So you thought your pension was safe!
Several years ago I was offered a job by Westlands within their Product Support Department. However, when hearing the terms of employment, I stated that the pay they were proposing was less than I was getting in the Service the response was "Well you are getting your Service pension which will make up the difference". The answer was "Goodbye Westlands".
Join Date: Dec 2001
Location: Nottingham UK
Age: 84
Posts: 5,575
Likes: 0
Received 0 Likes
on
0 Posts
were those terms of service the same as those on offer to others without a service pension?
Join Date: Feb 2008
Location: Here, there and everywhere
Posts: 65
Likes: 0
Received 0 Likes
on
0 Posts
Altering either AFPS 75 or 05 could have many problems; these, to name a few:
- Do we get the notional 11% back in our pay to allow us to fund our own pension pot?
- If the enforced retirement age is 55, can they defer payment to 65?
- If there are no option points you lose both the pension "trap" retention and possibly lose people earlier or gain an ageing service population who try to stay until 55.
I'm sure there are lots more issues, particularly emotive ones, but the first point has been commented on before; if our take home pay is less because we have a great non-contributory scheme, what happens when that scheme goes - does pay go up? Will there have to be changes to the retirement age, possibly up to state pension age!! What incentives will have to be introduced to retain those no longer motivated by the pension trap?
Answers on a postcard/postage stamp, please.
- Do we get the notional 11% back in our pay to allow us to fund our own pension pot?
- If the enforced retirement age is 55, can they defer payment to 65?
- If there are no option points you lose both the pension "trap" retention and possibly lose people earlier or gain an ageing service population who try to stay until 55.
I'm sure there are lots more issues, particularly emotive ones, but the first point has been commented on before; if our take home pay is less because we have a great non-contributory scheme, what happens when that scheme goes - does pay go up? Will there have to be changes to the retirement age, possibly up to state pension age!! What incentives will have to be introduced to retain those no longer motivated by the pension trap?
Answers on a postcard/postage stamp, please.
Tory government would scrap gold-plated public pensions
So anyone had any more thoughts on where those of us on AFPS 75 will stand if Cameron and his mob get into power next year? The Telegraph today doesn't make for comfortable reading in respect of pensions.
Are there any members of the Forces Pension Society on here? What's the feeling amongst the FPS about any change of govt. Funnily enough, breakfast news had an interview with a representative of the senior civil service pensions society - he believed these pensions were sustainable!
This would include a review of lucrative final-salary pension schemes which are now almost obsolete in the private sector.
David Cameron, the Tory leader, and George Osborne, the shadow chancellor, are determined to tackle the “pension apartheid” between the public and private sectors.
Mr Osborne has drawn up plans that would begin by looking at highly paid GPs.
He has identified how some GPs “retire”, taking a full pension, only to be re-employed shortly afterwards as a consultant within the NHS.
A senior Tory source said: “It is clear that this sort of practice has got to stop and this is the area we will look to tackle initially.”
Although far-reaching reforms to public pensions are unlikely to be retrospective, the proposals are certain to trigger an outcry from unions that will test Mr Cameron’s resolve if he wins power.
At the start of a wide-ranging Daily Telegraph series on the Conservatives, Mr Osborne today writes that the country can no longer afford the “large increases in public spending” over which Labour has presided.
And he condemns Gordon Brown for carrying on spending in an attempt to limit the damage to his election chances next year.
He writes: “Most other countries are looking for ways to turn the spending taps off, not to turn them up.”
Mr Osborne is wary about making a commitment before the election to scrap final salary pension schemes, but the inequity between what private sector workers retire on and the current public sector deals will be addressed.
Those lower paid public sector workers, including teachers, nurses and some council employees, will for the large part be left untouched by the Conservative clampdown.
There are five million public sector workers currently entitled to a state pension when they retire, at a cost to the taxpayer of up to £500,000 each.
Local government workers make up the largest number at 1.6 million, followed by 1.5 million NHS staff, 600,000 teachers, a similar number of civil servants, 200,000 members of the Armed Forces, 150,000 police officers and 50,000 firemen.
Most state employees still enjoy generous final salary pension schemes, which means their pension is based on the salary they retire on, with many also “index linked”, keeping pace with inflation.
David Cameron, the Tory leader, and George Osborne, the shadow chancellor, are determined to tackle the “pension apartheid” between the public and private sectors.
Mr Osborne has drawn up plans that would begin by looking at highly paid GPs.
He has identified how some GPs “retire”, taking a full pension, only to be re-employed shortly afterwards as a consultant within the NHS.
