New Pension Scheme
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Anyone know where I can find details of the Medical Discharge payments on AFPS05. I will almost certainly be better off transferring but need to know MD details. My thoughts are ;
MD at age 49 on level 3-pension enhanced by 1/2 remaining service, an extra 3 years. Pension payed on exit in this case as if you left at age 52-is pension same as you would get at 65 and what about tax free payments?? Just one on discharge??
Thanks!
MD at age 49 on level 3-pension enhanced by 1/2 remaining service, an extra 3 years. Pension payed on exit in this case as if you left at age 52-is pension same as you would get at 65 and what about tax free payments?? Just one on discharge??
Thanks!
Blame My Parrot
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ToC,
There is a summary in mmp/124 "Your Pension Scheme Explained" which formws part of the OTT pack. This also refers the reader to MMP/125 -" Armed Forces Compensation Scheme" and MMP/115 - "Invaliding". The latter two are accessible off the MOD Intranet.
VG
There is a summary in mmp/124 "Your Pension Scheme Explained" which formws part of the OTT pack. This also refers the reader to MMP/125 -" Armed Forces Compensation Scheme" and MMP/115 - "Invaliding". The latter two are accessible off the MOD Intranet.
VG
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Just got my OTT paperwork thru and it confirms that unless you are a committed lifer, you'll be better off staying on AFPS(75), especially if you commute the maximum available.
One of our best friends is a pensions expert and she confirms that fact too. Her advice is that unless you're a lifer, you would be crazy to leave the old scheme.
Remember, they wouldn't have changed to the new scheme if it was more expensive...
One of our best friends is a pensions expert and she confirms that fact too. Her advice is that unless you're a lifer, you would be crazy to leave the old scheme.
Remember, they wouldn't have changed to the new scheme if it was more expensive...
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Redundancy Payments
Has anyone digested changes to redundancy payments under the new scheme, ignoring the rights to cross back to 75 under the present 3 rounds. I had a quick glance at DIN 2005DIN02-093 and it seems that should you be made redundant in the future, the future is certainly not orange.
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Just copied this quote from Talk Split on the other thread:
Ginseng - Any thoughts on this statement - I myself have not got my OTT pack yet and also have not seen this anywhere therefore cannot comment but am interested if it is true - certainly for those people not on PA spine now that subsequently transfer to PA spine this opportunity would be great.
Oggin
edit to say in all the briefing material I have seen it has stated that this is a one time only chance to swop schemes. If this is true I personally think it is slightly unfair as people's circumstances change all the time so through no fault of the individual they may decide to go with one scheme only to disadvantage themselves due to circumstances that change later on down the line.
Read the small print very carefully. Page 7 of the AFPS05 (orange) booklet talks about opting out of the scheme.
The last paragraph states that if you opt out (or fail to join it) then you have ONE chance to join later as long as you are still serving and medically fit. I read that to mean that I don't have to decide in the next three months. So I could stay on AFPS75, which is beneficial up to 16/38, but if I then continue beyond that point, I should be able to transfer to AFPS05 at a later date, when it becomes financially viable further down the line.
Have I read this right
The last paragraph states that if you opt out (or fail to join it) then you have ONE chance to join later as long as you are still serving and medically fit. I read that to mean that I don't have to decide in the next three months. So I could stay on AFPS75, which is beneficial up to 16/38, but if I then continue beyond that point, I should be able to transfer to AFPS05 at a later date, when it becomes financially viable further down the line.
Have I read this right
Oggin
edit to say in all the briefing material I have seen it has stated that this is a one time only chance to swop schemes. If this is true I personally think it is slightly unfair as people's circumstances change all the time so through no fault of the individual they may decide to go with one scheme only to disadvantage themselves due to circumstances that change later on down the line.
Last edited by Oggin Aviator; 27th Jul 2005 at 17:53.
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Oggin Aviator/Talk Split
Oggin and TS,
My interpretation of that paragraph on page 7 of the orange book is that you have one option to join and one further option to re-join if you temporarily opt out and join a private scheme.
