way you will have any impact. A queue of servicemen outside their door will have a much greater effect than any number of letters. Don't just send a representative, all of you of all ranks and trades must go and express their deep disquiet.

I left a long time ago, but I'll be going because once again I can see the services getting s**fted.

Good Luck

YS

[SinkingMallard]

Does anyone have any links to information relating to these possible changes?

I can find the Green Paper on Pensions from Dec 02, but nothing more recent - except of course the Sunday Times Article

Ta

[The Gorilla]

Hydraulic Palm Tree

----------------------------------------------------------------------------------------------------------------
Everybody has Terms of Service which are laid down in some AP or other, and those already in will have reserved rights..
----------------------------------------------------------------------------------------------------------------

Unfortunately this is not absolutely correct and is not recommended as a comfort blanket. AIUI, HMG is considering bringing in BLANKET legislation that will affect the entire populous and not just the Services.

In that event your terms of service will NOT protect you against changes in Pension law or any tax changes associated with it.

My betting is the following will happen:

1.) As a result of the proposed MOD pension changes, no one will get a pension until retirement age of 55. This will only affect those who join after 1 Apr 2005 (or later if they keep dragging their feet) All those in Service before that date will stay on reserved rights to our present scheme.

:D

2.) As a result of the Governments recent green paper, when it finally becomes law in about 2006/2008 I think the Tax free portion of your gratuity will cease. I also strongly suspect that commutation will end in toto. At the very least commutation will be taxable.

:{

My thoughts only and as such not worth banana's I know. But a lot of things can happen under 2 above before it becomes law, so don't get too worked up just yet.

Not going to affect moi though!!
:ok:

[snafu]

This is a 'bright idea' from the Treasury to save the suggested £4bn from some faceless, clueless beancounter who's never spent more than one night away from Mummy and is just taking the forces for granted.....again.

Well, I can safely say that they'll save more than £4bn off the budget if this comes in, because they won't have to pay me my salary once I PVR! The whole point of staying at least until IPP is the ressurance that if I decide to go afterwards, I'll have an immediate pension and gratuity to ease me into life after the forces. Take that away, and I'm going to have to decide if it's better to stay until I lose the plot (arguably already!!;)) or go now and try to develop some seniority and pension from another career.

This is a very short sighted suggestion from an organisation looking for the immediate results and not the implications. IMHO there will be an avalanche of PVRs from all three services and in all branches if this is brought in. Hopefully someone up in town will realise quite how dangerous this could be before it's imposed on us and is able to stop it, rather than waiting for the PVRs to arrive.

[Albert on Tour]

This is all still speculation but I reckon The Gorilla has hit the nail squarely on the thumb. To summarise, for simple folk:-

1. Our present pension is pretty safe, I can't see how they could get away with changing it.

but....

a) Gordon Brown can change the tax laws on a whim and affect our gratuity.

b) If you have to re-engage for any reason, you could get shafted.


I reckon we'll get at least a years notice on any tax change.

[BEagle]

Which is the primary reason I pulled the black-and-yellow earlier this year. Even El Gordo couldn't change pension legislation inside 6 months.....but beyond that, who knows. I simply wasn't prepared take the risk. For despite the best efforts of our top brass (whom I'm sure will do the best they can to secure our best interests), at the end of the day Tony's cronies hold the purse strings....

[Yeller_Gait]

I can see things getting interesting a year or two down the line when the government decide to change pension laws giving everyone 12 months notice. The 18 month PVR rule may face a challenge or two by those wishing to leave to take their pension and or tax free gratuity while they still can.

My IPP cannot come quickly enough.

[unowho]

Just another nail in the coffin. Who is going to do President Blair's dirty work in the future???????????????????

[left one o clock]

My hope is that the Labour party will not risk a policy as controversial (and potentially vote losing) as this before the next election, and that nothing will happen before 2007 when I time expire, but I wouldn't bet on it, and I feel for those with longer to do. Particularly those who are re-engaging or due to re-engage soon.

[Megaton]

We've just had an e-mail from OC A reminding us that the story resurfaced due to questions posed by the newspaper to the Treasury and refers to a Government Green Paper released last year. Internal comms brief blah blah blah. No decision blah blah blah. Full details announced end of Jul blah blah blah.