New pension finalised
Thread Starter
New pension finalised
So the deal is done....the sooner they produce a working calculator the better.
Ministry of Defence | Defence News | Defence Policy and Business | New Armed Forces pension agreed
http://www.mod.uk/NR/rdonlyres/5DD40..._agreement.pdf
Ministry of Defence | Defence News | Defence Policy and Business | New Armed Forces pension agreed
http://www.mod.uk/NR/rdonlyres/5DD40..._agreement.pdf
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Right Gentlemen, all of the shafting aside, can anyone point me at a reputable financial advisor with a complete understanding of how mil pensions work? More importantly, how mine bloody works now! I understand the basics, which appear to be 'if you're not fecked by this, then you're fecked by that'. What I want is cold harsh cash values! Preferably in a slidable scale xls format, Eg: if I leave today or if I leave in a year, what's the difference?
Regards, MM
(10 years in the ranks, a short hiatus and now an O4)
Regards, MM
(10 years in the ranks, a short hiatus and now an O4)
Give Al R a shout. He's a forum regular and will likely contribute to this thread sooner rather than later.
He works for Echelon Wealthcare
Disclaimer: I've never done business with him but his advice in other financial threads made perfect sense to me. Attempting to find the same detail in official documents confused me to hell and back.
He works for Echelon Wealthcare
Disclaimer: I've never done business with him but his advice in other financial threads made perfect sense to me. Attempting to find the same detail in official documents confused me to hell and back.
Monkeyman
Try Armed Forces Pension and Annual Allowance Calculator (AFPAAC)
For the new pension scheme there are a few surprises in store, as far as I can see:
1. Employer cost cap - is this a way for another snivelling pencil neck to fiddle with our pensions inside 25 years?
2. Members transferring between public service schemes to be treated as having continuous Service; Members rejoining after a period of deferment of less than 5 years can link new Service with previous Service - does this mean no more retiring and going FTRS? If it does, it makes a mockery out of the new "no abatement" rule!
3. 1/47th accrual rate is far better than current AFPS05 1/70th rate - however, you need to factor in the £1 pension surrendered to £12 raised in tax free lump sum. When you look at them both I get a 1/56th accrual rate for AFPS05, so the new scheme appears to be better.
4. Early retirements from age 55, with benefits to be actuarially reduced - does this apply to everyone? At present those on Reserve Forces Pensions Scheme need to retire at 60 to get a pension or it is deffered to age 65.
LJ
PS - here's a link about CARE from Echelon Wealthcare...Future Armed Forces Pension Scheme (F-AFPS) CARE.
Try Armed Forces Pension and Annual Allowance Calculator (AFPAAC)
For the new pension scheme there are a few surprises in store, as far as I can see:
1. Employer cost cap - is this a way for another snivelling pencil neck to fiddle with our pensions inside 25 years?
2. Members transferring between public service schemes to be treated as having continuous Service; Members rejoining after a period of deferment of less than 5 years can link new Service with previous Service - does this mean no more retiring and going FTRS? If it does, it makes a mockery out of the new "no abatement" rule!
3. 1/47th accrual rate is far better than current AFPS05 1/70th rate - however, you need to factor in the £1 pension surrendered to £12 raised in tax free lump sum. When you look at them both I get a 1/56th accrual rate for AFPS05, so the new scheme appears to be better.
4. Early retirements from age 55, with benefits to be actuarially reduced - does this apply to everyone? At present those on Reserve Forces Pensions Scheme need to retire at 60 to get a pension or it is deffered to age 65.
LJ
PS - here's a link about CARE from Echelon Wealthcare...Future Armed Forces Pension Scheme (F-AFPS) CARE.
Last edited by Lima Juliet; 16th Oct 2012 at 19:41.
Monkeyman et al,
It is worth joining the Forces Pension Society - Forces Pension Society - Fighting for the Forces and their Families
It is worth joining the Forces Pension Society - Forces Pension Society - Fighting for the Forces and their Families
So what is the deal for those who maybe lucky enough to go onto PA at some point in the future?
The 'deal' being what T&Cs will the system use for the pension?
The 'deal' being what T&Cs will the system use for the pension?
Last edited by Could be the last?; 17th Oct 2012 at 20:24.
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CBLT,
You can expect PA too disappear in the near future; it is too expensive. Increased FTRS will be used instead to retain experience, it is a different question as to if such an offer would retain those that the service would like to keep.