A senior Tory source said: “It is clear that this sort of practice has got to stop and this is the area we will look to tackle initially.”
Although far-reaching reforms to public pensions are unlikely to be retrospective, the proposals are certain to trigger an outcry from unions that will test Mr Cameron’s resolve if he wins power.
At the start of a wide-ranging Daily Telegraph series on the Conservatives, Mr Osborne today writes that the country can no longer afford the “large increases in public spending” over which Labour has presided.
And he condemns Gordon Brown for carrying on spending in an attempt to limit the damage to his election chances next year.
He writes: “Most other countries are looking for ways to turn the spending taps off, not to turn them up.”
Mr Osborne is wary about making a commitment before the election to scrap final salary pension schemes, but the inequity between what private sector workers retire on and the current public sector deals will be addressed.
Those lower paid public sector workers, including teachers, nurses and some council employees, will for the large part be left untouched by the Conservative clampdown.
There are five million public sector workers currently entitled to a state pension when they retire, at a cost to the taxpayer of up to £500,000 each.
Local government workers make up the largest number at 1.6 million, followed by 1.5 million NHS staff, 600,000 teachers, a similar number of civil servants, 200,000 members of the Armed Forces, 150,000 police officers and 50,000 firemen.
Most state employees still enjoy generous final salary pension schemes, which means their pension is based on the salary they retire on, with many also “index linked”, keeping pace with inflation.
Join Date: Jul 2007
Location: Germany
Posts: 1
Likes: 0
Received 0 Likes
on
0 Posts
My understanding is (after asking the chap from the afrmed forces pensions society) there can legally be no retrospection. Any changes can only be made to future pensions provision, what you have already earned, you keep.
Can you honestly imagine the tories taking away pensions away from the forces? I cant. They may pare back 1* and above, or set a maximum pension, but would this necessarily be a bad thing? We might actually get air rank with balls as opposed to staying in the job to get a bigger pension.
Can you honestly imagine the tories taking away pensions away from the forces? I cant. They may pare back 1* and above, or set a maximum pension, but would this necessarily be a bad thing? We might actually get air rank with balls as opposed to staying in the job to get a bigger pension.
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
They wouldn't change existing retirement contracts. Although, in the wider sense, the Tories have said that they will support Pensions Act 2007 provision which sees workplace contracts introduced from 2012, which compel (by default anyway) employee and employer contributions into a pension scheme. Said contracts are being seen by many as an excuse for some employers to dumb down existing arrangements to save money.
I don't own this space under my name. I should have leased it while I still could
A similar thing to GPs pensions exists with former service personnel retiring with a pension and then taking up employment as FTRS or CS. They get their pension and then start to build up a second pension. There are penalties and so on before 55 but after 55 you get the full unabated pension.
However these are existing T&Cs so would need to be introduced in the future. So much of what both parites would do are cast far in to the future. Sometimes we forget and suddenly it all goes dark when the legislation kicks in.
However these are existing T&Cs so would need to be introduced in the future. So much of what both parites would do are cast far in to the future. Sometimes we forget and suddenly it all goes dark when the legislation kicks in.
Inter Arma Enim Silentius Lex Legis
Join Date: May 2000
Location: England
Posts: 733
Likes: 0
Received 0 Likes
on
0 Posts
AIU which ever party comes to misrule from next June there can be no retrospective action for those who are already in possession of a pension benefit.
They can ONLY alter the T&C's for those who are in a scheme but not yet drawing benefits from that scheme.
At least that is what the trustees of my railway pension scheme have advised its members in a recent newsletter.
TG
They can ONLY alter the T&C's for those who are in a scheme but not yet drawing benefits from that scheme.
At least that is what the trustees of my railway pension scheme have advised its members in a recent newsletter.
TG
Gorilla
That's what I am concerned about - namely that as I (and many like me) are not yet drawing our pensions, we will suddenly find the rug pulled out from under us just before we are about to start drawing it.
I'm hoping that the change from AFPS 75 to 05 will be enough to keep thm happy and leave those of us on the 75 scheme to get the benefits we have signed up to and worked for. Given the current state of the country, economy and the general contempt with which we are held by the politicians, I'm getting increasingly worried every time the Tories say anything about pensions.
What's the betting that any move by a future govt to degrade the AFPS 75 scheme prompts a flurry of people leaving in order to draw their benefits before they are lost
That's what I am concerned about - namely that as I (and many like me) are not yet drawing our pensions, we will suddenly find the rug pulled out from under us just before we are about to start drawing it.
