Tories to look at pensions.

[Tourist]

God you lot are a bunch of reactionary whingers.
Talk of the IMF is just silliness.
In 10 years time everyone will have forgotten this latest crash and be busy having another boom.
It's just the way of the world.
Deal with it.

[GOLF_BRAVO_ZULU]

sidewayspeak. I would say your paras 5 and 6 are pretty spot on. It’s old news now but when viewed against this lunacy; http://www.guardian.co.uk/education/2009/jan/05/school-leaving-age

School-leaving age may rise to 18 in effort to tackle unemployment

Without wishing to introduce Thread drift, it does make one wonder what the grand plan is. Preserve the young’ns by wearing out us old buggers? Wouldn’t exactly increase our chances of drawing our Pension for long, would it?

[Biggus]

Tourist,

Not for the first time on pprune you are talking complete tosh.....best stick to what you are best at...."crab bashing"!

When I made reference to the IMF and the UK I said....."If, and it's quite a big if, this country ends up in so much financial pooh that the IMF steps in....". So I caveated my reference to the IMF as a worse case scenario.

As to "booms", nobody has said that the private sector will not be experiencing a boom in years to come, so indeed many (most) people will have forgottten this crash, but we are discussing public (i.e. state) finances/pensions etc and restoring the governments debt to managable levels. The state of public finances effects its spending on the military, and military aviation, hence its inclusion on pprune.

As to what is going on in the world when the IMF are called in:

Ellen Brown: EU, IMF Revolt: Greece, Iceland, Latvia May Lead the Way

IMF Survey: Latvia Struggles to Overcome Economic Downturn

Nathan Lewis: The IMF Destroys Iceland and Latvia

[Blacksheep]

At a recent meeting of our local constituency party, we were entertaining a shadow minister guest along with our own shadow minister MP. The floor was free for questions and I asked about pensions policy. The guest MP began waffling on with the usual platitudes about dwindling numbers of young people, people would have to make their own provisions, blah, blah etc. at which point I interrupted him to point out that it was we constituency members all over the country who chose our candidates and ultimately decided upon policy. It was therefore fair to point out that everyone present had grey hair and was either close to retirement or already retired. Not only that, but it is the older voters who have the highest turn out at election time. Both he and our own MP appeared stunned by all the subsequent "Hear-hears".

Parliament ignores the pension time-bomb at its peril; I hope they took the warning to the next shadow cabinet meeting.

[charliegolf]

MGD

However, if we pull out of Afg, and public attention is switched to something else.................

That's a very salient point from an informed (ish) civvy's point of view. However, my opinion is that another holiday destination will soon heave into view for you guys, maybe maintaining the status quo.

If though, they ignore the signs, and do piss about with pensions, they soon won't have enough boys and girls under arms to keep UK at the top table.

Keep safe.

CG

[dallas]

Presuming any govt who end up in charge next year will resent spending cash on defence, a good way to run down the sector might just be to chop pensions. If you ask Joe Civvy what 'our boys' need, they'll undoubtedly say 'helicopters, body armour and boots' - pensions aren't patriotic bits of kit needed at all costs in foreign lands, and there is unlikely to be much of an outcry from the general public if the apparently generous military pension is brought down to that of the general populous.

That will probably cause an exodus, certainly in older arms like the RAF, but as has been seen during the transition to expeditionary warfare, those who left - and there have been a fair old number - have been replaced by those who know nothing but expeditionary warfare; so it will be with pensions - although I can see it being done in the same way as AFPS05 was introduced, with newcomers only being given the chance to join the new scheme, as those in the old are gradually replaced.

If this happens there may be some fringe benefits though - those who are serving little more than themselves may opt to leave earlier, and the sycophants, whilst often genetically driven to do so, may see evolution leave them behind.

[minigundiplomat]

This is set to rumble on....

Firstly,

Public opinion (at the moment) won't let any government cut our pensions whilst 'our brave lads' are in Afg and the bankers are still awarding themselves bonuses. That could change, but not in the next few years.

Secondly,

if it is introduced, it will only affect those who follow us. Think about it, Flt Lt X* stands up in court with the following defences:

I have only remained in the RAF for the last [insert length of time] because of the anticipated pension. During this time I could have been earning £[insert sum based on Virgin/BA payscaling] and therefore I wish to claim for lost earnings based on a promise that the MOD are now failing to live up to.

or

I, Sgt Y have endured lower than industry average pay for the last 23 years, including a 4% discrepancy set aside for pension contributions, only to find the MOD have now cut my pension.

or

The AF pension was one of the main resons for me staying over the last 10 years. During this time I have spent 4 years in the Middle East facing danger on a daily basis [point to long row of medals] and have been repeatedly seperated from my young family. Having endured all this, the MOD is now cutting my pension.

or

Having been repeatedly moved around the UK and Europe for the past 30 years on behalf of the MOD, I have been unable to put down roots or buy a house. I was depending on the pension in order to do this, however as this has now been cut, I am soon to be made homeless.

