AFPS 75 and NEM
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
Junket,
I can see that number rising if the 60 rule is applied. Why spend a few more years in civvy street at aged 55, in uncertainty and competing with change and alien market forces, when you can continue in an environment that you know and are already happy with, and in an occupational pension scheme that will typically benefit those who have already reached maximum achievement at the top of a career income ladder? For those people, AFPS15 could be the farewell icing on a career cake.
I can see that number rising if the 60 rule is applied. Why spend a few more years in civvy street at aged 55, in uncertainty and competing with change and alien market forces, when you can continue in an environment that you know and are already happy with, and in an occupational pension scheme that will typically benefit those who have already reached maximum achievement at the top of a career income ladder? For those people, AFPS15 could be the farewell icing on a career cake.
Thread Starter
All in all, the changes to the pension have not been well communicated and are confusing, to say the least. Because AFPS 15 has been conflated with NEM, this has muddied the waters even more.
I would like to regard myself as reasonably well educated and again, reasonably savvy on financial matters, but it has taken a lot of letters and now appeals to the interweb to make sense of it all. I am aware of at least one SP who has lodged a Service Complaint at the poor service from SPVA and confusing messages that have been published (and I cite the interview with the Air Sec given in the RAF News in February, where he is (helpfully) quoted as saying that
Like c 25 - 30% of the RAF, I am outside the Light Blue environment and similarly, like many others, not on DIIF so struggle to find the information that should be made available to all. Apparently SPVA direct enquiries to a clip on YouTube...
I would like to regard myself as reasonably well educated and again, reasonably savvy on financial matters, but it has taken a lot of letters and now appeals to the interweb to make sense of it all. I am aware of at least one SP who has lodged a Service Complaint at the poor service from SPVA and confusing messages that have been published (and I cite the interview with the Air Sec given in the RAF News in February, where he is (helpfully) quoted as saying that
...people will still be able to draw whatever pension they earn at age 55, although it will be reduced to reflect the fact that it is being drawn under the new scheme's Normal Pension Age.
Helpful? Correct? Qualified?Like c 25 - 30% of the RAF, I am outside the Light Blue environment and similarly, like many others, not on DIIF so struggle to find the information that should be made available to all. Apparently SPVA direct enquiries to a clip on YouTube...
Last edited by Whenurhappy; 24th Apr 2013 at 06:04.
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
It is worth remembering that from April 2009, a former spouse or civil partner who is the beneficial subject of a pension sharing order (PSO) can take AFPS benefits at aged 55 and not 60, but will also experience the same form of actuarial reduction.
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
Assuming your AFPS 'pot' was worth £200k, and that the court determined that 100% should be split equally between you and your former spouse/partner; although you might be able to start taking benefits from your £100k at 55, your former partner has to wait until aged 65. Although they were also given £100k worth of pension credit rights in the scheme, if they wanted to take those benefits at 55, there would be a reduction in their annual pension.
Department for Work and Pensions introduced legislation in 2009 to allow former spouses/partners to take reduced benefits at 55, but the guidance was interpreted wrongly by SPVA who believed that their pensions could be payable from age 55 without any actuarial reduction. This resulted in over 100 cases where former spouses/partners were paid a pension that was too big and which was originally the subject of mass reclaim action. However, after a bit of a tussle, the attempts to recover the money were dismissed (I can't remember the name of the MP who fought for that one).
The changes in 2009 were made because of this;
The Army divorcee and a pension battle that could cost the MoDmillions | Mail Online
(written as I watch The Good Wife!)
Department for Work and Pensions introduced legislation in 2009 to allow former spouses/partners to take reduced benefits at 55, but the guidance was interpreted wrongly by SPVA who believed that their pensions could be payable from age 55 without any actuarial reduction. This resulted in over 100 cases where former spouses/partners were paid a pension that was too big and which was originally the subject of mass reclaim action. However, after a bit of a tussle, the attempts to recover the money were dismissed (I can't remember the name of the MP who fought for that one).
The changes in 2009 were made because of this;
The Army divorcee and a pension battle that could cost the MoDmillions | Mail Online
(written as I watch The Good Wife!)
There seems to be quite a bit more on NEM released to the senior wheels this week, with briefings to come this summer for the masses.