I'm hoping that the change from AFPS 75 to 05 will be enough to keep thm happy and leave those of us on the 75 scheme to get the benefits we have signed up to and worked for. Given the current state of the country, economy and the general contempt with which we are held by the politicians, I'm getting increasingly worried every time the Tories say anything about pensions.
What's the betting that any move by a future govt to degrade the AFPS 75 scheme prompts a flurry of people leaving in order to draw their benefits before they are lost
Join Date: May 2006
Location: london
Posts: 72
Likes: 0
Received 0 Likes
on
0 Posts
Back in the early 90s whilst on a UN tour, chatting to a Canadian colleague about a similar topic, he said that in Canada mil pensions had been paid tax free and a change of Govt changed the rules and pensions were then taxed. Not sure how correct this info was, is anyone in a position to comment. If it is correct then could something similar happen here with pensions getting 'special' tax treatment?
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
Your pension is treated as income and effectively treated as if it were taxed (unless you have the funny pension of course, which is treated completely free of tax). But it is done so by abatement of your tax code - a moot point perhaps, but it does mean that it isn't tax free in the first place, so therefore isn't liable to any further erosion.
The military pension is an unfunded scheme which is based on 'prerogative instruments'. PIs are not subject to approval, annulment or amendment by Parliament - they derive their authority directly from HM and has a kitty which is drawn directly from the 'Consolidated Fund', so the amount would seem safe. The annual amount required fopr each year is voted in in Parliament and it'd be a brave person who dissents.
Under the Naval and Marine Pay and Pensions Act 1865, PIs for the RN and RM are by an Order of Council, for the Army it is the Pensions Warrant 1977 and for the RAF it is the QRs (for the Royal Air Force). Of course, the rules can change for new entrants.
The military pension is an unfunded scheme which is based on 'prerogative instruments'. PIs are not subject to approval, annulment or amendment by Parliament - they derive their authority directly from HM and has a kitty which is drawn directly from the 'Consolidated Fund', so the amount would seem safe. The annual amount required fopr each year is voted in in Parliament and it'd be a brave person who dissents.
Under the Naval and Marine Pay and Pensions Act 1865, PIs for the RN and RM are by an Order of Council, for the Army it is the Pensions Warrant 1977 and for the RAF it is the QRs (for the Royal Air Force). Of course, the rules can change for new entrants.
Join Date: Jul 2004
Location: UK
Posts: 164
Likes: 0
Received 0 Likes
on
0 Posts
Former service personnel retiring with a pension and then taking up employment as FTRS or CS. They get their pension and then start to build up a second pension. There are penalties and so on before 55 but after 55 you get the full unabated pension.
Not unless the rules have changed recently! I served as a regular until age 54 and then 5 years as FTRS. Despite a popular misconception that the full pension is reinstated at 55, my pension was abated for my full period of FTRS service so that I only received the same as my equivalent rank coleagues from pension plus salary (ie Full seniority Sqn Ldr pay while in FO/FL post). I did however accrue 5 years extra pension.
Guest
Posts: n/a
I am now drawing my pension and I have a separate tax code for this (i.e. pay 40% on all of it) and a different code for my new main job.
Melchett and AIR - thanks for your contributons to this thread. Nice to see a thread totally devoid of nonsense and, instead, containing a lot of informed opinion.
I agree with a couple of other contributors in that, since 1997 when Brown "prudently" raped the pension system of certain tax benefits, the whole shebang has been doomed to crisis. Literally billions each year have been creamed off from this policy, mainly to help pay for the three additional parliaments and all the associated staff and other costs that go along with them. Did you all know, for example, that the main Westminster coffers subsidise the Scots, Welsh and Irish enormously? If each regional parliament was made to be self-sufficient this would go some way to reducing the additional burden carried presently by those in England. Please don't think I have anything against the Scots, Welsh or Irish - I don't. I just fail to see how Brown's vision of a "fair and equal society" works in this instance.
I would like to think that our Servicemen and women will continue to benefit from the pensions they have been promised and rightly deserve. I'm not sure it will actually happen, and agree that should benefits be cut we will see a snow-balling crisis of retention and unrest.
HH
Melchett and AIR - thanks for your contributons to this thread. Nice to see a thread totally devoid of nonsense and, instead, containing a lot of informed opinion.
