Armed Forces pension

[ALM In Waiting]

This also interests me greatly being AFPS 75 too. From what I have pieced together from the recent pensions aide memoire on the intranet it seems unlikely that IP will be honoured. I'm basing this on the fact that the 10 years to go, no change proposal only refers to the 'normal' retirement age of 55. No mention is made of IP or to being within ten years of it. I think we are likely too just retain our earned pension, ie your pension will be based on your current rank at changeover, not your longest held rank as under the new career average scheme. Sorry if this is somewhat rambling.

[Too Old Too Soon]

By 2015 I'll be a level 9 Flt Lt. I'll also be knocking on the door of promotion. From a purely "looking after number one" point of view, all I really want to know is will it be worth it? Will it be worth the grief of sucking up 5 years of crappy SO2 jobs and secondary duties (which in my branch really are pretty rubbish)? 5 more years of pay increments may make those secondary duties and crap postings a little easier to swallow, but if they career average earn my last 5 years as an SO2 all the way back to being a Fg Off then it begs the question "what's the point"?

Is this how it'll work?

When I get to Level 9 that's it, no more increments, zilch, I'm not getting any more pay rises. The carrot on the stick has always been "work a bit harder, put in the extra hours and get promoted", as the pension is final salary so it's worth sucking it up for the benefits i'll accrue in later years. Now with the final salary bit only protected until 2015, if like me you want to leave by 2020, all of a sudden where's the incentive?

[ALM In Waiting]

I'm no expert but I imagine all your pre future pension scheme service will be based on your rank at the changeover to the new system. i.e. if you made sqn ldr before the changeover all your previous service would count as sqn ldr for pension purposes, or if you were Flt lt at changeover all service would count as Flt lt. The averaging would then begin, but you would have to stay in quite a while to get your 'average' in a higher rank. I'm no expert and this is assuming quite a bit, so take it with a pinch of salt.

[Lima Juliet]

I started as a short service but changed to a PC, hence 16+2 years for me

So did I, and I could have left with a pension at 16/38 with an AFPS75 pension - so not sure how you arrived at this.

I also left recently to "bank" my gratuity and get the pension up and in payment at my 22 point. I have to say that Xafinity Paymaster are very good and the pension is exactly as advertised. I'm now earning a new pension that I hope will be better at 55/60 than it would have been if I'd stayed in on AFPS75 (plus I'm set for another tax free lump sum ). After 22 years I decided it was time to look after No1.

LJ

[Too Old Too Soon]

The terms given to me to change from a SSC to a PC included a further two years service, so my exit date moved from 2018 to 2020. No idea if this is normal but that's the case for me, and for a lad who did the same a year before me.

[Lima Juliet]

I guess you're on terms of service for AFPS05 (ie. with a new 18/40 point) but remaining on AFPS75 pension - sounds like a good deal to me as they could have insisted on you moving to AFPS05

[ericthered7]

Too Old Too Soon,
I believe that although your terms were changed from 16/38 to 18/40 on signing for a PC from a SS you can still PVR to exit at the 16/38 point and retain and immediate pension and gratuity although it would be abated slightly due to the early exit. Try it on the calculator with an exit date 2 years early. It appears this way for my other half which is what we are banking on!!!

[Tinribs]

pension suspects

We are right to suspect any fiddling with the pension system

I recall being assured in the 70s we would loose nothing by the service opting out of SERPS because only the increased weekly rate would be affected not the basic

Having worked for 43 years and retired from full time at 65 I don't get a full state pension, why not, RAF time doesn't count for SERPS

Also service pre 21 doesn'y count for Offs but does for men, I didnt find that out untill after I retired

[nice castle]

Too old, it appears to be the case now that there are no guarantees. Forward planning is thus made difficult. To avoid disappointment involves planning for the worst, but hoping for the best, and expecting the unexpected.

May I say, with such a definite mindset to leave in 8 years time, are you actually enjoying your (one) life? It's not a rehearsal, and if in 6 years time you're on a bitter slog to the end, just as they pull the rug from under the pension scheme, how would you feel? Like this:

Have a think. If the rewards of leadership stemming from promotion don't float your boat (they're not for everyone), then the lack of cash that is affecting the military is making it a very average employer, at best. The opportunities for AT and decent exercises have been badly depleted. Professional reward is abundant due to the sandpit, but again, give it a few years and we'll all be moaning there's nothing to do but pull up a sandbag and listen to bore stories.

Sorry to sound so glum; I'm not trying to encourage you to leave, more trying to check that staying in will result in happiness!

[Uncle Ginsters]

Lack of cash? Self-imposed hardship.

We seem to continually hear of the global 'lack of cash' as justification for current change and hardship. Let's remember that that 'lack of cash' has just underspent sufficiently to buy a £200m C-17.

I would suggest that any 'lack of cash' for the boys and girls on the shop floor is driven only by the penny-pinching mentality of those above us who perceive savings as a measure of success.

There is an ever-growing disquiet caused by that mentality that is only likely to snowball.

