New Pension Scheme
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2010 Pension Rules
Think I understand what's behind this one now. It is true that HMG intends to change general pensions legislation so that from 2010, it will not generally be possible to draw benefits from a pension scheme before the age of 55. However, there will be certain exceptions for professions where it is recognised that fitness requirements make such a late compulsory minimum pension date impractical. I believe these exemptions will cover the Armed Forces, Police and other emergency services, as well as at least some categories of sportsmen/women. That would seem to provide the answer to the question.
It is nevertheless true, though, that the rules of the AFPS can, in principle, be altered at any time by appropriate legislation.
Regards
Ginseng
It is nevertheless true, though, that the rules of the AFPS can, in principle, be altered at any time by appropriate legislation.
Regards
Ginseng
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Ginseng,
Whilst that's true, the clip from the web that I quoted above seems to be quite clear.
Given that the wheels have been very cautious to ensure that anything they say will not make them liable if you make the wrong pension decision (hence all the stuff about seeking independent advice), it seems quite significant that they have stated that these changes to the tax law will not affect people who choose to remain in AFPS75. They must be pretty sure of their facts.
On the other hand, if that advice proves to be wrong at some time in the future, they may well be held liable for issuing misleading advice.
Regards
It is nevertheless true, though, that the rules of the AFPS can, in principle, be altered at any time by appropriate legislation.
Given that the wheels have been very cautious to ensure that anything they say will not make them liable if you make the wrong pension decision (hence all the stuff about seeking independent advice), it seems quite significant that they have stated that these changes to the tax law will not affect people who choose to remain in AFPS75. They must be pretty sure of their facts.
On the other hand, if that advice proves to be wrong at some time in the future, they may well be held liable for issuing misleading advice.
Regards
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LFFC
All I was really meaning to point out is that the quote you posted can be interpreted in a number of different ways. I am not accusing the MoD of deliberately pulling the wool over anyone's eyes. Nevertheless, the quote says that those who choose to remain on AFPS75 will not be affected by "these changes". Do those words refer to the "Changes in UK Tax Law", or to "the introduction of the Early Departure Payment Scheme". None of us can be quite sure which of these two meanings, or another, the writer intended to convey. And, in the end, the MoD cannot, and will not, give a cast-iron guarantee that tax law will not change in the future in a way that it cannot foresee now. Be very careful, therefore, not to assume that the words are a legally watertight way of saying what you would prefer them to mean.
Regards
Ginseng
Regards
Ginseng
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Short Service to Permanent Commission
Perhaps someone can help shed some light on this one - I'm 10 years into my 12 year Short Service Commission and they have just offered me a PC. The initial paperwork gives an 18/40 point, which infers that rather than giving me the option of transfering to AFPS 2005, I will be transferred anyway.
Clearly I would like to stay on existing AFPS 75, and sign on 'til 16/38. Is this Innsworth pulling a fast one? If so can I wave a "preserved pension rights" card?
There will be an obvious disparity between 2 people who joined at the same time, one who can retire on a full pension at 38, and one who has another 2 years left to run!
Any help appreciated!
Clearly I would like to stay on existing AFPS 75, and sign on 'til 16/38. Is this Innsworth pulling a fast one? If so can I wave a "preserved pension rights" card?
There will be an obvious disparity between 2 people who joined at the same time, one who can retire on a full pension at 38, and one who has another 2 years left to run!
Any help appreciated!
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MOD Briefing Session
There was an RAF briefing session on the Pension in MOD last Thursday and another is planned for Monday. It was extremely good and I highly recommend that any who have not been, and are concerned about their pension, should attend. The roadshow will tour all Stations I believe.
The standard disclaimer is of course that all circumstances are particular to any individual but in essence those who serve the full stretch seem to be more likely to benefit under AFPS05. Those who leave earlier seem more likely to see some advantage in sticking with AFPS75.
The calculator will help and one individual who said he was intending to stick went through his sums in public session and was surprised when the new scheme worked out better! The factors you have to weigh are when will you retire from the RAF? What rank will you be and how how long have you been in that rank? Do you intend to work full time? If so have you time to earn another pension before 65? How long do you intend to work after leaving? The list goes on.