You can expect PA too disappear in the near future; it is too expensive. Increased FTRS will be used instead to retain experience, it is a different question as to if such an offer would retain those that the service would like to keep.
Randomblah
I'm afraid FTRS won't save money if you want to replace Regular Aircrew - they would need to be deployable and that would mean FTRS(Full Commitment) which are paid 14% X Factor, get full medical care, are entitled to SFA and SLA (which are effectively Regulars' terms and conditions). FTRS(Home Commitment) do no time away from home and IIRC FTRS(Limited Commitment) can do up to 21 nights per year away. So how would they replace PAS and save money?
As far as I'm aware, PAS and those others on non-regular pensionable pay spines (like vicars, nurses, tooth farriers and lawyers) will just get the same pension deal of 1/47th (1/56th in real terms). Now this might sound good for those on PAS, butdon't forget that the new scheme is "career averaging" when it comes in, so those jumping from Flt Lt on FP to PAS will get their pension "averaged out" and so will get significantly less than those on the current PAS deal - probably closer to Sqn Ldr's pension rates than Wg Cdr that it is now.
Make sense?
LJ
I'm afraid FTRS won't save money if you want to replace Regular Aircrew - they would need to be deployable and that would mean FTRS(Full Commitment) which are paid 14% X Factor, get full medical care, are entitled to SFA and SLA (which are effectively Regulars' terms and conditions). FTRS(Home Commitment) do no time away from home and IIRC FTRS(Limited Commitment) can do up to 21 nights per year away. So how would they replace PAS and save money?
As far as I'm aware, PAS and those others on non-regular pensionable pay spines (like vicars, nurses, tooth farriers and lawyers) will just get the same pension deal of 1/47th (1/56th in real terms). Now this might sound good for those on PAS, butdon't forget that the new scheme is "career averaging" when it comes in, so those jumping from Flt Lt on FP to PAS will get their pension "averaged out" and so will get significantly less than those on the current PAS deal - probably closer to Sqn Ldr's pension rates than Wg Cdr that it is now.
Make sense?
LJ
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From the above posted calculator link.
So not really much use for those staying after 2015!
FUTURE ARMED FORCES PENSION SCHEME – ACCRUED RIGHTS
2012DIN01-063 outlined the pension rights in AFPS 75 and AFPS 05 that will have been accrued prior to the introduction of the new AFPS from 2015. As a result the forecasts provided by this calculator are no longer complete projections of future entitlement beyond 2015. The calculator will still provide a general guide to benefit entitlement for those due to retire before 2015 and those who are covered by the additional transitional protection outlined in the DIN (ie those who are born on or before 1 April 1967 for regular forces). Details of the new AFPS are being developed and additional information will be promulgated in due course. A revised Pensions Calculator, incorporating both accrued rights and benefit entitlements under the new scheme, will be developed once the final design of the new scheme is agreed. On current planning assumptions it is anticipated a revised calculator will be on line from April 2013.
2012DIN01-063 outlined the pension rights in AFPS 75 and AFPS 05 that will have been accrued prior to the introduction of the new AFPS from 2015. As a result the forecasts provided by this calculator are no longer complete projections of future entitlement beyond 2015. The calculator will still provide a general guide to benefit entitlement for those due to retire before 2015 and those who are covered by the additional transitional protection outlined in the DIN (ie those who are born on or before 1 April 1967 for regular forces). Details of the new AFPS are being developed and additional information will be promulgated in due course. A revised Pensions Calculator, incorporating both accrued rights and benefit entitlements under the new scheme, will be developed once the final design of the new scheme is agreed. On current planning assumptions it is anticipated a revised calculator will be on line from April 2013.
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On the contrary- a useful tool to get a comparison between what you would have got under 75/05 and what you will get under the new pension. The new calculator will inform my decision to stay in, or go and work at Maccy Ds.
Latest article in Pathfinder from the Forces' Pension Society may be helpful to some...
Pathfinder International - The New Armed Forces Pension Scheme - How Good Is It And How Will It Work?
Full text
Pathfinder International - The New Armed Forces Pension Scheme - How Good Is It And How Will It Work?
Full text
The New Armed Forces Pension Scheme - How Good Is It And How Will It Work?
