AFPS 75 and NEM
Surely those on PA Spine will get 1/47th of their career average per year like everyone else?
I know PAS is not as attractive as the original 'gp capt on appointment plus the AFPS05 win' that some achieved, but it should be ok on FAFPS - as long as you can stick it to at least 55.
I know PAS is not as attractive as the original 'gp capt on appointment plus the AFPS05 win' that some achieved, but it should be ok on FAFPS - as long as you can stick it to at least 55.
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I think there may be some confusion with regards to dates on this thread and what happens when. My understanding having read the relevant leaflets is this;
Anyone aged over 45 on 1 Apr 12 will remain on their current pension scheme (75 or 05) until they retire, their benefits are unchanged. Everyone else will automatically transfer onto the new scheme on 1 Apr 15 (current planned introduction date) and pension rights accrued on their old scheme up to that date remain payable when you retire.
Anyone aged over 45 on 1 Apr 12 will remain on their current pension scheme (75 or 05) until they retire, their benefits are unchanged. Everyone else will automatically transfer onto the new scheme on 1 Apr 15 (current planned introduction date) and pension rights accrued on their old scheme up to that date remain payable when you retire.
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2012DIN01-063: Pension rights accrued under AFPS 1975 and AFPS 2005
This document explains, with examples, how the transition will work.
From 1 April 2015 you will be accruing the new pension scheme.
Having been on 75 or 05 you will still retire on the same benefits of that old scheme i.e. you would retire with the appropriate tax free lump sum plus pension based on rank (rank on retirement, NOT ON 1 APRIL 15). If you leave before age 55 you would receive an Immediate pension at Immediate Pension rate fixed until age 55. At age 55 the pension increased at an actuarially adjusted rate (based on CPI).
On top of this you will also receive the new pension - built from 1 April 2015 to the point of retirement - but from age 60.
This document explains, with examples, how the transition will work.
From 1 April 2015 you will be accruing the new pension scheme.
Having been on 75 or 05 you will still retire on the same benefits of that old scheme i.e. you would retire with the appropriate tax free lump sum plus pension based on rank (rank on retirement, NOT ON 1 APRIL 15). If you leave before age 55 you would receive an Immediate pension at Immediate Pension rate fixed until age 55. At age 55 the pension increased at an actuarially adjusted rate (based on CPI).
On top of this you will also receive the new pension - built from 1 April 2015 to the point of retirement - but from age 60.
Last edited by Justanopinion; 21st Apr 2013 at 18:28.
Why can't I have 7 years on my existing extant pension before having to change to FAFPS? It all seems a bit unfair...
...oh, hang on, I remember now, life is like that...
...oh, hang on, I remember now, life is like that...
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Huey
No - FAFPS payments can be actuarially adjusted to start at 55 (ie you get less).
Alternatively there are strong hints that NEM will allow (force?) some (all on full service?) to serve until 60, but we won't know until it is announced.
No - FAFPS payments can be actuarially adjusted to start at 55 (ie you get less).
Alternatively there are strong hints that NEM will allow (force?) some (all on full service?) to serve until 60, but we won't know until it is announced.
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We know about payment being "actuarily adjusted" but can anyone tell us just what that means? Unless I've missed it, it's not explained in any DIN despite being the answer to the major question on the minds of those looking to extend - just how much pension will I receive at 55?
Is it a product of future CPIs and thus incalculable or can we figure it out somehow?
Is it a product of future CPIs and thus incalculable or can we figure it out somehow?
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Hueymeister- Yes, you will have to wait till 60 to recieve the pension benefits built from 1 April 2015, however, from age 55 you will recieve pension from AFPS 75/05.
Please see this example from 2012DIN01-063: Pension rights accrued under AFPS 1975 and AFPS 2005 (google it, it's the first document you come to and explains it well)
So, as per the last paragraph, this individual will take home whatever 24 years worth of the new scheme is, but from age 60. This is in addition to the pension he/she will have been taking from age 55 (based on the 10 years served on the old scheme prior to 1 April 2015).