Not seen it in print but from the well-placed rumours I am not sure how it will work for the aircrew cadre, even with the tweaks that separate it from the ground branch NEM. We seem to be inventing a system to cure a problem the RAF does not have.
In my small world we are struggling to retain people to their pension points yet the major changes seem targeted to ensure that very few actually make it to that point.
Appart from 'Joint' becoming a four letter word anybody know why we intend to introduce a mini up-or-out system for aircrew when we crave experience and long retention periods with relatively low churn / IPS to save on trg costs?
Not seen it in print but from the well-placed rumours I am not sure how it will work for the aircrew cadre, even with the tweaks that separate it from the ground branch NEM. We seem to be inventing a system to cure a problem the RAF does not have.
In my small world we are struggling to retain people to their pension points yet the major changes seem targeted to ensure that very few actually make it to that point.
Appart from 'Joint' becoming a four letter word anybody know why we intend to introduce a mini up-or-out system for aircrew when we crave experience and long retention periods with relatively low churn / IPS to save on trg costs?
PA terms seem to have survived but with talk of some of 'retention pay' being absorbed into the core 'plus' salary the difference between career spine and PAS is not as great. What is not clear is if the spine will take you through to final pension or see a forced exit under LOS30 as will happen to CS sqn ldrs.
Thread Starter
Last September it was announced that the NEM proposals would go out for 'consultation' in March. Has anyone seen anything? (I'm in the blissful non-DII world). Part of the problem, I believe, is the lack of SQEP to work through the proposals and turn them into regulations and procedures. The proposal, for example, to offer assistance to get on the housing ladder is a great idea, but as identified by the Treasury way back in 2006, if you take a bite of the cake for housing, that's it - no more access to subsidised housing inside the wire - SFA or SLA and its derivatives. any use of subsidised accn at this point would be at the commercial rate. This, potentially poses enormous problems on posting, courses, short term attachments, overseas tours...
As I have posted somewhere here before, in 2006 DASA did some very interesting modelling on the affordability of housing around our post 2013 footprint. Basically, a lot of younger and/or lower rank personnel would have very long commutes, resulting in a measurable increase in fatalities through RTAs - and, sadly, there are very 'good' statistics that plot commuting distance against frequency of RTAs.
As I have posted somewhere here before, in 2006 DASA did some very interesting modelling on the affordability of housing around our post 2013 footprint. Basically, a lot of younger and/or lower rank personnel would have very long commutes, resulting in a measurable increase in fatalities through RTAs - and, sadly, there are very 'good' statistics that plot commuting distance against frequency of RTAs.
Last edited by Whenurhappy; 4th May 2013 at 06:54.
Join Date: Feb 2012
Location: Band Camp
Posts: 18
Likes: 0
Received 0 Likes
on
0 Posts
Whenurhappy,
If you do not have DII access try the Airspace website that is part of the RAF Community site as all relevant pensions announcements have been published there. Once on the site check under Horizons - Your Money - Your Pension and then use the link to the A1 Specialist Support Pensions page which mirrors that on the equivalent DII page on the RAF intranet site.
Reverend 71
If you do not have DII access try the Airspace website that is part of the RAF Community site as all relevant pensions announcements have been published there. Once on the site check under Horizons - Your Money - Your Pension and then use the link to the A1 Specialist Support Pensions page which mirrors that on the equivalent DII page on the RAF intranet site.
Reverend 71
From what I heard the charges for SLA/SFA will be linked to the 'Tier' you are on.
The first 2 Tiers take you to the IPP/EDP and the 3rd Tier will take you through to final pension point. Early promotion can take you to a higher tier earlier than the rough blocks above. So during the early part of your career when you have less money and less stability the charges will be relatively low, but by the later part of a career with (allegedly) more stability the charges will be quite punitive to push people towards home ownership and off the patch.
I would guess that the advance of pay for a home purchase would push you into Tier 3 charges should you subsequently move back on to the patch.
The first 2 Tiers take you to the IPP/EDP and the 3rd Tier will take you through to final pension point. Early promotion can take you to a higher tier earlier than the rough blocks above. So during the early part of your career when you have less money and less stability the charges will be relatively low, but by the later part of a career with (allegedly) more stability the charges will be quite punitive to push people towards home ownership and off the patch.
I would guess that the advance of pay for a home purchase would push you into Tier 3 charges should you subsequently move back on to the patch.
