Legal challenge over pension switch to CPI.
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Legal challenge over pension switch to CPI.
I thought this might be interesting or useful.
Unions plan legal challenge over pension switch to CPI - Telegraph
In a similar vein, I can't find current salary details for 1* upwards anywhere. If anyone is bored and has access to them, could they post/PM me details (including any retirement benefits and other nuances that might not be available to lesser mortals)? Many thanks - I do have a genuine, professional reason.
Cheers,
Al.
Unions plan legal challenge over pension switch to CPI - Telegraph
Organisations representing more than two million public sector workers, including civil servants, council staff and police officers, are to launch a bid for a judicial review into changes to the way that public sector pensions are uprated.
Cheers,
Al.
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2-4 star military officers have their salaried reviewed by the Senior Salaries Review Body. Salary scales are detailed in their 33rd report at Chapter 3.
As for retirement benefits - pension rates can be obtained using the Armed Forces Pension Calculator.
Salaries for 1-star and below are detailed in the Armed Forces Pay Review Body's 40th Report in Appendix 1.
As for retirement benefits - pension rates can be obtained using the Armed Forces Pension Calculator.
Salaries for 1-star and below are detailed in the Armed Forces Pay Review Body's 40th Report in Appendix 1.
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Senior Officer salaries.
I have the pensions calculator CB, thanks anyway. I was interested in the detail of likely pay increases and the future of pay restructuring, and that is in one of those links.
Cheers (and to GB).
Cheers (and to GB).
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The impact of the RPI/CPI switch is certainly significant. Currently going through a divorce and got my first CETV using RPI with a warning that the system was in the process of changing and I would be updated. Just got the update and my pension pot is 50k worse off.
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Turkeys voting for Christmas...
I would suggest that the unions are unlikely to get any joy. The judges enjoy the same salary review board as our senior 2 star and above lords and masters. The system is sewn up in favour of the few. Not bitter about it, but just the way things work in this country.
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Al,
See here for the Annual Rates of Service Retired Pay for 2* and above.
I expect you're looking at how the new lower limits to the annual allowance for pensions is going to impact the high and mighty. Considering that the average 2* will be using about half of his £50k annual pension allowance every year whilst in that rank, he won't have much unused allowance to roll over from the previous 3 years to help when he gets promoted to 3*. I therefore suspect it will hit them quite hard!
See here for the Annual Rates of Service Retired Pay for 2* and above.
I expect you're looking at how the new lower limits to the annual allowance for pensions is going to impact the high and mighty. Considering that the average 2* will be using about half of his £50k annual pension allowance every year whilst in that rank, he won't have much unused allowance to roll over from the previous 3 years to help when he gets promoted to 3*. I therefore suspect it will hit them quite hard!
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Hi LFFC,
To an extent, yes. But its a bit more (potentially) costly than that. You mentioned the changes announced in October of last year. As you know, the annual allowance for pensions saving was slashed from £255,000 per annum to £50,000 per annum. I was after the figures for other reasons though, because more importantly (perhaps!), the lifetime allowance was also slashed from £1.8 millions to £1.5 millions. This will affect those working within the senior levels of the RAF or anyone aspiring to those dizzy heights. Handing your 1250 in wont help either; in Civvy Street pensions savings will still be made in our name by ourselves or future employers. Those payments will add to that lifetime allowance.
What to do? The nuclear option for any IFA is to consider a client leaving a Final Salary Scheme, and in today's compliancy and litigative driven environment even discussing the matter has to be carefully catalogued and justified. The stigma of the NHS opt out debacle of 20 years or so ago still lingers and brings many old skool advisers out in a cold sweat, but whereas that tranche of opt outs was based on lofty aspirations of wealth growing based on forever soaring stock markets, this time, its different. Many well paid public sector employees could be far better off leaving their Final Salary schemes based on a current and very real, highly punitive tax regime reality, and by saving for their futures elsewhere.