Let's hope the pension can't be altered too much - it's all we have left.

[Albert Another]

U.G,

Well put. I couldn't agree more.

[Voxpop]

Framework Document

As promised, I asked where we were with getting sight of the Framework Document. It appears that a couple of issues are being ironed out with the Treasury and, until they are, the document cannot be finalised.

Keep an eye on our website (The Forces Pension Society).

[Voxpop]

new pension scheme

At the risk of boring you, I am afraid that your questions cannot be answered fully until the framework document is published.

The Armed Forces (Pensions and Compensation) Act 2004 has a provision which protects accrued rights, we are told that the IP will be honoured in so much as the proportion earned at the change over date will be paid at the IP point, and we are told that those aged 45 and above on the change over date will see no difference. However, we need to see this, and the other proposals, in black and white.

[Albert Another]

All those over 45 years old I imaging were planning to stay to 55 anyway. It is those in their early forties that could have the most to lose. This is where the levy could be breeched and a generation of ‘potential lifers’ experience lost as they get out before any changes occur (if they have any serious financial life-planning impact).

[david parry]

Loved the Dit from today's Telegraph..... Interesting that the Govt told the Armed Forces that their pensions had been moved to CPI, on advice from the BofE, stating it was a more appropriate inflationary measure for retired persons. When asked what measure the BOfE use for their pensioners????? The answer RPI....You couldn't make it up

[Al R]

The Bank of England Pension Fund is a private scheme, and therefore probably not the best for a like for like comparison. But I take your point! Having said that, as barometers go, it raised a few pension-geek smiles when it reduced its exposure to Gilts a few years ago and plumped for some inflation linked investments instead - the writing was on the wall! I'm an IFA and I'm in the Forces Pension Society because just as the BoE scheme members have people batting for them, Forpen is the closest 'we' have. Well worth the very modest annual fee and they make good coffee (look out for my spiffing ad in the next issue of Pennant too. ).

Finally, by way of info and not advice, for those higher earners - the Lifetime (pension) Allowance is reducing from £1.8 millions to £1.5 millions. Caution needs to be exercised when considering your options, but if you expect your total pension benefits to be worth more than £1.5 millions, you can apply for 'Fixed Protection' if it is in your specific best interests to do so. Fixed Protection means that your pension benefits are protected from any tax charge up to the value of £1.8 millions - this is not the same as not paying tax on pensionable income. But it could mean that you need to review things, especially if you're 2 or 3* and above and/or expecting a new job anytime soon..

The deadline for applying for Fixed Protection is now only weeks away - 5 April 2012.

[reynoldsno1]

I applied for my preserved gratuity and pension last year, which was acknowledged at the end of Sep 11. No details of amounts. At the same time I sent overseas payment details to Xafinity.

I have heard nothing since, and I have passed the qualification age now. I sent an email a few days ago to JPAC at the SPVA. No response yet. Is this a normal state of affairs?

[Mightycrewseven]

Extremely Difficult Decision Time

OK, I'm now completely stumped as to what direction to take now.

I have already passed my IP and am serving to 55yrs, which puts me in a position that I can leave (under Early Termination (pka PVR) with my AFPS 75 pension intact at any time - a very good place to be!

As a top level Flt Lt (Level 9) and having just missed out on promotion over the previous few years, without any carrots now is a good time to consider my options outwith the RAF. However, totally out of the blue and unexpected, I have been offerd PAS - very happy days! Only problem is, the 5yrs Return of Service that acceptance of PAS demands takes me beyond the 2015 Service Pension Change. Moreover, as a previous poster highlighted, I have just turned 40 and will therefore not be 'protected' from any pension changes that are likely to arise in 2015 (clever move by the government to get Seniors (45yo +) to not kick up any fuss!).

My issue is that without the Basic Framework details I feel that I cannot make an informed decision as to whether accept the offer. If I accept, I obviously achieve a better pension but I risk losing more by not having an option to leave if the changes are drastic

What would my employment rights be if I accepted the offer but then tried to leave inside the 5yr RoS???

[Al R]

The problem is, the deal isn't finalised yet and is still being negotiated - a good reason to swell Forpen coffers maybe. Don't forget though, that (subject to confirmation), the Rights that you have accrued at the time and point the pension changes will be ring-fenced. So, although you will have to endure 2 years worth of the new deal if you elected to leave in 2017 (assuming the new deal starts in 2015), the remainder of your pension will treated iaw your current terms. Might that be palatable enough?

I don't know what your employment rights would be, sorry.

[Sandy Parts]

if you leave within 5-yrs of moving onto PAS, you will get a pension based on the Spec Aircrew Terms of Service (SATOS). This is covered in the relevant AP. The rates are harder to find - try a search for SATOS as pdf copies lurk on t'internet. This is how it works under AFPS75. If AFPS2015 comes along, I would expect existing AFPS75 arrangements to be honoured as I understand it is too difficult to change? (act of parliament or somesuch?). I was in your boat a while back and made my decision based on "what have you got to lose by going PAS?"