Your one option to join is now.
But thats only my opinion, although I'm quite sure that the OTT would have made it quite clear that you can defer your decision to any future time while you remain in the Services. I believe it doesn't offer deferrment (I haven't received mine yet, so standing on thinnish ice), but Ginseng will probably know more about this.
PS. I Just found the answer half way down the left hand column on Page 1 of the OTT Booklet, available at the MOD pensions website, here
It is quite clear that you have only one opportunity to join the new scheme. The orange book paragrah can be misinterpreted
My interpretation of that paragraph on page 7 of the orange book is that you have one option to join and one further option to re-join if you temporarily opt out and join a private scheme.
Your one option to join is now.
But thats only my opinion, although I'm quite sure that the OTT would have made it quite clear that you can defer your decision to any future time while you remain in the Services. I believe it doesn't offer deferrment (I haven't received mine yet, so standing on thinnish ice), but Ginseng will probably know more about this.
PS. I Just found the answer half way down the left hand column on Page 1 of the OTT Booklet, available at the MOD pensions website, here
It is quite clear that you have only one opportunity to join the new scheme. The orange book paragrah can be misinterpreted
Last edited by DP Harvey; 27th Jul 2005 at 18:22.
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I admit that all is not good. The OTT info is not the full picture, the online calculator is slightly inaccurate and the admin staff have little knowledge beyond the pamphlets but at least there is a choice.
The new pension system will come into force. All new personnel will be on it. Those of us who joined under a different scheme have a choice to change or not.
I understand that personal circumstances can change but there seems to be too much speculation by individuals about accepting 75 or 05 then deciding to leave early. No system will ever be produced that will enhance remuneration to those who do not fulfil their contracts.
The new pension system will come into force. All new personnel will be on it. Those of us who joined under a different scheme have a choice to change or not.
I understand that personal circumstances can change but there seems to be too much speculation by individuals about accepting 75 or 05 then deciding to leave early. No system will ever be produced that will enhance remuneration to those who do not fulfil their contracts.
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Not sure that if you're a lifer and opting is a good bet either.
Received my pack yesterday and despite the calculator showing that if I stayed till 55 I would be better off on 05 (2K on the pension and 8k on the grant) my PBS, however, showed that I would be worse off on 05 by 1k/6k. And with 75 I have the chance for commutation and am not tied in to minimal funds if I pull the yellow and black.
As an aside, I have asked for guidance from PMA as I have been paying AVCs to up my In Service Death Benefit for donkey's years. With the transitional arrangements taking effect from 1 Apr 05, everybody automatically has 4 times the rate. I am still paying for an enhancement that is now everybodies by right, at least until a decision is made for 1 Apr 06. This anomaly had apparently missed the pay people and I am told they are trying to see how they can give me my money back.
Is anybody else out there paying for AVCs and not getting much joy ?
A still undecided 4f
Received my pack yesterday and despite the calculator showing that if I stayed till 55 I would be better off on 05 (2K on the pension and 8k on the grant) my PBS, however, showed that I would be worse off on 05 by 1k/6k. And with 75 I have the chance for commutation and am not tied in to minimal funds if I pull the yellow and black.
As an aside, I have asked for guidance from PMA as I have been paying AVCs to up my In Service Death Benefit for donkey's years. With the transitional arrangements taking effect from 1 Apr 05, everybody automatically has 4 times the rate. I am still paying for an enhancement that is now everybodies by right, at least until a decision is made for 1 Apr 06. This anomaly had apparently missed the pay people and I am told they are trying to see how they can give me my money back.
Is anybody else out there paying for AVCs and not getting much joy ?
A still undecided 4f
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Does anyone know how to buy extra years?
If you're on PAS but joined after age 20 you can't get the max possible AFP05 pension on retirement at 55, because you'd have less than 35 years service.
I have seen somewhere that it is possible to 'buy' extra years to make it up to the full 35.
Can anyone point me in the right direction for more definitive info on the when, where, how, whom...of going about this?