I'm doing some work on this at the moment anyway, but if anyone is reading this and thinks it might affect them and wants a free steer, then look at this. Fixed Protection may still be applied for, which might help some and save them a packet.
http://www.hmrc.gov.uk/pensionschemes/lifetime-allowance/savings.htm
Any accrued pension pot over £1.5 millions will incur a tax charge of 55% on those surplus savings - so failing to consider and/or act could quite easily cost a high ranking AFPS scheme member a couple of hundred thousand pounds. Most senior serving officers should have other investments and savings anyway, and although many servicemen do become myopic and overly fixated on investing via their pensions for the immediate tax benefits (I certainly was), those benefits are in many instances, superficial and going fast. They might be short lived and in the long term counter productive, and could be achieved in other ways anyway.
All high earners need to diversify their strategy/portfolios and consider all options. There is not much point in saving like mad for a comfortable retirement if the approach is single stranded and potentially highly punitive anyway. Again, the single biggest benefit to any married couple where one person is not saving for their retirement, is to consider a personal pension in their name. They can have great tax uplift benefits going in, and when taking money out. We all have an annual income allowance up to which, we don't get taxed - many mil families don't use that benefit (usually, its in a wife's name).
edit: For the record, I am not suggesting leaving AFPS having read this. But stay up to date with regards to investment and retirement planning with your own bank/adviser, be aware of what’s happening right now and just around the corner - and always consider options that are right for you.. not the crowd. If anyone wants any info, then please feel free to drop me a PM.
To an extent, yes. But its a bit more (potentially) costly than that. You mentioned the changes announced in October of last year. As you know, the annual allowance for pensions saving was slashed from £255,000 per annum to £50,000 per annum. I was after the figures for other reasons though, because more importantly (perhaps!), the lifetime allowance was also slashed from £1.8 millions to £1.5 millions. This will affect those working within the senior levels of the RAF or anyone aspiring to those dizzy heights. Handing your 1250 in wont help either; in Civvy Street pensions savings will still be made in our name by ourselves or future employers. Those payments will add to that lifetime allowance.
What to do? The nuclear option for any IFA is to consider a client leaving a Final Salary Scheme, and in today's compliancy and litigative driven environment even discussing the matter has to be carefully catalogued and justified. The stigma of the NHS opt out debacle of 20 years or so ago still lingers and brings many old skool advisers out in a cold sweat, but whereas that tranche of opt outs was based on lofty aspirations of wealth growing based on forever soaring stock markets, this time, its different. Many well paid public sector employees could be far better off leaving their Final Salary schemes based on a current and very real, highly punitive tax regime reality, and by saving for their futures elsewhere.
I'm doing some work on this at the moment anyway, but if anyone is reading this and thinks it might affect them and wants a free steer, then look at this. Fixed Protection may still be applied for, which might help some and save them a packet.
http://www.hmrc.gov.uk/pensionschemes/lifetime-allowance/savings.htm
Any accrued pension pot over £1.5 millions will incur a tax charge of 55% on those surplus savings - so failing to consider and/or act could quite easily cost a high ranking AFPS scheme member a couple of hundred thousand pounds. Most senior serving officers should have other investments and savings anyway, and although many servicemen do become myopic and overly fixated on investing via their pensions for the immediate tax benefits (I certainly was), those benefits are in many instances, superficial and going fast. They might be short lived and in the long term counter productive, and could be achieved in other ways anyway.
All high earners need to diversify their strategy/portfolios and consider all options. There is not much point in saving like mad for a comfortable retirement if the approach is single stranded and potentially highly punitive anyway. Again, the single biggest benefit to any married couple where one person is not saving for their retirement, is to consider a personal pension in their name. They can have great tax uplift benefits going in, and when taking money out. We all have an annual income allowance up to which, we don't get taxed - many mil families don't use that benefit (usually, its in a wife's name).
edit: For the record, I am not suggesting leaving AFPS having read this. But stay up to date with regards to investment and retirement planning with your own bank/adviser, be aware of what’s happening right now and just around the corner - and always consider options that are right for you.. not the crowd. If anyone wants any info, then please feel free to drop me a PM.
Last edited by Al R; 26th Apr 2011 at 08:14.
Slightly off topic, but wasn't there supposed to be a CPI pension increase of 3.1% this year? I just received my payment advice for Apr 11 which, when compared to my P60 from Xafinity paymaster, shows no increase.