Please see this example from 2012DIN01-063: Pension rights accrued under AFPS 1975 and AFPS 2005 (google it, it's the first document you come to and explains it well)
Example 8 – Full Career Pension – Service person promoted
An OF-3 (Lt Cdr, Maj, Sqn Ldr) has 10 years of service at the point of scheme transition. At some point beyond this point he is promoted to OF-4 (Cdr, Lt Col, Wg Cdr). He leaves the Armed Forces after 34 years of pensionable service at age 55.
He will begin to accrue pension benefits under the terms of the Future AFPS from the date of transition.
He will be entitled to receive, as his accrued AFPS 75 rights, both a taxable Immediate Pension of around £13,800 per annum and a tax free lump sum of around £41,400 at the point of leaving the Armed Forces. This will be based on the final rank he achieves, OF-4 (Cdr, Lt Col, Wg Cdr).
His pension will be increased annually by the Consumer Prices Index.
In addition, the OF-4 will be entitled to pension benefits for the 24 years of pensionable service under the Future AFPS in accordance with the rules of that scheme. The rules of the new scheme, including when pensions will be paid, are under development.
An OF-3 (Lt Cdr, Maj, Sqn Ldr) has 10 years of service at the point of scheme transition. At some point beyond this point he is promoted to OF-4 (Cdr, Lt Col, Wg Cdr). He leaves the Armed Forces after 34 years of pensionable service at age 55.
He will begin to accrue pension benefits under the terms of the Future AFPS from the date of transition.
He will be entitled to receive, as his accrued AFPS 75 rights, both a taxable Immediate Pension of around £13,800 per annum and a tax free lump sum of around £41,400 at the point of leaving the Armed Forces. This will be based on the final rank he achieves, OF-4 (Cdr, Lt Col, Wg Cdr).
His pension will be increased annually by the Consumer Prices Index.
In addition, the OF-4 will be entitled to pension benefits for the 24 years of pensionable service under the Future AFPS in accordance with the rules of that scheme. The rules of the new scheme, including when pensions will be paid, are under development.
Last edited by Justanopinion; 23rd Apr 2013 at 00:27.
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Ginsters,
Assuming you were preordained to live until aged 80 and your annual AFPS pension is £10,000 at aged 60.
If you wanted to bring that 10k forward to aged 55, the state won't pay you an extra £50,000 (£10,000 over 25 instead of 20 years). So, it makes a reduction in your annual payment to reflect that. The people who determine the theory behind the reduction are actuaries and work in the Government Actuarial Department.
These are the same people who also work out how much you can draw each year from a personal pension (referred to as 'GAD rates') if you don't wish to annuitise your 'pot' immediately. GAD rates don't apply if you wish to 'plunder' your pot as quickly as possible for any number of reasons and are able to go into for instance, flexible (and not capped) drawdown.
There are downsides to doing that, and GAD rates are not etched in stone; there are dozens of types of risks which apply; anything from political risk to investment risk.
Public sector pension schemes
Income Drawdown
RPSM09103590 - Technical Pages: Member benefits: Drawdown pension: Flexible drawdown
Happy St George's Day everyone!
Assuming you were preordained to live until aged 80 and your annual AFPS pension is £10,000 at aged 60.
If you wanted to bring that 10k forward to aged 55, the state won't pay you an extra £50,000 (£10,000 over 25 instead of 20 years). So, it makes a reduction in your annual payment to reflect that. The people who determine the theory behind the reduction are actuaries and work in the Government Actuarial Department.
These are the same people who also work out how much you can draw each year from a personal pension (referred to as 'GAD rates') if you don't wish to annuitise your 'pot' immediately. GAD rates don't apply if you wish to 'plunder' your pot as quickly as possible for any number of reasons and are able to go into for instance, flexible (and not capped) drawdown.
There are downsides to doing that, and GAD rates are not etched in stone; there are dozens of types of risks which apply; anything from political risk to investment risk.
Public sector pension schemes
Income Drawdown
RPSM09103590 - Technical Pages: Member benefits: Drawdown pension: Flexible drawdown
Happy St George's Day everyone!
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Anyone still concerned could always leave and get a real job - whilst drawing their hard won military pension (assuming it's the '75 version) on top of any wage packet.