*or RN/RM or Army equivalent.


Thirdly,

However much the government wishes to shrink the forces, there are still core branches and pinchpoint trades it knows it needs, even if they give up on their top table aspirations. Do they really want to see all of these people walk, and have the entire armed forces under 25?

I think our pensions are fairly safe (and I use that phrase loosely in the present climate), and there are far bigger issues to grapple with right now if you must worry.
However, if youre about to join up, I would prepare for a BOHICA moment viz a viz pensions.

[8-15fromOdium]

MGD, I completely agree, you only have to look at the uproar concerning Gurkha pensions. Also a certain prospective PM has a very large military/ ex military population in his constituency, I'm sure that fact will concentrate his mind

[The B Word]

MGD, well said mate!

[Al R]

Dallas makes some good points. The RAF has more people serving for longer who leave a lot nearer natural retirement age. I don't suppose the average Tom who does 5 years in the infantry cares too much about things like pensions.

MGD,

Its not ‘just’ the reliable salary that is attractive – its the overall package. Consider being a Sergeant in High Pay Band, Level 7 Pay, on a 6-month Operational Tour.

Salary:

£35,219.00 (not all that shabby in itself?)

(Some) benefits:

Operational Allowance:£13.08 per day for 180 days = £2,354.40
Longer Separation Allowance (LSA)£14.52 per day for 180 days = £2,613.60
Gym = £240.00
Medical Care: (eye, prescriptions dentist etc) Which might be estimated to be = £270.00
Standard Learning Credit: Up to a value of £175.00 pa
Enhanced Learning Credits:Up to a value pa (for a max of 3 years) of £2,000.00
Subsidised Accommodation Families Quarter, Type C:£1,775.72

Total so far.. £44,647.72

Plus pension Benefit (annual MoD contribution) the value of which might be estimated at = £6,832.49

Total (including pension): £51,480.21

Would an engineer be paid that much, or get those benefits? I know that the BAe pension fund requires an employee contribution of 4%. Also, a lot of that added 'hidden' value is fixed, so an SAC gets the same benefit, making his/her salary (pro rata) disproportionately advantaged. Would he/she be as inclined to leave?

The pension scheme is going to evolve, there's no point in wondering about that - it might be that the scheme changes for new members, as have many Final Salary Schemes. But, in making its decision, the MoD will consider how many recruits found their way to a MoD recruiting website, having Googled 'Great workplace pensions'? Not many..?

[WorkingHard]

As I remember the pension payable at 38/16 years was also accompanied by a tax free gratuity of 3 times annual pension. Thereafter the pension was static until the age of 55 was reached and then it was inflation proofed with all inflation increases immediately applied at age 55. Is this now significantly changed?
For those for whom this is a sacred cow please consider where you may be able to aquire such generous pension/retired pay in any other walk of life. The actual pension payable may not be a generous fraction of final salary but dont forget the period you have been able to get this from age 38 and dont forget the tax free gratuity that is payable. When in civvy street one take up to 25% of the "pot" from ones pension then the pot is of course much less and the pension is based on what is in the pot. Yours is not. Please have some sense of what civilian life is truly like in terms of pay and pensions anyway. If not the by all means join the dole queues which many (not all) will surely do because the proper jobs simply are not there. Oh and by the way many of you would only be earning the statutory minimum rates of pay with ALL you living costs to be paid from your earnings.
I wouldn't (perhaps couldn't) do your jobs any more but I do think you need to see what advantages you have by being in the British military.
Keep safe

[minigundiplomat]

Al,

some very good (and thorough) points as usual.

But, in making its decision, the MoD will consider how many recruits found their way to a MoD recruiting website, having Googled 'Great workplace pensions'? Not many..?

Agreed, but the beancounters will look at every angle. The biggy is what can we be taken to court for, and what can be proven.

As the MOD often quote the 'benefits' of the complete reward package as you identified, it then has to deliver. Pensions are one of those elements.

I agree, military pensions will eventually change, but I can't see how any government can cut the pensions of those already in the scheme.