The Outline Scheme Design of the New Armed Forces Pension Scheme has finally been released, and with it has come the inevitable flood of enquiries as to exactly how its introduction will affect individuals...
Lieutenant Commander David Marsh, Pensions’ Secretary of the Forces Pension Society, looks at some of the Scheme’s important elements, and explains how these might impact on somebody on the AFPS75 pension scheme on the date of the new scheme’s inception...
Well, it has finally arrived – almost. There are still one or two details on the matter of the Early Departure Payment (EDP) system attached to the new scheme that need to be ironed out, but otherwise the package appears to be complete.
What of the scheme itself? The first thing that must be borne in mind is that the Ministry of Defence had little choice but to start planning the new scheme using a Career Averaging scheme structure. This was as a result of the study and subsequent recommendations to the Government by Lord Hutton’s report into the provision of pension schemes to the whole public sector.
The Civil Service already had its latest pension scheme based on a Career Averaging structure, but for the rest of the public sector, all, including the Armed Forces, were to move away from a Final Salary scheme.
The two types of scheme are quite different, and so exact comparison between them is not a simple exercise – and it is easy to find individuals who do better under one scheme or the other. In essence, the less successful you are in terms of promotion in your career, the more likely it is that a good Career Averaging scheme will be more advantageous to you than a Final Salary scheme; if you are a ‘high flyer’ then the opposite applies.
Having had the peace and quiet of a spot of leave to digest the document in full, along with the two DINs on accrued rights, I believe it is probably the best proposal out of all the public sector scheme choices in terms of a complete package. It is easy for the cynic to cherry-pick the worst of everything (that is what the press love to do to create sensational stories to sell newspapers), but in overall terms I am 100% sure that the scheme on offer is as good as the Armed Forces could have hoped for - and the biggest coup of all, was gaining the Treasury’s approval not to insist that members of the Armed Forces make personal contributions from salary towards their pension entitlement, at a time when all other members of the public sector were having the level of their direct contributions from salary increased!
Let’s now look at some of the most important elements of the proposed scheme and how it will operate in practice.
The accrual rate of 1/47th is very strong. What this means is that your annual pension award accumulates by 1/47th of your pensionable salary each year. For example if you were a Sergeant in receipt of a salary of £36,437, then your annual pension award would be £775.26 for that year’s service. If the same Sergeant received a salary of £37,412 for the following year, then the annual pension earned for that year would be £796.00.
The previous years’ earned pension will be revalued annually by an Average Earnings Index (AEI). There is more than one AEI, but it is understood the MoD will look to use the National AEI as the fairest index for the purpose of increasing the value of previous years’ earned pension. So, to take our Sergeant’s awards calculated in the previous paragraph, together with an assumption that the AEI was 2.6% for the first year, the first year’s award of £775.26 would grow to £795.42. It is the revalued figure of £795.42 that is then added to the £796.00 at the end of the second year, to give a new total value of annual pension award of £1,591.42.
To take the example one step further, if the Sergeant were subsequently promoted to Staff Sergeant three months into the next year, and received a salary of £38,237 for that year, and the AEI at the end of the second year was 3.1%, he would have earned a a further £813.55 (£38,237/47) towards his overall pension entitlement and his £1,591.42 would be revalued to £1,640.75 which, when added to the £813.55, gives the Staff Sergeant a new annual pension award of £2,454.30.
This may seem more complicated than the basic final salary schemes of AFPS75 and AFPS05, so how can an individual be expected to keep up with his or her pension entitlement. Well, apart from there being an online calculator available (it’s on its way), every serving individual will receive an annual statement of their current pension entitlement as a matter of course – something that you have been entitled to, but denied, for too long! This will remove the need to carry out these calculations yourself. That said, individuals should still be conversant with the processes carried out that lead to the forecast they receive.
To carry on with our Staff Sergeant’s career... Let’s assume that on the day of inception of the new scheme, he had completed 19 years’ reckonable service on the AFPS75 pension scheme, and will leave the Army after 22 years’ reckonable service on 6th April 2018. This means that there is going to be a split pension award on exit – some AFPS75 and some AFPS15. I will deal with the AFPS75 entitlement first.
Even though the Staff Sergeant will not have completed 22 years’ reckonable service on the date the new pension scheme started, he would, on his day of exit, have achieve that amount of service in total, albeit with 3 years of that service under the new pension scheme rules. Therefore, since 22 years’ service will be attained, he will receive an immediate pension and lump sum award on exit under the AFPS75 pension scheme rules.
