Military Pension - Forced Redundancy Days Before Entitlement
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...to add my tuppenth to Chainkicker and SilsoeSid's pension debate.
I am sure that when the AFPRB started to declare that military pay was abated to fund the pension scheme, around 1991ish, then it was ruled that the pension scheme was de-facto contributory. Therefore, making it illegal to deprive anybody being dis-honourably discharged of their pension since they had effectively contributed to it albeit not directly.
Perhaps somebody more in the know (Al R?) could confirm this.
I am sure that when the AFPRB started to declare that military pay was abated to fund the pension scheme, around 1991ish, then it was ruled that the pension scheme was de-facto contributory. Therefore, making it illegal to deprive anybody being dis-honourably discharged of their pension since they had effectively contributed to it albeit not directly.
Perhaps somebody more in the know (Al R?) could confirm this.
This whole business of salary abatement is all well and good for those of us who receive a pension, but it is grossly unfair on those on short engagements who are never going to receive a pension. In effect they are being paid less than the job is deemed to be worth, the difference going into some notional pension pot for those who will receive one.
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TankerTrashNav........agreed, although those on shorter engagements will eventually get something even if it is 12/37ths at age 55...65? Its those who don't make 12 years or are under pension age that suffer.
I joined at 16 as one of Trenhard's finest, commissioned in my late 20s so my pension start point is 21, thus losing 5 years of 'contributions'. I seem to recall that my pay increased at 17.5yrs old and again at 18yrs old which could have been down to pension pay abatement. Admittedly, I could have got 3 years 'contributions' back by transferring to AFPS05 but didn't. Don't misunderstand me, I am very happy with my AFPS75 pension, especially on top of my salary!
I joined at 16 as one of Trenhard's finest, commissioned in my late 20s so my pension start point is 21, thus losing 5 years of 'contributions'. I seem to recall that my pay increased at 17.5yrs old and again at 18yrs old which could have been down to pension pay abatement. Admittedly, I could have got 3 years 'contributions' back by transferring to AFPS05 but didn't. Don't misunderstand me, I am very happy with my AFPS75 pension, especially on top of my salary!
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Very pleased at the outcome and very disappointed that some on here have missed the point.
It's not about where you the draw the line and winners/losers (the tough sh1t approach). It's about natural justice, common sense and the team looking after the team.
And it's not just an economic debate. If you individually shaft people the well of goodwill that the military depends of for getting more bang for the buck WILL run dry.
As for the argument about pension contributions...jeez give it up.
Grammatically it's non-contributory. So you semantics with an agenda can consider yourself correct. In actuality it is contributory thru' salary abatement, so we in the know are correct as well. /argument.
PS
Incidentally, quite a staggering response...I think that is a really big win for all of us, serving and retired. Quite an "in-your-face" message for the old politicos re service pensions don't you think? One that might linger for a while.
It's not about where you the draw the line and winners/losers (the tough sh1t approach). It's about natural justice, common sense and the team looking after the team.
And it's not just an economic debate. If you individually shaft people the well of goodwill that the military depends of for getting more bang for the buck WILL run dry.
As for the argument about pension contributions...jeez give it up.
Grammatically it's non-contributory. So you semantics with an agenda can consider yourself correct. In actuality it is contributory thru' salary abatement, so we in the know are correct as well. /argument.
PS
Incidentally, quite a staggering response...I think that is a really big win for all of us, serving and retired. Quite an "in-your-face" message for the old politicos re service pensions don't you think? One that might linger for a while.
TOFO - Sorry, but this is PPRuNe - thread drift rules - ok?
(BTW what's this word " thru' " ? )
Once a brat - yes it's the very short term people I'm thinking about - not sure about now but there used to be a lot of very short engagements - people signing on for five years with no pension entitlement whatsoever but receiving the abated salary nevertheless. I'm one of those you quote - ended up with 9/16 of the flight lieutenant's pension which I would have got if I had stayed until my 38/16 point. Quite happy with that.
(BTW what's this word " thru' " ? )
Once a brat - yes it's the very short term people I'm thinking about - not sure about now but there used to be a lot of very short engagements - people signing on for five years with no pension entitlement whatsoever but receiving the abated salary nevertheless. I'm one of those you quote - ended up with 9/16 of the flight lieutenant's pension which I would have got if I had stayed until my 38/16 point. Quite happy with that.
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TTN. Unfortunately, I think that is where the modern military is heading, get 'em in young, burn 'em out fast and then discharge after 5-6 years servive. Only retain a few 'lifers' and thus massively reduce the pension 'burden'.
Military Covenant anybody? anybody? anybody................
Which nicely brings this thread creep back on track, eh TOFO!
Military Covenant anybody? anybody? anybody................
Which nicely brings this thread creep back on track, eh TOFO!
Last edited by Once A Brat; 8th Nov 2013 at 16:27. Reason: Spelling!
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The military pension is different because it is also a form of compensation for an unavoidably early termination of a professional career. In many ways, footballers, ballet dancers and North Sea divers have had similar breaks. The 'Inevitably we have to draw the line somewhere' line is bilge. It is bilge in principle and it is bilge in practice. By way of evidence that flexibility and tapering may be embraced as and when appropriate, when it suits, the new MPs pension scheme refers;
In respect of maintaining accrued benefits in keeping with the much vaunted 'line in the sand', this is what those same MPs were able to negotiate for themselves;
What about those servicemen who are 'less able to change their plans'? This is not an outrage bus, and although the principle of unfairness might not be as relevant in Sgt Anderson's case, it still applies to scores of others.