I agree with a couple of other contributors in that, since 1997 when Brown "prudently" raped the pension system of certain tax benefits, the whole shebang has been doomed to crisis. Literally billions each year have been creamed off from this policy, mainly to help pay for the three additional parliaments and all the associated staff and other costs that go along with them. Did you all know, for example, that the main Westminster coffers subsidise the Scots, Welsh and Irish enormously? If each regional parliament was made to be self-sufficient this would go some way to reducing the additional burden carried presently by those in England. Please don't think I have anything against the Scots, Welsh or Irish - I don't. I just fail to see how Brown's vision of a "fair and equal society" works in this instance.
I would like to think that our Servicemen and women will continue to benefit from the pensions they have been promised and rightly deserve. I'm not sure it will actually happen, and agree that should benefits be cut we will see a snow-balling crisis of retention and unrest.
HH
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
Harry,
I hope you retired as close to April (well, after it!) as possible and I'm not sure of your age, but don't forget (?), pension legislation changes next April. Then, you'll have to be over 55 in order to draw retirement benefits. If you aren't yet 55 but are over 50, then it is is possible for you to continue making private pension contributions, get a further 20 or 40% uplift on all your contributions (depending on your marginal rate - normal or higher rate tax payer) and if you like, then take up to 25% tax free cash next April and draw income from the rest or keep it invested. As long as you're earning what you're chucking in and can afford it, and if it suits you, then its a (potentially) good tax efficient use of military pension payments by recycling additional taxed income/cash.
I hope you retired as close to April (well, after it!) as possible and I'm not sure of your age, but don't forget (?), pension legislation changes next April. Then, you'll have to be over 55 in order to draw retirement benefits. If you aren't yet 55 but are over 50, then it is is possible for you to continue making private pension contributions, get a further 20 or 40% uplift on all your contributions (depending on your marginal rate - normal or higher rate tax payer) and if you like, then take up to 25% tax free cash next April and draw income from the rest or keep it invested. As long as you're earning what you're chucking in and can afford it, and if it suits you, then its a (potentially) good tax efficient use of military pension payments by recycling additional taxed income/cash.
Join Date: Nov 2004
Location: ENGLAND
Posts: 80
Likes: 0
Received 0 Likes
on
0 Posts
Some well informed comments posted-thanks for the info.
Just to clarify a couple of points and please accept that all opinions are given in good faith and correct to the best of my knowledge. I am in the fortunate position of drawing the pension post PVR having passed the 38 point and in civvie employment offering a final salary scheme after 5 yrs of service. I took advice from an IFA recently re pensions and was told that pension law and contractual law are seperate issues ie. at any time an employer can change your pension provided they offer an alternative. Without wishing to thread creep as to wether HM Forces have contracts I believe that any Air Force Act re pensions could be changed accordingly to alter pension rights for those not allready drawing one.
The fact is that in civvie street few employers offer final salary schemes. Most who did offer them closed them to new employees initially before scrapping the schemes entirely causing much bad blood for those who had the rug pulled from under them. Indeed, this issue is the reason Barclay's employees may well strike in the near future, keep an eye on that case for a taste of what happens in the civvie world as the public sector will follow in due course.
The terms and conditions for HM Forces are hard earned and richly deserved. Fight to retain what you believe is rightly yours, a decent pension is high on that list.
Just to clarify a couple of points and please accept that all opinions are given in good faith and correct to the best of my knowledge. I am in the fortunate position of drawing the pension post PVR having passed the 38 point and in civvie employment offering a final salary scheme after 5 yrs of service. I took advice from an IFA recently re pensions and was told that pension law and contractual law are seperate issues ie. at any time an employer can change your pension provided they offer an alternative. Without wishing to thread creep as to wether HM Forces have contracts I believe that any Air Force Act re pensions could be changed accordingly to alter pension rights for those not allready drawing one.
The fact is that in civvie street few employers offer final salary schemes. Most who did offer them closed them to new employees initially before scrapping the schemes entirely causing much bad blood for those who had the rug pulled from under them. Indeed, this issue is the reason Barclay's employees may well strike in the near future, keep an eye on that case for a taste of what happens in the civvie world as the public sector will follow in due course.
The terms and conditions for HM Forces are hard earned and richly deserved. Fight to retain what you believe is rightly yours, a decent pension is high on that list.