PC
PC
Peter Carter,
I had a very small increase when my pension was paid on 14 Apr - I intend to wait till the May payment until I query, as that should reflect an entire month with the 3.1% increase which, as somewhat lower than a rocket scientist, I can still work out
I had a very small increase when my pension was paid on 14 Apr - I intend to wait till the May payment until I query, as that should reflect an entire month with the 3.1% increase which, as somewhat lower than a rocket scientist, I can still work out
I don't own this space under my name. I should have leased it while I still could
My pension has risen by 1.5% this month and 2.5% from next month rather than the headline 3.1%
The reason is in the small print on the notification and the gobbledegook in the Pensions newsletter.
My pension for CPI increase purposes has been reduced by 12.8% as GMP has been deducted. GMP is the Guaranteed Minimum Pension.
AFPS contracted out from SERPS but by law has to pay benefits at least as good as SERPS. This is GMP. The Department for Work and Pensions pays part of the annual pensions increase on your GMP with your state pension.
Your military pension increase is modified as you get part of your increase from the DWP through your state pension.
If you earned your military pension after Apr 1988 that part of the GMP will be increased with your service pension but limited to a maximum of 3%.
For all GMP increase before Apr 1988 and anything above 3% (ie 0.1% this year) the increase will be paid by DWP.
I hope that is clear (as mud).
The reason is in the small print on the notification and the gobbledegook in the Pensions newsletter.
My pension for CPI increase purposes has been reduced by 12.8% as GMP has been deducted. GMP is the Guaranteed Minimum Pension.
AFPS contracted out from SERPS but by law has to pay benefits at least as good as SERPS. This is GMP. The Department for Work and Pensions pays part of the annual pensions increase on your GMP with your state pension.
Your military pension increase is modified as you get part of your increase from the DWP through your state pension.
If you earned your military pension after Apr 1988 that part of the GMP will be increased with your service pension but limited to a maximum of 3%.
For all GMP increase before Apr 1988 and anything above 3% (ie 0.1% this year) the increase will be paid by DWP.
I hope that is clear (as mud).
I don't own this space under my name. I should have leased it while I still could
NLH, do you have a frozen UK state pension? The GMP rules must be different.
although many servicemen do become myopic and overly fixated on investing via their pensions for the immediate tax benefits (I certainly was), those benefits are in many instances, superficial and going fast. They might be short lived and in the long term counter productive, and could be achieved in other ways anyway
However, I think that is what I once heard in a SERE brief as a 'small victory'
Gits the lot of them; frankly shooting is too good for the current shower we have cluttering up (both sides of) the Commons
PN, Not reached state pension age yet - when I get there I will have the option of taking the frozen UK pension or NZ Superannuation - still a few years to go so as yet undecided on which course to take
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Melch,
Nothing wrong with that, you'll get you more access and more liquidity. I have just cobbled together myself a smallish high risk portfolio based on natural resources; oil, cotton, gold, copper etc. So get the right basket of funds for you, look closely at the cost and performance of bog standard tracker funds if you're going down the bank route and make sure you have something in cash for emergencies.
If you're suitably inclined and a spicy outlooker though, if want some tax relief and don't need so much access, a VCT, EIS or MIP might be worth looking at. Failing that, if you have an other 'arf, and if he/she doesn't have a pension, consider topping up those contributions and/or paying off any expensive debt first.
HM Revenue & Customs: Venture Capital Trusts
HM Revenue & Customs: Enterprise Investment Scheme (EIS) and Partnerships
Either way, work backwards. Establish what you want to achieve, and extract back to establish current objectives and to minimise risk.
Nothing wrong with that, you'll get you more access and more liquidity. I have just cobbled together myself a smallish high risk portfolio based on natural resources; oil, cotton, gold, copper etc. So get the right basket of funds for you, look closely at the cost and performance of bog standard tracker funds if you're going down the bank route and make sure you have something in cash for emergencies.
If you're suitably inclined and a spicy outlooker though, if want some tax relief and don't need so much access, a VCT, EIS or MIP might be worth looking at. Failing that, if you have an other 'arf, and if he/she doesn't have a pension, consider topping up those contributions and/or paying off any expensive debt first.
HM Revenue & Customs: Venture Capital Trusts
HM Revenue & Customs: Enterprise Investment Scheme (EIS) and Partnerships
Either way, work backwards. Establish what you want to achieve, and extract back to establish current objectives and to minimise risk.
