New Or Old Pension Scheme???
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New Or Old Pension Scheme???
Hi all, new to the forum and wondered if the RAF groundcrew out there would like to share their views on the 2 pension schemes and the recent OTT(offer to transfer)
I know it differs for most of us but Which is the better in your opinion?
And anything else interesting you know about them, is it just another way for the RAF to "save" money etc etc etc
AFPS 75 OR AFPS 05 Discuss
I know it differs for most of us but Which is the better in your opinion?
And anything else interesting you know about them, is it just another way for the RAF to "save" money etc etc etc
AFPS 75 OR AFPS 05 Discuss
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Seems to be that if you are close to retirement at 55, and think you'll live long enough to benefit from the 65 payout, then the AFPS05 is the way to go.... anyone else? AFPS75 is favoured!
One big gripe..... my FS received the second version of the OTT package after there was a mistake in the first, and noticed that is AVC's had not been included into the equation. When he called up the pension bods to complain, they stated that the decision had been made not include AVC's for people as it was all too dificult.
How can anyone be expected to make a decision without all the facts?!?!?!?
TBK
One big gripe..... my FS received the second version of the OTT package after there was a mistake in the first, and noticed that is AVC's had not been included into the equation. When he called up the pension bods to complain, they stated that the decision had been made not include AVC's for people as it was all too dificult.
How can anyone be expected to make a decision without all the facts?!?!?!?
TBK
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The problem you have is;
1. At what point are you going to retire from the RAF?
2. At what rank will you retire?
3. Is there a cats in hells chance of you getting promoted between now and when you retire?
The new pension scheme is worthless to anyone not coming out at 55yrs service. Basically I come out 07 after 22yrs on the old system as if I transfer to the new system I lose @ £45K by the time I am 65 and god willing live till 80 that loss reduces to @£20K.
So to make the same on the old pension I must eek out my life till over 100, well with the alcohol abuse, exposure to the nasty stuff in the 80's not much chance of that!
For the Gov they hoped that by showing and giving 2 reduced lump sums people would be better off, however that is per circumstance and per individual (oh a new RAF motto there).
For the FS and the WO ranks they will probably make @10K profit overall.
The figures are approxomate as I have not included index linking, pay rises (jokes).
Best advice go see an independent financial manager, may cost a couple of quid but if your in for the long term and can see a good promotion streak ahead it may prove benificial.
1. At what point are you going to retire from the RAF?
2. At what rank will you retire?
3. Is there a cats in hells chance of you getting promoted between now and when you retire?
The new pension scheme is worthless to anyone not coming out at 55yrs service. Basically I come out 07 after 22yrs on the old system as if I transfer to the new system I lose @ £45K by the time I am 65 and god willing live till 80 that loss reduces to @£20K.
So to make the same on the old pension I must eek out my life till over 100, well with the alcohol abuse, exposure to the nasty stuff in the 80's not much chance of that!
For the Gov they hoped that by showing and giving 2 reduced lump sums people would be better off, however that is per circumstance and per individual (oh a new RAF motto there).
For the FS and the WO ranks they will probably make @10K profit overall.
The figures are approxomate as I have not included index linking, pay rises (jokes).
Best advice go see an independent financial manager, may cost a couple of quid but if your in for the long term and can see a good promotion streak ahead it may prove benificial.
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There's a quite stern warning somewhere in all the info that superiors (and subordinates with bigger brains) should not advise others on what to do, but merely to explain what is on offer. This is to prevent being liable for crap advice....
HOWEVER....
if you're as bitter and twisted as everyone else in the mob, you'll believe in the old adage: 'They never offer you something better'.
Yes, there will undoubtledly be people who will be better off, but you can bet your pension ('scuse the pun) that for most people the better option is to stay put. Unless you plan on dying inwhich case your wife will be beter off on the new plan!
HOWEVER....
if you're as bitter and twisted as everyone else in the mob, you'll believe in the old adage: 'They never offer you something better'.
Yes, there will undoubtledly be people who will be better off, but you can bet your pension ('scuse the pun) that for most people the better option is to stay put. Unless you plan on dying inwhich case your wife will be beter off on the new plan!
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Go to the pensions calculator on the web (can't for the life of me remember where it is tho!) and put your details in and it'll give you comparisons of the 2. You can mess about with it and change your rank and your leaving date so you can make a more informed decision. I'm sticking to the old one as I'm far too young to even think about what I'll be up to at 55, let alone know if I'll be alive at 65!
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apart from the new pension which is a lot better...in fact, about £4k a year better. Thank you Mr Blair
So much so, that assuming I leave at my pension point and live until I'm 80, then my rough initial calculations have me losing out by a minimum of around £120K over the course of a lifetime. An having had a play around on the pensions calculator, under the new scheme I need to make Air Rank to come out on top ...... fat chanceHow is that better - unless we're now applying LEAN principles to pensions as well now.