Join Date: Nov 2003
Location: Just down the road from ISK
Posts: 328
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by AL R
Harry,
I hope you retired as close to April (well, after it!) as possible and I'm not sure of your age, but don't forget (?), pension legislation changes next April. Then, you'll have to be over 55 in order to draw retirement benefits. If you aren't yet 55 but are over 50, then it is is possible for you to continue making private pension contributions, get a further 20 or 40% uplift on all your contributions (depending on your marginal rate - normal or higher rate tax payer) and if you like, then take up to 25% tax free cash next April and draw income from the rest or keep it invested. As long as you're earning what you're chucking in and can afford it, and if it suits you, then its a (potentially) good tax efficient use of military pension payments by recycling additional taxed income/cash.
I hope you retired as close to April (well, after it!) as possible and I'm not sure of your age, but don't forget (?), pension legislation changes next April. Then, you'll have to be over 55 in order to draw retirement benefits. If you aren't yet 55 but are over 50, then it is is possible for you to continue making private pension contributions, get a further 20 or 40% uplift on all your contributions (depending on your marginal rate - normal or higher rate tax payer) and if you like, then take up to 25% tax free cash next April and draw income from the rest or keep it invested. As long as you're earning what you're chucking in and can afford it, and if it suits you, then its a (potentially) good tax efficient use of military pension payments by recycling additional taxed income/cash.
If that's the case, I'm off NOW!!
Serious question actually guys and gals, does anyone know?
Join Date: Dec 2006
Location: Bury St. Edmunds
Age: 64
Posts: 539
Likes: 0
Received 0 Likes
on
0 Posts
Military personnel "sell by" date........
As jpboys says "The terms and conditions for HM Forces are hard earned and richly deserved. Fight to retain what you believe is rightly yours, a decent pension is high on that list."
The main difference with the armed forces as an employer when compared with civvy street is the fact that the army/navy/air force really only want 17-38 year-olds in the majority of ranks (both commissioned and non-commissioned) and a spattering of people aged 40 plus, who are either destined for high command, staff positions etc. or else in specialist roles as aircrew or whatever. In which case service to 55 is an option. To get the scewed age profile it chucks loads of people out well before their "sell by date"
By and large though, after age 55 the armed forces don't want you any more (no matter how good or useful you might be) and for many this is where their income peaks. By contrast, in civvy street, many people find that their careers can last another 5 or 10 years and the military pension is a very useful "top up" when having to start a second career late in life.
Take it away and retention levels will plummet, morale will go down the pan and recruitment will suffer too. What is also over-looked is that in the armed forced you can't just give notice and quit. Once you've signed-up that's it - you're locked in. Job security may be some comfort when times are tough outside but it's the last thing you want when the posting's cr4p or there's the offer of a tempting job on the outside.
I can't thing of better ways for an already unpopular, out-of-touch government making itself even more unpopular than by it's cack-handed management of the public purse.
There are very good reasons why those in the armed forces need to be treated differently from those in the civil service, NHS, police, fire service etc. and with a war on this is not the time to go changing peoples hard-won pensions.
MB (ex jp boy
)
The main difference with the armed forces as an employer when compared with civvy street is the fact that the army/navy/air force really only want 17-38 year-olds in the majority of ranks (both commissioned and non-commissioned) and a spattering of people aged 40 plus, who are either destined for high command, staff positions etc. or else in specialist roles as aircrew or whatever. In which case service to 55 is an option. To get the scewed age profile it chucks loads of people out well before their "sell by date"
By and large though, after age 55 the armed forces don't want you any more (no matter how good or useful you might be) and for many this is where their income peaks. By contrast, in civvy street, many people find that their careers can last another 5 or 10 years and the military pension is a very useful "top up" when having to start a second career late in life.
Take it away and retention levels will plummet, morale will go down the pan and recruitment will suffer too. What is also over-looked is that in the armed forced you can't just give notice and quit. Once you've signed-up that's it - you're locked in. Job security may be some comfort when times are tough outside but it's the last thing you want when the posting's cr4p or there's the offer of a tempting job on the outside.
I can't thing of better ways for an already unpopular, out-of-touch government making itself even more unpopular than by it's cack-handed management of the public purse.
There are very good reasons why those in the armed forces need to be treated differently from those in the civil service, NHS, police, fire service etc. and with a war on this is not the time to go changing peoples hard-won pensions.MB (ex jp boy
)
I cant see them tinkering with pensions just at the moment - it's all most people are staying in for. They would end up with thousands walking, pilots, NCA and engineers & rocks, at a very inopportune time.
When the op tempo drops, as we are repeatedly promised it will, then its a different story. As soon as we start a drawdown in Afg, put on your running shoes!
When the op tempo drops, as we are repeatedly promised it will, then its a different story. As soon as we start a drawdown in Afg, put on your running shoes!