On IFA the advice was that for the princely sum of £20 an organisation called the Armed Forces Pension Association (a charity staffed by ex-Forces and Financial Advisors) will do an individual assessment for you and give you advice.
All in all then, people should not be too glum about this. For some there will be real benefits in the new scheme and for others there will be no compulsion to join something which disadvantages them.
I strongly advise all to go and listen to the presentations.
The standard disclaimer is of course that all circumstances are particular to any individual but in essence those who serve the full stretch seem to be more likely to benefit under AFPS05. Those who leave earlier seem more likely to see some advantage in sticking with AFPS75.
The calculator will help and one individual who said he was intending to stick went through his sums in public session and was surprised when the new scheme worked out better! The factors you have to weigh are when will you retire from the RAF? What rank will you be and how how long have you been in that rank? Do you intend to work full time? If so have you time to earn another pension before 65? How long do you intend to work after leaving? The list goes on.
On IFA the advice was that for the princely sum of £20 an organisation called the Armed Forces Pension Association (a charity staffed by ex-Forces and Financial Advisors) will do an individual assessment for you and give you advice.
All in all then, people should not be too glum about this. For some there will be real benefits in the new scheme and for others there will be no compulsion to join something which disadvantages them.
I strongly advise all to go and listen to the presentations.
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Moggi,
I think what lies behind this is that the RAF at least is intending to offer an extension of service to the 18/40 point, to all those who are currently on 16/38 terms, so that they may have the opportunity, if they wish, to transfer to AFPS05 and serve to at least the initial EDP point. It sounds as though they are pre-empting your decision on whether to take the PC. Whether they will give you the leeway you are looking for is doubtful, since your 16/38 point, if you were to transfer now, would fall after the AFPS05 transfer date. Talk to your OCPSF and have him/her ask the question pronto!
Impiger,
You are generally right, but it depends on other circumstances. If like me, you were a late joiner, and have no pre-21 service to gain in AFPS05, and are not PAS, you may still find (as I have), that AFPS75 is the slightly "better" option, even at the 55 year point (and much better for earlier retirement!).
Regards
Ginseng
I think what lies behind this is that the RAF at least is intending to offer an extension of service to the 18/40 point, to all those who are currently on 16/38 terms, so that they may have the opportunity, if they wish, to transfer to AFPS05 and serve to at least the initial EDP point. It sounds as though they are pre-empting your decision on whether to take the PC. Whether they will give you the leeway you are looking for is doubtful, since your 16/38 point, if you were to transfer now, would fall after the AFPS05 transfer date. Talk to your OCPSF and have him/her ask the question pronto!
Impiger,
You are generally right, but it depends on other circumstances. If like me, you were a late joiner, and have no pre-21 service to gain in AFPS05, and are not PAS, you may still find (as I have), that AFPS75 is the slightly "better" option, even at the 55 year point (and much better for earlier retirement!).
Regards
Ginseng
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Ginseng
I agree I should have said that total length of Service is actually more important than age on exit. Its just that most join from school/higher education and thus age on exit tends to equate to length of Service.
I was pleased to hear that University Cadet Service counts (from age 18) mainly it would seem because we were paying National Insurance contributions! Now about that missing 6 months of contributions before I hit 18 do you think I can get them back
I agree I should have said that total length of Service is actually more important than age on exit. Its just that most join from school/higher education and thus age on exit tends to equate to length of Service.
I was pleased to hear that University Cadet Service counts (from age 18) mainly it would seem because we were paying National Insurance contributions! Now about that missing 6 months of contributions before I hit 18 do you think I can get them back
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Impiger
Probably not. Just console yourself with the thought that they may count towards your state retirement pension, if there were enough of them within a single tax year to make it a qualifying year!
Regards
Ginseng
Regards
Ginseng
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Impiger mentioned a MOD briefing.
OTT comes out in July, MOD briefings well nto July - not too much use and already eating into time to decide.
Is there to be a roadshow, and what timescale?
OTT comes out in July, MOD briefings well nto July - not too much use and already eating into time to decide.
Is there to be a roadshow, and what timescale?
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Given the dispersement of Service personnel in the MOD, a roadshow plan would be open to all kinds of problems. Some folk will not get a roadshow due to their location, etc, and if in the fullness of time they realise that they made mistake in their choice they could argue that they were unfairly informed, because other people got a roadshow and they didn't.