Thread Starter
Rev. - thanks for this. I'll try to get some more clarity there. Certainly, Manning staff weren't able to answer questions raised with my first posting; SPVA were spectacularly unhelpful to a colleague (see earlier reference to YouTube...)
The proposal, for example, to offer assistance to get on the housing ladder is a great idea, but as identified by the Treasury way back in 2006, if you take a bite of the cake for housing, that's it - no more access to subsidised housing inside the wire - SFA or SLA and its derivatives. any use of subsidised accn at this point would be at the commercial rate. This, potentially poses enormous problems on posting, courses, short term attachments, overseas tours...
The only problem being that any assistance would be a one time only offer and available only to those who have yet to get a foot on the property ladder. If you choose to buy in a location but then end up being posted to the other side of the country, you will either be expected to sell your house and move or become a weekly commuter. Additionally, if you have already bought your own place when any scheme comes in to force, to paraphrase the AM, well thankyou very much - you've done us proud, but there's no help for you.
So whilst I applaud any assistance for getting onto the property ladder, I can see this being littered with pot holes and poo-traps. What they are trying to do is incredibly complicated and effectively amounts to an attempt to synch NEM with AFPS15 and housing and Treasury regulations. I think there is going to be quite a bit of grumbling, especially amongst those who have already taken the plunge off their own bat and are then posted away from home.
Any chance the treasury will raise the threshold for LSAP prior to taxation. The amount currently offered is peanuts compared to your average 3 bed semi in the south.
Join Date: Mar 2002
Location: Several miles SSW of Watford Gap
Posts: 596
Likes: 0
Received 0 Likes
on
0 Posts
So during the early part of your career when you have less money and less stability the charges will be relatively low, but by the later part of a career with (allegedly) more stability the charges will be quite punitive to push people towards home ownership and off the patch.
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
And with that in mind.. is the effect of volatility on a spouse's or partner's career also measured? The impact of a partner chipping in for the collective financial long haul will be more pronounced within service families seeking stability and less lofty rank aspirations. Can NEM also reflect and compensate for one person working harder for one meaningful income (instead of two good ones?) and a better single pension you'll pay more tax on? It isnt what you make, its what you keep.
Join Date: Jul 2007
Location: Germany
Posts: 1
Likes: 0
Received 0 Likes
on
0 Posts
Not to mention the effect of any future means testing of the state pension. Which if they work out the same as they have child benefit, will make earning a higher salary completely pointless for your retirement.
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
I'm glad that we now have a state pension that lifts most people above means-testing for the actual benefit and basing the weekly amount on NIC. But IDS is now suggesting (for that, read setting the scene) that the next generation of pensioners shouldn’t automatically assume the right to free bus passes, TV licences and help with heating bills.
Call me Dave told pensioners before the last election that the extra benefits were all ‘safe’; in fact, he actually said - ‘You can read my lips, that is a promise from my heart’. But IDS claims it was only an assurance that was valid until 2015.
If you want to be objective, you have to ask; should we exclude pensioners from the rigours of the recession or should we spread the pain a little? The hawks argue that baby boomers have benefited over the past 40 years and that the extra money has to come from somewhere. The state has removed the indignity of impoverished OAPs trying to scrape together a meagre income but the cost of that has been to the detriment of those who have accrued a decent NIC record.
But as a result of the new system, we'll have a first and second class state pension system, for sure. I’m not sure that that we should confuse that with, or be entirely pessimistic about saving elsewhere and in other ways for a state retirement income though.
Call me Dave told pensioners before the last election that the extra benefits were all ‘safe’; in fact, he actually said - ‘You can read my lips, that is a promise from my heart’. But IDS claims it was only an assurance that was valid until 2015.
If you want to be objective, you have to ask; should we exclude pensioners from the rigours of the recession or should we spread the pain a little? The hawks argue that baby boomers have benefited over the past 40 years and that the extra money has to come from somewhere. The state has removed the indignity of impoverished OAPs trying to scrape together a meagre income but the cost of that has been to the detriment of those who have accrued a decent NIC record.
But as a result of the new system, we'll have a first and second class state pension system, for sure. I’m not sure that that we should confuse that with, or be entirely pessimistic about saving elsewhere and in other ways for a state retirement income though.