TOG
If you're on PAS but joined after age 20 you can't get the max possible AFP05 pension on retirement at 55, because you'd have less than 35 years service.
I have seen somewhere that it is possible to 'buy' extra years to make it up to the full 35.
Can anyone point me in the right direction for more definitive info on the when, where, how, whom...of going about this?
TOG
2 interesting things to come out of the briefing that we had, which was attended by a civil service lady who had been heavily involved in the drawing up off the scheme:
1. Look at the figures if you are PAS and transfer to 05 then PVR a short time before the 55 point. Whilst the EDPs will be less than your pension until 65, the second lump sum more than makes up for this if you can stand the decreased EDP until then. On one typical scenario it led to an overall benefit of £60k. This was pointed out by the civil servaant and we were assured that the question had already been asked at higher levels and whilst it may appear to be a 'loophole' it is entirely legit and the administrators of the scheme are not trying to close it.
2. With regard to timings and how long you will have to make your mind up, it is unlikely that anyone will be chased before the end of the year. Apparently there is a significant cock up relating to the OTTs for the Army and they will not have to make a decision until later this year or early this year. Also remember that they cannot force you to make a choice and if you do not then you will just stay on the current scheme. This will be confirmed in writing in Feb/Mar next year so arguably if you haven't submitted a return you could argue the toss then...
1. Look at the figures if you are PAS and transfer to 05 then PVR a short time before the 55 point. Whilst the EDPs will be less than your pension until 65, the second lump sum more than makes up for this if you can stand the decreased EDP until then. On one typical scenario it led to an overall benefit of £60k. This was pointed out by the civil servaant and we were assured that the question had already been asked at higher levels and whilst it may appear to be a 'loophole' it is entirely legit and the administrators of the scheme are not trying to close it.
2. With regard to timings and how long you will have to make your mind up, it is unlikely that anyone will be chased before the end of the year. Apparently there is a significant cock up relating to the OTTs for the Army and they will not have to make a decision until later this year or early this year. Also remember that they cannot force you to make a choice and if you do not then you will just stay on the current scheme. This will be confirmed in writing in Feb/Mar next year so arguably if you haven't submitted a return you could argue the toss then...
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detgnome
Thanks for that. I'm PAS and had spotted your first point - must admit that I'd found it hard to believe, so your post is quite reassuring.
Interestingly, if I PVR at age 54, my EDP a year later will be about the same as my pension would have been under AFPS75. So with a second lump sum and a much bigger pension at age 65, the decision to move to AFPS05 is a complete "no-brainer"!
Thanks for that. I'm PAS and had spotted your first point - must admit that I'd found it hard to believe, so your post is quite reassuring.
Interestingly, if I PVR at age 54, my EDP a year later will be about the same as my pension would have been under AFPS75. So with a second lump sum and a much bigger pension at age 65, the decision to move to AFPS05 is a complete "no-brainer"!
Lockstock,
Is the clock ticking? I am sure I read somewhere in the last day or two (maybe on an mod pensions website) that because of a delay (i.e cockup!) with the Army issueing their AFPS05 paperwork (it is triservice after all) all this talk of having to get your reply in within the next 3 months had gone out the window!
Can anyone confirm or deny this?
Is the clock ticking? I am sure I read somewhere in the last day or two (maybe on an mod pensions website) that because of a delay (i.e cockup!) with the Army issueing their AFPS05 paperwork (it is triservice after all) all this talk of having to get your reply in within the next 3 months had gone out the window!
Can anyone confirm or deny this?
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There are `bugs` in the written OTT projections that affect a fair number of people, including PA Spine Flt Lts, giving an incorrect (underestimate) assessment of the AFPS 75 benefits. The affected people will be issued with fresh, corrected OTTs. Clearly this will delay the decision making process. I have seen one e-mail suggesting that the 3 month `clock` will now not begin until 1 Sep 05 at the earliest. I didn`t find the OTT projection particularly useful because it uses `current` pay rates and doesn`t attempt to project forward to age 55?