This is down to individuals looking after their own interests. There is a lot of clearly written info, about both schemes available. Flt Cdrs with junior ranks could convene meetings in their workplaces, with admin staff present to broadcast and explain some of the terminology involved, and generally make themselves and the admin staff available to clarify any confusion.
The current redundancy scheme is muddying the water somewhat, but it too comes with pension info and an option for the individuals involved to revert to AFPS75 if required.
This is down to individuals looking after their own interests. There is a lot of clearly written info, about both schemes available. Flt Cdrs with junior ranks could convene meetings in their workplaces, with admin staff present to broadcast and explain some of the terminology involved, and generally make themselves and the admin staff available to clarify any confusion.
The current redundancy scheme is muddying the water somewhat, but it too comes with pension info and an option for the individuals involved to revert to AFPS75 if required.
After asking if the Adminers at Cranwell will give individual advice I was categorically told "ABSOLUTELY NOT-IT MAY GIVE YOU RE-COURSE LATER IF THE ADVICE PROVES WRONG".
I've spent the £20 and joined.
I've spent the £20 and joined.
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How will "A-Day" April 2006 affect both the 75 & 05 AFPS?
I believe that there will be a lifetime cap on what your pension is worth - starting from 20 times your annual pension.
Not likely to be an issue for AFPS 75 I admit - but what about those of us on the PAS and signed to age 55?
Anyone have any ideas or heard any rumours about how the new pension laws from "A-Day" will affect AFPS 05?
Regards
I believe that there will be a lifetime cap on what your pension is worth - starting from 20 times your annual pension.
Not likely to be an issue for AFPS 75 I admit - but what about those of us on the PAS and signed to age 55?
Anyone have any ideas or heard any rumours about how the new pension laws from "A-Day" will affect AFPS 05?
Regards
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DPH,
I agree that the idea of a roadshow, though to be welcomed, is problematic unless it can be uniformly delivered to everyone, which I doubt. Whilst I would thank Impiger for his post, it seems a little unfair if those who happen to be working in MoD at the critical time have the benefit of a roadshow, and a demonstration of the calculator, which is not afforded to everyone else.
OKOC,
I have to sympathise with the position taken on advice. The administrators can tell you how the system works, but they are not qualified to give you personal financial advice.
Covec,
The lifetime pension limit to be produced within the "A-Day" rules is, I believe, about £1.5M. This refers to the size of the investment fund which provides your personal pension. The AFPS, just like the National Insurance "Fund", is not a fund at all. There is no pot of money. Your income stream is paid from current Treasury spending via the MoD pay and pensions bill. I don't think you have anything to fear. Enjoy your huge new PAS pension (but spare a thought for the rest of us!)
Regards
Ginseng
I agree that the idea of a roadshow, though to be welcomed, is problematic unless it can be uniformly delivered to everyone, which I doubt. Whilst I would thank Impiger for his post, it seems a little unfair if those who happen to be working in MoD at the critical time have the benefit of a roadshow, and a demonstration of the calculator, which is not afforded to everyone else.
OKOC,
I have to sympathise with the position taken on advice. The administrators can tell you how the system works, but they are not qualified to give you personal financial advice.
Covec,
The lifetime pension limit to be produced within the "A-Day" rules is, I believe, about £1.5M. This refers to the size of the investment fund which provides your personal pension. The AFPS, just like the National Insurance "Fund", is not a fund at all. There is no pot of money. Your income stream is paid from current Treasury spending via the MoD pay and pensions bill. I don't think you have anything to fear. Enjoy your huge new PAS pension (but spare a thought for the rest of us!)
Regards
Ginseng
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Pension 2005 Roadshow
The briefing in MOD was one of several - each Service will hold at least one: I think the next RAF one is planned for tomorrow and then RN and Army ones next week and/or the week after. Whitehall warriors have been advised to attend at least one as they are reasonably generic but those run by one's own Service are obviously going to be of most benefit.
As for a wider roadshow I have to admit that was my expectation rather than a given. The MOD - RAF presentation was I think run by RAF Uxbridge so if they can do it every Station can.