The rules of AFPS75 state that an individual must complete at least 2 years’ reckonable service in the substantive rank in order to receive a full pension for that rank; if they complete at least 12 months’ reckonable service in the substantive rank, there will be a proportionate increase in the pension award based on the rates payable for each of the two ranks.
Unfortunately, as our Staff Sergeant did not complete 12 months’ reckonable service in the substantive rank, his AFPS75 pension award will be based on that of a Sergeant for the full 19 years.
The current annual pension award after 22 years’ service for a Sergeant is £10,509; therefore the award of a pension payable immediately on exit under AFPS75 would be 19/22nds of the £10,509 (£9,075.95) and a lump sum of 3 times that figure (£27,227.85).
What of the small pension earned under AFPS15? Assuming our Staff Sergeant is 41 on exit and has completed over 20 years’ service, his full pension becomes a deferred pension payable from State Retirement Pension Age. However, because he is aged 40 or over and has completed at least 20 years’ reckonable service, he qualifies to receive EDP payments.
The amount of EDP income stream payable is based on 34% of the pension earned plus 0.85% for each complete year beyond the EDP qualifying point. Our Staff Sergeant reached his EDP point at age 40 (he had completed 21 years’ reckonable service then), so given that he has completed one further year beyond his EDP qualifying point he will receive an EDP income stream of 34.85% of £2,454.30 (£855.32). Please note that you only need to hold the rank for one day and that one day’s salary in the higher rank is pensionable under the new AFPS15 scheme rules.
The amount of EDP lump sum is equal to 2.25 times the value of the pension pot. This means £2,454.30 x 2.25, equals £5,522.18. So, the overall award on exit for our Staff Sergeant is a lump sum equal to (£27,227.85 + £5,522.18) £32,750.03 and a total pension/income stream until State Pension Age of (£9,075.95 + £855.32) £9,931.27.
At State Pension Age the EDP income stream stops and the proper pension becomes payable. Our Staff Sergeant has a choice of taking all the pension in income, so the total pension would increase to (£9,075.95 + £2,454.30) £11,530.25, or he can surrender (up to) 25% of the AFPS15 pension and buy another lump sum at this point. If he did that, then for every £1 of annual pension surrendered, a £12 lump sum is paid. Surrendering 25% of £2,454.30 (£613.57) would buy a lump sum of £7,362.84, and the pension at State Pension Age would only be (£9,075.95 + £1,840.71) £10,916.66.
There will remain the opportunity for our Staff Sergeant to opt for Commutation of his AFPS75 element of his pension too, but I’ll delve into that issue in a future article.
Further Information
If all the above seems incredibly complicated or if you have any questions about the new Armed Forces Pension, AFPS 15 or your own military pension, you can call the Forces Pension Society on 020 7820 9988 for a rapid and accurate answer, assuming of course you are a member of the Society. If you are not a member, the fee to join is modest and benefits include an expert helpline, numerous discounts on a range of useful products and services and the assurance that a dedicated organisation, independent of the Government, is championing the pension interests of the Forces and their families.
The Outline Scheme Design of the New Armed Forces Pension Scheme has finally been released, and with it has come the inevitable flood of enquiries as to exactly how its introduction will affect individuals...
Lieutenant Commander David Marsh, Pensions’ Secretary of the Forces Pension Society, looks at some of the Scheme’s important elements, and explains how these might impact on somebody on the AFPS75 pension scheme on the date of the new scheme’s inception...
Well, it has finally arrived – almost. There are still one or two details on the matter of the Early Departure Payment (EDP) system attached to the new scheme that need to be ironed out, but otherwise the package appears to be complete.
What of the scheme itself? The first thing that must be borne in mind is that the Ministry of Defence had little choice but to start planning the new scheme using a Career Averaging scheme structure. This was as a result of the study and subsequent recommendations to the Government by Lord Hutton’s report into the provision of pension schemes to the whole public sector.
The Civil Service already had its latest pension scheme based on a Career Averaging structure, but for the rest of the public sector, all, including the Armed Forces, were to move away from a Final Salary scheme.