So thanks Mr Blair, PMA et al, but forgive me if I don't believe you when you say I'll be better off
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hmm all interesting points thanx guys, and dont even get me started on lean (god damn tape for ya mug place)
Ive only been in eight years so far and it seems to me having read the "easy to follow" leaflets etc etc ill be better off sticking with the old pension unless i live till im quite old.....which i guess i wont know till i get there lol
Ive only been in eight years so far and it seems to me having read the "easy to follow" leaflets etc etc ill be better off sticking with the old pension unless i live till im quite old.....which i guess i wont know till i get there lol
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Southside, I am really intrigued as to how you have come up with that figure of being £4k better off. I would make sure that your pack-up did not contain an error.
Unless I've really cocked up on my calculations, I reckon that I will be about £1k better-off in total under the new scheme IF I stay in until I am 55, but considerably worse off if I transfer to AFPS 05 and then leave early. With 2 option points between now and then, and of course the PVR route, I consider that it would be foolish for me to transfer. You really need to use the pension calculator and then start doing the sums for annual income after tax etc. Again, unless I'm mistaken, there is a lot more to be lost than to be gained by transferring from '75.
Unless I've really cocked up on my calculations, I reckon that I will be about £1k better-off in total under the new scheme IF I stay in until I am 55, but considerably worse off if I transfer to AFPS 05 and then leave early. With 2 option points between now and then, and of course the PVR route, I consider that it would be foolish for me to transfer. You really need to use the pension calculator and then start doing the sums for annual income after tax etc. Again, unless I'm mistaken, there is a lot more to be lost than to be gained by transferring from '75.
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Whilst I understand that everyone is different I re-checked the figures on the pension caluclator and on the old scheme i will get £26,050 and on the new scheme will get £33,962. Which is £7912 better off.
Youre right in so much as you have to stay til yr 55 to get that AND will be penalised big time if you PVR.
Youre right in so much as you have to stay til yr 55 to get that AND will be penalised big time if you PVR.
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Southside,
I guess you must be aircrew on the Professional Aviator pay spine. I think sievo666 has been looking at it from RAF groundcrews' point of view.
Not everyone is as lucky as us and won the jackpot - so let's spare a thought for others.
I guess you must be aircrew on the Professional Aviator pay spine. I think sievo666 has been looking at it from RAF groundcrews' point of view.
Not everyone is as lucky as us and won the jackpot - so let's spare a thought for others.
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I suspect southside is referring to the pension he will get when he has left school, finished his ATC service, got accepted into the RAF/Army/Navy, completed his training, done some time, grown up a little bit, made some sensible posts on pprune etc etc
Safety_Helmut
Safety_Helmut
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yes i was thinking of groundcrew situation rather than aircrew apologies if i didnt make it clear, although all opinions are greatfully accepted :P
Yes i do think i will be staying with the old scheme as if i decide to leave early for whatever reason at least ill be beter off.
Yes i do think i will be staying with the old scheme as if i decide to leave early for whatever reason at least ill be beter off.
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For PA spine guys. Have you looked at what happens if you PVR so that your exit is 1 day before your 55th b'day. By my caculations you make £17,000! You get your ED payment - £100K, a reduced pension for 10 years (losing about £83K, but then they pay you another £100K on your 65th b'day and you go to the full pension (therefore making 17K!). Or have I overlooked something?
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Further to Norma's reply,
The EDP/lumps are all tax free too, whereas the pension/ early departure payments are taxable. There is certainly a case for 2 tax free lumps as opposed to a higher but taxable pension/payment (whatever they call it) ?
Ginge
The EDP/lumps are all tax free too, whereas the pension/ early departure payments are taxable. There is certainly a case for 2 tax free lumps as opposed to a higher but taxable pension/payment (whatever they call it) ?
Ginge
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I was recently speaking to a WO in the ground trades, aged late 40's, due to leave at Age 55. Like us all, he knows that the new pension at Age 55 is significantly better than the old one. Nevertheless he says its a very difficult decision. He's not happy with the way that the Government is manipulating the Armed Forces and he, quite understandably, doesn't want to commit himself to age 55 just to get a larger pension while selling his sole. He would like to be able to maintain a flexible response to everything that might happen to him in the next few years, which will include the PVR option. Of course, that would mean that he has to reject the new scheme. He says, after 30 years of loyal and enjoyable service, that its so close he could almost taste it, but there are also quite a few years of being disproportionately pi$$ed about ahead. I don't envy his decision. I'm PA and only a few years away from 55. I sent back my acceptance letter and the next day I and 11 others were chosen from a cast of 12 to be dicked about in CS95 from dawn to dusk. Yep, my sole was sold so easily :-(