I believe that once the Offers to Transfer are sent out each individual has 3 months from receipt to decide so the clock is not yet running. The lass who briefed us also mentioned a receipt of offer slip which she implored us all to fill in and return. Why? Well because they will send hasteners to anyone who hasn't decided and they really want to make sure that every individual has received their personal assessment and offer.
I know it is easy to be cynical and scepical about this but the 'system' is really trying quite hard to be squeaky clean on what is after all a rather important change.
As for a wider roadshow I have to admit that was my expectation rather than a given. The MOD - RAF presentation was I think run by RAF Uxbridge so if they can do it every Station can.
I believe that once the Offers to Transfer are sent out each individual has 3 months from receipt to decide so the clock is not yet running. The lass who briefed us also mentioned a receipt of offer slip which she implored us all to fill in and return. Why? Well because they will send hasteners to anyone who hasn't decided and they really want to make sure that every individual has received their personal assessment and offer.
I know it is easy to be cynical and scepical about this but the 'system' is really trying quite hard to be squeaky clean on what is after all a rather important change.
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Impiger
Unfortunately my understanding is that, for the RAF, the 3-month clock starts ticking from the day your OTT pack is despatched (to your pay statement address), not from the day you actually take receipt of it.
Regards
Ginseng
Regards
Ginseng
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Anyone know the consequence of someone on the career stream at the moment who opts to stay on AFPS 75 then transfers to PAS later on down the line - do they have to transfer to AFPS 05 at that point (which actually would probably makes sense cos' its probably worth more on PAS) or could they stay on the old scheme?
What I am trying to say is that if you get an extension of service or if your Commission/Enlistment terms and conditions change are they going to force you onto AFPS 05?
cheers
Oggin
What I am trying to say is that if you get an extension of service or if your Commission/Enlistment terms and conditions change are they going to force you onto AFPS 05?
cheers
Oggin
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You might wish to try this link:
http://www.forpen.co.uk/
I suspect that it is the organisation a previous poster referred to.
c130jb
http://www.forpen.co.uk/
I suspect that it is the organisation a previous poster referred to.
c130jb
Blame My Parrot
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Oggin,
As I understand it, your type of commission should not dictate the pension scheme. It is only personnel who join the services after Apr 05 (?) who will have AFPS 05 as their only option.
I'm FAA PAS and will have the option of either scheme although, for me, adopting the new scheme is virtually a no brainer.
VG
As I understand it, your type of commission should not dictate the pension scheme. It is only personnel who join the services after Apr 05 (?) who will have AFPS 05 as their only option.
I'm FAA PAS and will have the option of either scheme although, for me, adopting the new scheme is virtually a no brainer.
VG
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Oggin,
I believe that once you've made your decision to stay on AFPS75 you won't be able to change to AFPS05 whilst still serving. If you left the services and cashed in on AFPS75, then rejoined, you would automatically be in AFPS05 - but you'd be starting from scratch again.
So you've got to think really hard about your chances of being offered PAS. At the moment, I hear that almost nobody is being offered it - they have probably worked out how much it's going to cost them! By my reckoning (roughly 500 PAS at an extra £10000 a year pension) inclusion of the PAS will cost about £5m a year - and that's just for the RAF!
I wonder if they took that into consideration when they did the sums to make sure that the overall cost of AFPS05 was neutral?
I believe that once you've made your decision to stay on AFPS75 you won't be able to change to AFPS05 whilst still serving. If you left the services and cashed in on AFPS75, then rejoined, you would automatically be in AFPS05 - but you'd be starting from scratch again.
So you've got to think really hard about your chances of being offered PAS. At the moment, I hear that almost nobody is being offered it - they have probably worked out how much it's going to cost them! By my reckoning (roughly 500 PAS at an extra £10000 a year pension) inclusion of the PAS will cost about £5m a year - and that's just for the RAF!
I wonder if they took that into consideration when they did the sums to make sure that the overall cost of AFPS05 was neutral?
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Oggin
VitaminGee and LFFC are absolutely right. 6 Apr 06 is a one-off offer transfer date. That means you have to take your gamble now. Frustrating, but it's one of the conditions.
Regards
Ginseng
Regards
Ginseng