Happy New Year

MGD

[Al R]

No, agreed. It can offer change, but as you say, it runs the risk of being dragged through the Courts by stroppy Chief Techs if it compels it.

The scheme gets fettled with, more often than you might think..

http://195.99.1.70/si/si2009/em/uksiem_20090544_en.pdf

.. so padding in a notice period won't make much difference; if anything, it should have a positive impact on recruiting as people rush to get in with the old scheme. If/when the Tories get in, the time to do anything will be sooner rather than later I guess.

And a Happy New Year to you as well.

[RumPunch]

Well If the government want to implement changes im 100% sure the people at the top of the MOD will fight tooth and nail to prevent or lessen the hit if it should arrise as they too will face the same changes.

MGD had the best valid points yet but just to know where I lie I want to do some research after the NY period because im one of the few thats given my time and contribution from my wage to secure my financial package and If that was taken away I would have no hesitation along with many to take further legal action. Right now although i dont belive much truth in this I can see it being discussed and It is worrying me.

[Al R]

Rum,

I wouldn't worry - all the speculation is about possible future developments. There is nothing proposed let alone confirmed. Nothing would (if at all) come in for a while yet, and even then, it'd probably be just for new entrants.

[Blacksheep]

Would an engineer be paid that much?

A licensed supervisor would be paid quite a bit more than that (around £50-55,000 if on shift with multiple types on his licence or around £40,000 if he was an ordinary "office" engineer) but of course he wouldn't get any pension at all until he retired at age 60+. Also the pension would be contributory with contributions deducted from salary. As for a sandpit job like Camp Bastion, wild horses wouldn't drag any of us there for less than £120,000 plus gratuity.

As an example of a tough civilian tour overseas, separated from home and family, a couple of years back I was working in Belgium on a contract that came out as £72,000 a year (if I'd worked a full year), but I had to pay for my own accommodation - €900 a month = £720/mth = £8,640/yr. So it was worth £63,000 a year in for the inconvenience of being in darkest Brussels, up to my neck in beer and chocolate.

Unfortunately there's a dearth of opportunities as a civilian engineer these days and most of us are either on wage cuts or short time working; some on both.

[Al R]

<Article 10 reduces the age at which Pension Credit Members are entitled to a pension from 65 to 55 for those with a pension sharing orders made on or after 6th April 2009. Article 11 gives those with orders made before this date and who are entitled to a pension at age 65 the option to receive early payment of a pension from age 55 with actuarial reduction.>

The G’ment introduced that Amendment) Order to allow pension credits to be taken earlier than previously (some might remember the Lt Col’s wife who sued the MoD a couple of years back, and this seems to be partly in response to that). So, I imagine that this is going to be, primarily, news for divorcing couples who have been a party (either directly, or indirectly) to the scheme for quite a few years and who are in their late 40’s and 50’s, who are getting divorced and who want some clarity with their disengagement (for want of a better word) financial planning. That SI also only refers to the 2005 scheme, but I imagine that as this has been introduced to avoid discrimination, the rules will apply for all pension credits (ie; from both schemes). It also impacts on folk who got divorced before April 2009.

Before the SI, and previously when pension sharing, all scheme credits remained untouched until the credited member (usually the ex-missus) reached 65, at which point her slice of the pension benefit could then be taken. This change means that the pension credit can be taken by her far earlier (in fact, from the age of 55). And because that is going to have a huge impact on the length of time she can receive benefits (10 years longer), the current Cash Equiv Transfer Value (CETV) which is invariably used, is going to be skewed in proportion to the total amount of benefits that that person is going to be able to draw upon. In other words, if the ex wife is going to have access to benefits for longer (from 55), then does the same amount need to be shared right now? As the scheme is unfunded (in thne technical sense), there is little chance the g'ment defaults (gulp, famous last words).

The CETV wasn’t designed for use in the divorce process – although it has become so. It is the simply the amount of cash a scheme will transfer out should a member leave, which is what pension sharing usually focuses on.. and which is what a divorce court usually focuses on.

The 05 scheme does not allow for Early Departure Payments - members between 39 and 55 and who have got 18 years service in, have CETVs only valued from the age of 65. This anomaly is despite the fact that if they left they would receive a lump sum and between 50% and 75% of their pension immediately. There are many tales of servicemen who have huge differences in the value of benefits and CETVs and it ignores the fact that if the member ‘stays in’ for just a few more years they might be eligible to take their pension early, rather than waiting until 60 or 65, at which point, the value changes dramatically. CETVs therefore, are invariably lower, which might of course, appeal to some.