The two types of scheme are quite different, and so exact comparison between them is not a simple exercise – and it is easy to find individuals who do better under one scheme or the other. In essence, the less successful you are in terms of promotion in your career, the more likely it is that a good Career Averaging scheme will be more advantageous to you than a Final Salary scheme; if you are a ‘high flyer’ then the opposite applies.
Having had the peace and quiet of a spot of leave to digest the document in full, along with the two DINs on accrued rights, I believe it is probably the best proposal out of all the public sector scheme choices in terms of a complete package. It is easy for the cynic to cherry-pick the worst of everything (that is what the press love to do to create sensational stories to sell newspapers), but in overall terms I am 100% sure that the scheme on offer is as good as the Armed Forces could have hoped for - and the biggest coup of all, was gaining the Treasury’s approval not to insist that members of the Armed Forces make personal contributions from salary towards their pension entitlement, at a time when all other members of the public sector were having the level of their direct contributions from salary increased!
Let’s now look at some of the most important elements of the proposed scheme and how it will operate in practice.
The accrual rate of 1/47th is very strong. What this means is that your annual pension award accumulates by 1/47th of your pensionable salary each year. For example if you were a Sergeant in receipt of a salary of £36,437, then your annual pension award would be £775.26 for that year’s service. If the same Sergeant received a salary of £37,412 for the following year, then the annual pension earned for that year would be £796.00.
The previous years’ earned pension will be revalued annually by an Average Earnings Index (AEI). There is more than one AEI, but it is understood the MoD will look to use the National AEI as the fairest index for the purpose of increasing the value of previous years’ earned pension. So, to take our Sergeant’s awards calculated in the previous paragraph, together with an assumption that the AEI was 2.6% for the first year, the first year’s award of £775.26 would grow to £795.42. It is the revalued figure of £795.42 that is then added to the £796.00 at the end of the second year, to give a new total value of annual pension award of £1,591.42.
To take the example one step further, if the Sergeant were subsequently promoted to Staff Sergeant three months into the next year, and received a salary of £38,237 for that year, and the AEI at the end of the second year was 3.1%, he would have earned a a further £813.55 (£38,237/47) towards his overall pension entitlement and his £1,591.42 would be revalued to £1,640.75 which, when added to the £813.55, gives the Staff Sergeant a new annual pension award of £2,454.30.
This may seem more complicated than the basic final salary schemes of AFPS75 and AFPS05, so how can an individual be expected to keep up with his or her pension entitlement. Well, apart from there being an online calculator available (it’s on its way), every serving individual will receive an annual statement of their current pension entitlement as a matter of course – something that you have been entitled to, but denied, for too long! This will remove the need to carry out these calculations yourself. That said, individuals should still be conversant with the processes carried out that lead to the forecast they receive.
To carry on with our Staff Sergeant’s career... Let’s assume that on the day of inception of the new scheme, he had completed 19 years’ reckonable service on the AFPS75 pension scheme, and will leave the Army after 22 years’ reckonable service on 6th April 2018. This means that there is going to be a split pension award on exit – some AFPS75 and some AFPS15. I will deal with the AFPS75 entitlement first.
Even though the Staff Sergeant will not have completed 22 years’ reckonable service on the date the new pension scheme started, he would, on his day of exit, have achieve that amount of service in total, albeit with 3 years of that service under the new pension scheme rules. Therefore, since 22 years’ service will be attained, he will receive an immediate pension and lump sum award on exit under the AFPS75 pension scheme rules.
The rules of AFPS75 state that an individual must complete at least 2 years’ reckonable service in the substantive rank in order to receive a full pension for that rank; if they complete at least 12 months’ reckonable service in the substantive rank, there will be a proportionate increase in the pension award based on the rates payable for each of the two ranks.
Unfortunately, as our Staff Sergeant did not complete 12 months’ reckonable service in the substantive rank, his AFPS75 pension award will be based on that of a Sergeant for the full 19 years.
The current annual pension award after 22 years’ service for a Sergeant is £10,509; therefore the award of a pension payable immediately on exit under AFPS75 would be 19/22nds of the £10,509 (£9,075.95) and a lump sum of 3 times that figure (£27,227.85).
What of the small pension earned under AFPS15? Assuming our Staff Sergeant is 41 on exit and has completed over 20 years’ service, his full pension becomes a deferred pension payable from State Retirement Pension Age. However, because he is aged 40 or over and has completed at least 20 years’ reckonable service, he qualifies to receive EDP payments.