The MOD `on-line pension calculator` is basically pretty accurate give or take £100 per year.
For what it`s worth, here are some comparisons for the benefits paid at 55 for a theoretical Flt Lt PA Spine pilot retiring at 55 with 34 years reckonable service, and with the maximum of 17 years on the PA Spine. I have used the 2005 pension and pay rates to do the following MANUAL calculations.
AFPS 75:
Flt Lt Spec Aircrew rate is £23982 with 34 yrs reckonable service.
PA `enhancement` of 17yrs x 365days x £0.707/day of PA service
is £4387
Total Pension equals £28369
AFPS 05:
Flt Lt PA Spine level 35 salary is £67175 (current ceiling for pilots)
Reckonable pensionable service is 34 years, so retirement pension is 34/70 x 67175
Total Pension equals £32628
So AFPS 05 `wins` by £4259 but of course there are other considerations too!!!
The MOD `on-line pension calculator` is basically pretty accurate give or take £100 per year.
For what it`s worth, here are some comparisons for the benefits paid at 55 for a theoretical Flt Lt PA Spine pilot retiring at 55 with 34 years reckonable service, and with the maximum of 17 years on the PA Spine. I have used the 2005 pension and pay rates to do the following MANUAL calculations.
AFPS 75:
Flt Lt Spec Aircrew rate is £23982 with 34 yrs reckonable service.
PA `enhancement` of 17yrs x 365days x £0.707/day of PA service
is £4387
Total Pension equals £28369
AFPS 05:
Flt Lt PA Spine level 35 salary is £67175 (current ceiling for pilots)
Reckonable pensionable service is 34 years, so retirement pension is 34/70 x 67175
Total Pension equals £32628
So AFPS 05 `wins` by £4259 but of course there are other considerations too!!!
Last edited by Stanley Eevil; 2nd Aug 2005 at 15:57.
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detgnome, LFFC et al,
Regarding PVR just before age 55 to ensure that you get the two lump sums under AFPS 05, a few calculations below show that the benefits are not as great as you might think.
These calculations are irrespective of rank, PAS or not ...
Pension at 55/65 = X
Retire at 55
Pension = X
Gratuity = 3X
Over 10 years to age 65 total benefits = 13X
Retire at 54
Pension = 75% of 0.97X (approximately) for 10 years
And 1 year at 50%
Gratuity @54 = 2.91X
Gratuity @65 = 2.91X
Total received over 11 years = 13.6X
On these figures I would suggest staying to 55 is probably the better option, certainly in the short term.
Y_G
Regarding PVR just before age 55 to ensure that you get the two lump sums under AFPS 05, a few calculations below show that the benefits are not as great as you might think.
These calculations are irrespective of rank, PAS or not ...
Pension at 55/65 = X
Retire at 55
Pension = X
Gratuity = 3X
Over 10 years to age 65 total benefits = 13X
Retire at 54
Pension = 75% of 0.97X (approximately) for 10 years
And 1 year at 50%
Gratuity @54 = 2.91X
Gratuity @65 = 2.91X
Total received over 11 years = 13.6X
On these figures I would suggest staying to 55 is probably the better option, certainly in the short term.
Y_G
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However in the retire at 55 case, wouldn't you have to pay income tax on X for 10 years, so net value would be 10X - 20% = 2X, so net value is 8X. Therefore total value is 11X.
In the 54 case the 2.91X at 65 is tax free, and your tax liability for 10 years would be 7.25X - 20% = 1.45X, so net value is 5.8X. Therefore total value is 12.12X.
Hopefully I've got me sums right, but a Sqn Ldr PAS in the latter case would be > £30k net better off over the ten years to 65.
TOG
In the 54 case the 2.91X at 65 is tax free, and your tax liability for 10 years would be 7.25X - 20% = 1.45X, so net value is 5.8X. Therefore total value is 12.12X.
Hopefully I've got me sums right, but a Sqn Ldr PAS in the latter case would be > £30k net better off over the ten years to 65.
TOG