Accrued pensions in respect of service up to 6 May 2010 may be paid from age 60 where service up to 6 May 2010 exceeds 20 years, and from an age between 60 and 65 where service up to 6 May 2010 is between 20 and 15 years.
Should there be transitional protection for MPs relatively close to retirement?
In the reformed public service pension schemes, members who were within 10 years of normal pension age on 1 April 2012 will stay in the existing scheme until they retire. They will also retain their current normal pension age, although they will also pay the increased contributions for their salary level. Members between 10 and 13.5 years of retirement are able to choose to stay within the existing scheme for a period. Younger members will move to the new scheme as soon as it is introduced. This protection strives to be fair to members who are close to their expected retirement age and are less able to change their plans than younger members. MPs aged between 51.5 and 55 years will be able to choose to benefit from protection for a short period.
In the reformed public service pension schemes, members who were within 10 years of normal pension age on 1 April 2012 will stay in the existing scheme until they retire. They will also retain their current normal pension age, although they will also pay the increased contributions for their salary level. Members between 10 and 13.5 years of retirement are able to choose to stay within the existing scheme for a period. Younger members will move to the new scheme as soon as it is introduced. This protection strives to be fair to members who are close to their expected retirement age and are less able to change their plans than younger members. MPs aged between 51.5 and 55 years will be able to choose to benefit from protection for a short period.
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Yet another petition on pensions
Update on the petition for Sgt Anderson. The government suddenly got interested and managed to sort out his request to transfer to another corps in the Army. He will not now be made redundant in Tranche 3 (no guarantee for tranche 4 though... but at least he will be over the immediate pension line).
The petition was also meant to highlight the plight of all those made redundant just short of their immediate pension. As Sgt Anderson's situation has been resolved the others affected have had to set up a new petition here. All those affected would appreciate it if you would take a moment to sign the new petition and spread the word far and wide.
It has been frustratingly difficult to get any information out of either the MOD or government on the situation. The Army Redundancy Cell refused to answer questions and direct us to the Freedom of Information (FOI) Request route. When FOIs were submitted the responses were slow and often refused due to cost and time implications.
The Minister for Armed Forces finally admitted in the House of Commons that for the sake of 1 day of service the difference in pension and redundancy remuneration is £100,000 (for those financiers this was at discounted present capital values and after 40% tax rate). The hansard link is here.
For those interested in the new pension and abatement/adjustment of salary. There is a document available 20131001A_FAQs_V9_U.pdf which briefs the military community that "Nothing is actually deducted from military pay (no 'abatement' or 'adjustment' is made) but the relative value is included as part of the pay comparability considerations." If the pensions value is taken into consideration in pay comparability then it does affect the amount of money those in the military receive into their bank accounts. It is merely semantics arguing otherwise.
The same document also informs people why those with less than 10 years to their normal retirement age will not have to move onto the 2015 pension scheme. This is because they will have less time to adjust their financial plans to reflect the changes to their pension schemes.... So where was the same consideration when making people redundant days before qualifying for their immediate pension.
The standard argument wheeled out by the government to defend the situation is, there had to be a line. This isn't quite correct, if the redundancy package had been set up fairly there wouldn't be a point in a persons length of service that created such a difference in the financial package. There would be a line for whether you were redundant or not but there wouldn't have been the financial cliff edge around the immediate pension point.
Rant ends...
The petition was also meant to highlight the plight of all those made redundant just short of their immediate pension. As Sgt Anderson's situation has been resolved the others affected have had to set up a new petition here. All those affected would appreciate it if you would take a moment to sign the new petition and spread the word far and wide.
It has been frustratingly difficult to get any information out of either the MOD or government on the situation. The Army Redundancy Cell refused to answer questions and direct us to the Freedom of Information (FOI) Request route. When FOIs were submitted the responses were slow and often refused due to cost and time implications.
The Minister for Armed Forces finally admitted in the House of Commons that for the sake of 1 day of service the difference in pension and redundancy remuneration is £100,000 (for those financiers this was at discounted present capital values and after 40% tax rate). The hansard link is here.
For those interested in the new pension and abatement/adjustment of salary. There is a document available 20131001A_FAQs_V9_U.pdf which briefs the military community that "Nothing is actually deducted from military pay (no 'abatement' or 'adjustment' is made) but the relative value is included as part of the pay comparability considerations." If the pensions value is taken into consideration in pay comparability then it does affect the amount of money those in the military receive into their bank accounts. It is merely semantics arguing otherwise.
The same document also informs people why those with less than 10 years to their normal retirement age will not have to move onto the 2015 pension scheme. This is because they will have less time to adjust their financial plans to reflect the changes to their pension schemes.... So where was the same consideration when making people redundant days before qualifying for their immediate pension.
The standard argument wheeled out by the government to defend the situation is, there had to be a line. This isn't quite correct, if the redundancy package had been set up fairly there wouldn't be a point in a persons length of service that created such a difference in the financial package. There would be a line for whether you were redundant or not but there wouldn't have been the financial cliff edge around the immediate pension point.
Rant ends...
Last edited by Yorkie666; 22nd Jan 2014 at 16:47.
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I fear it is a lesson buried. This issue was raised after people were affected in Trance 1. A Sgt was 3 days short of his IPP. More were affected in Trances 2 and 3. If no one is affected in Trance 4 I suggest this will be a fluke rather than design. To date no one in Government, the MOD or the Chain of Command has acknowledged this as an issue that needs attention. For me the worst part has been the defence of this situation by senior officers. People who know the significance of the IP.