The amount of EDP income stream payable is based on 34% of the pension earned plus 0.85% for each complete year beyond the EDP qualifying point. Our Staff Sergeant reached his EDP point at age 40 (he had completed 21 years’ reckonable service then), so given that he has completed one further year beyond his EDP qualifying point he will receive an EDP income stream of 34.85% of £2,454.30 (£855.32). Please note that you only need to hold the rank for one day and that one day’s salary in the higher rank is pensionable under the new AFPS15 scheme rules.
The amount of EDP lump sum is equal to 2.25 times the value of the pension pot. This means £2,454.30 x 2.25, equals £5,522.18. So, the overall award on exit for our Staff Sergeant is a lump sum equal to (£27,227.85 + £5,522.18) £32,750.03 and a total pension/income stream until State Pension Age of (£9,075.95 + £855.32) £9,931.27.
At State Pension Age the EDP income stream stops and the proper pension becomes payable. Our Staff Sergeant has a choice of taking all the pension in income, so the total pension would increase to (£9,075.95 + £2,454.30) £11,530.25, or he can surrender (up to) 25% of the AFPS15 pension and buy another lump sum at this point. If he did that, then for every £1 of annual pension surrendered, a £12 lump sum is paid. Surrendering 25% of £2,454.30 (£613.57) would buy a lump sum of £7,362.84, and the pension at State Pension Age would only be (£9,075.95 + £1,840.71) £10,916.66.
There will remain the opportunity for our Staff Sergeant to opt for Commutation of his AFPS75 element of his pension too, but I’ll delve into that issue in a future article.
Further Information
If all the above seems incredibly complicated or if you have any questions about the new Armed Forces Pension, AFPS 15 or your own military pension, you can call the Forces Pension Society on 020 7820 9988 for a rapid and accurate answer, assuming of course you are a member of the Society. If you are not a member, the fee to join is modest and benefits include an expert helpline, numerous discounts on a range of useful products and services and the assurance that a dedicated organisation, independent of the Government, is championing the pension interests of the Forces and their families.
Last edited by Lima Juliet; 22nd Oct 2012 at 19:39.
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So there we have it...
Read £10,509 on old pension scheme versus £9,931 on a combination of old and new scheme - £478 per year worse off. Not too bad, but significant over 30-40 years. It's also the first time I've seen it written that previous service to an option point qulaifies you for a proportion of the new scheme without serving 20years on it.
CPL Clott
The current annual pension award after 22 years’ service for a Sergeant is £10,509; therefore the award of a pension payable immediately on exit under AFPS75 would be 19/22nds of the £10,509 (£9,075.95) and a lump sum of 3 times that figure (£27,227.85).
The amount of EDP lump sum is equal to 2.25 times the value of the pension pot. This means £2,454.30 x 2.25, equals £5,522.18. So, the overall award on exit for our Staff Sergeant is a lump sum equal to (£27,227.85 + £5,522.18) £32,750.03 and a total pension/income stream until State Pension Age of (£9,075.95 + £855.32) £9,931.27
CPL Clott
Last edited by Corporal Clott; 22nd Oct 2012 at 19:48.
Wait a second.
That's got to be wrong. AFPS75 is based on final salary so surely if this man completes 2 years in rank (even after transfer to AFPS15) then the ENTIRE 19/20ths will be paid at SSgt rate and not, as is suggested here, as a Sgt.
The rules of AFPS75 state that an individual must complete at least 2 years’ reckonable service in the substantive rank in order to receive a full pension for that rank; if they complete at least 12 months’ reckonable service in the substantive rank, there will be a proportionate increase in the pension award based on the rates payable for each of the two ranks.
Unfortunately, as our Staff Sergeant did not complete 12 months’ reckonable service in the substantive rank, his AFPS75 pension award will be based on that of a Sergeant for the full 19 years.
Unfortunately, as our Staff Sergeant did not complete 12 months’ reckonable service in the substantive rank, his AFPS75 pension award will be based on that of a Sergeant for the full 19 years.
Last edited by Stuff; 22nd Oct 2012 at 21:42.
Agreed, I got my terms wrong but either way the text has to be wrong. If it's true then no matter what happens to our SSgt afterwards eg. promotion to WO, his pension will forever be 19/20th of a Sgt pension!
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Actuarially Reduced
Can anyone shed any light on what this actually means, ref retiring 'early' at 55? I looked at some Sunday rag annuity best buys, and the difference between 55 and 60 seemed to be about 12-15% less p.a. (for joint pension, index linked etc). Am I on the right lines?
I looked at the current RCAF scheme and, assuming you haven't served their full-pension-earning 25 years, they take off 5% per year that you leave before 60, down to a min age of 55; if you go before that, it's their equivalent of EDPs. ¼ less would be a bit harsh.
I dip out of the 10 year protection by 8 months, so this is all in anticipation of not being offered service to 60, from my current PAS piece of paper that says 55...
von K
I looked at the current RCAF scheme and, assuming you haven't served their full-pension-earning 25 years, they take off 5% per year that you leave before 60, down to a min age of 55; if you go before that, it's their equivalent of EDPs. ¼ less would be a bit harsh.
I dip out of the 10 year protection by 8 months, so this is all in anticipation of not being offered service to 60, from my current PAS piece of paper that says 55...
von K
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In the grand scheme of things, AFPS-15 is about as good as a public sector pension can get. Comparing a CARE scheme with a Final Salary scheme is like comparing apples and oranges; there will be losers and there will be winners.. more of the former I guess, although CARE schemes are great social levellers. It'll be interesting to see what the MoD does to maintain interest with the thrusters, who tend to lose out with career average schemes.
I think that the Forces Pensions Society did a great job batting for the troops; I think I'm right in saying that SP are the only public sector workers who don't make an active contribution to their occupational pension/retirements. I'm stupified that it is going to take until next year to get a calculator out. But now possibly, its up to the AFPRB to get stuck in, and quickly.
I was/am uncertain about the decision to use an average earnings index as a revaluation factor; but when you look at what the ONS wants to do to RPI, you have to wonder where the greatest threat to incomes (before and after retirement) is going to come from. All the clamour is on the detail, and in many ways, thats great from the Exchequer's perspective. But the elephant in the room, in my opinion, right now, is this.
Change to RPI is politically motivated - Echelon Wealthcare
The Exchequer can argue (relative) pounds and pence about the finer points until the cows come home, because its easy to engage and tangle over tangible issues like tax relief, annual allowances, contributions etc. But the technical aspects and potential impacts of the bigger picture stand to cause more problems but slip under the radar because they are harder to comprehend.
Everyone is different when it comes to working out the impact of AFPS-15. Get the basics right, if you're married use your partner's various (tax relief etc) allowances, make use of your own (ISA etc) allowances, have you done a self assesment and if not, will it be worth doing one(?), make sure your savings and investments are doing well and are suitable for you.. and know what, where, when and how you want retirement to look like. As soon as you've done that, you can start to reverse engineer and work out if what you're doing now is fine, and/or what you might have to do to get on track, if it isn't.
I think that the Forces Pensions Society did a great job batting for the troops; I think I'm right in saying that SP are the only public sector workers who don't make an active contribution to their occupational pension/retirements. I'm stupified that it is going to take until next year to get a calculator out. But now possibly, its up to the AFPRB to get stuck in, and quickly.
I was/am uncertain about the decision to use an average earnings index as a revaluation factor; but when you look at what the ONS wants to do to RPI, you have to wonder where the greatest threat to incomes (before and after retirement) is going to come from. All the clamour is on the detail, and in many ways, thats great from the Exchequer's perspective. But the elephant in the room, in my opinion, right now, is this.
Change to RPI is politically motivated - Echelon Wealthcare
The Exchequer can argue (relative) pounds and pence about the finer points until the cows come home, because its easy to engage and tangle over tangible issues like tax relief, annual allowances, contributions etc. But the technical aspects and potential impacts of the bigger picture stand to cause more problems but slip under the radar because they are harder to comprehend.
Everyone is different when it comes to working out the impact of AFPS-15. Get the basics right, if you're married use your partner's various (tax relief etc) allowances, make use of your own (ISA etc) allowances, have you done a self assesment and if not, will it be worth doing one(?), make sure your savings and investments are doing well and are suitable for you.. and know what, where, when and how you want retirement to look like. As soon as you've done that, you can start to reverse engineer and work out if what you're doing now is fine, and/or what you might have to do to get on track, if it isn't.