AFPS15 - government decision.

[Common_Sense]

So for those of us that joined on 75 and retired on 15, what sort of timescales should we be expected to be fairly compensated?

Surely the calculations for those that were negatively impacted over a relatively small timescale window is straightforward? (Effectively give them back their 75 pension benefits and say sorry?)

[gipsymagpie]

Faster some searching I found it.....

Schemes will implement the processes and systems needed to offer a deferred choice for the majority of members by 2023, however, some individuals who have a particular need, for example, who has retired since 2015 with an ill-health pension will have their benefits amended sooner.

[3 bladed beast]

Thought I'd bring this back up.... has anyone seen any factual development or calculator to work this out!?

Thanks

[Bob Viking]

Good news

I’m glad they’re taking their time to produce something so vital. It’s not like there are thousands of government employees waiting on it or anything.

At least they’ve sorted out the female hair policy and re-written the beard rules though.

We’ve also managed to re-state our diversity targets for the umpteenth time.

BV

(Slightly grumpy as I complete my third quarantine period this year!).

[gipsymagpie]

Can I suggest a look through of this published at the end of July by the RAF?

https://www.raf.mod.uk/serving-famil...dgment-update/

A line that jumped out at me was this:
​​​​​​

All policy legislation and process must be implemented by October 23.

Basically they have set themselves a very lazy target (over 2 years away) to have the solution in place. I have zero hope they will finish the task early. Which is going to mean huge back payments are going to be due to some people who may have over 5 years of underpayment by that point. Christmas 2023 is going to be epic.

[Just This Once...]

I can only presume that whatever compulsory interest rate has been awarded is not onerous enough to prompt rapid resolution and has only encouraged the 'slow walk'.

It is for a period from 2015 to potentially 2022. It took around 3 years of legal debate for the courts to rule (2018) on a period that would end under 4 years later (2022). We will have spent more years waiting for the resolution than it took the courts to rule against the scheme in question.

I cannot accept that "Delivering this remedy will take time as legislation must be passed, policies need to be developed and complex IT changes are required" . Too many years have elapsed for the MoD to claim 'surprise' at the changes needed given the work completed by HMT ahead of the legal proceedings. These changes should have been scoped and implemented along the way, not kicked down the road.

[Party Animal]

So let me get this right....

I can use the Pension Calculator from the end of October 21 to work out reasonably accurately (one hopes) what is the best deal for me to be on should I choose to leave next year.

However, there is no guarantee that I would get the best deal until the legislation is resolved after October 23!!

It could be like getting the Retention Bonus all over again for Christmas 23.

[Lima Juliet]

Originally Posted by Party Animal

So let me get this right....

I can use the Pension Calculator from the end of October 21 to work out reasonably accurately (one hopes) what is the best deal for me to be on should I choose to leave next year.

However, there is no guarantee that I would get the best deal until the legislation is resolved after October 23!!

It could be like getting the Retention Bonus all over again for Christmas 23.

I think you have got this wrong…

You can leave whenever you like and get the payout that you are entitled to. The date of Oct 23 is to get everything in place, including future legislation, pension calculators, changes to JPA, QRs/JSPs/APs amended (some of which secondary legislation) and other triv. The main McCloud process means that towards the end of your career, for the 7 year ‘remedy period’ (1 Apr 15 – 31 Mar 22 or your retirement date if earlier) you will be able to choose between the pension benefits offered by your legacy (AFPS 75 or 05) scheme or the reformed (AFPS 15) scheme - that will not need any change as all three bits of pension legislation exist to enact that. I would expect to see pay outs well before Oct 23 for many as for some it will be simple switch to the 2022 AFPS75 Pension Codes when they are released.

Interestingly enough, I have still done my own calculations and at age 60, my planned retirement age, I will still be better off on AFPS75/15 than I would be on plain old AFPS75 - to the tune of about £9.5K per year for the rest of my life. The reason being that my Career Average on transfer in 2015 is way higher than normal and also that it accrues way faster than AFPS75 on its own (also on AFPS75 I can only claim 34 of my 38 years served). That is why the calculator is key here and I suspect that a whole bunch of us will be pleasantly surprised

[Party Animal]

I hope you’re right LJ - just some of the messaging is confusing. I’m one of those in the 55-60 bracket currently only on AFPS75, which meant none of my pay from age 55 was pensionable. The McCloud deal is a no brainier to take the AFPS15 option for the 7 year window and it will add significantly to my final amount.

The point about the confused messaging comes from a mate about to leave in the next 6 months. He (allegedly) has been told that he will be on his original deal only until the legislation has been sorted. Ultimately, he will get pension back pay in his favour but the timescale is totally unknown at this time? Presume the priority is for those already receiving pensions before they get around to those about to leave?

Regardless, good to have a date for the pension calculator update and many of us will look forward to playing with the options.

[Lima Juliet]

There have been some proper crazy rumours around this one. There was one guy who was convinced the he had to leave before 1 Apr 22. I couldn’t for the life of me work out why he thought that. He seemed to think that if he didn’t take his AFPS75, then he would be forced to move to AFPS15, and lose rights to AFPS75. That is, of course, total garbage. The individual has 2 options and doesn’t have to leave at all - they can have AFPS75/15 either way, with either more AFPS75 or more AFPS15 - but he was convinced he couldn’t and would need to leave before April next year. Bonkers!

I think the real problem is that the original decision created so much distrust that some are unable to believe that McCloud is actually a good deal. In fact AFPS15 was a pretty reasonable settlement back in 2015, but the whole way it was rolled out and presented was pretty poor in my opinion. I also heard a rumour that enhancements were being considered prior to the McCloud judgement, but then the cost of remedy shelved those. This has led to rumours of an AFPS22, which of course is also bunkum, as it would need to be staffed and with us by now. I reckon AFPS15 will be with us for a while now whilst they see how the McCloud remedy works out. Depending on how that goes will dictate how long AFPS15 remains as it is. But that is all just opinion before anyone makes it fact and decides they need to leave over it!

[Nil_Drift]

Understanding the AFPS75/15 concern

I understand the concern of the person that LJ says is 'bonkers' because of the way that the RAF has been so unhelpful in the past. When the 05 offer was being touted with a very short period of time to decide, any questions that were asked were all met with "I'm not a Financial Advisor, it's your call". As it is standard these days to have better things replaced with not so good, and PR-led headlines but important things still obscured by small print, my immediate concern on seeing that all would be going onto 15 from Apr 22 was that there is no Lump Sum with 15 at age 60. Therefore, what happens to those of us who have been on 75 for 40 years and, in the last couple of months get switched, compulsorily, on to a scheme that does not give a lump sum at age 60?
The worst scenario to skilled aircrew who haven't been boning up on financial wizardry through our careers would be that some adminer would say, "Sorry Sir, no lump sum because you're on 15 now". Explaining how this 'bonkers' person would feel, perhaps the best thing is to go on 31 Mar 22 with my Lump Sum rather than chance it to my 60th birthday and then get conned. I thought that and the Pension Society has assured me, kindly, that that is not the case. So why isn't there a FAQ line somewhere to allay these fears/suspicions?
It is still interesting to know, if having received my Lump Sum, as I have been assured that it is safe despite the forced changeover, if I decide that as PAS it is better to go 75/15, will I have to pay back any of the Lump Sum as I will get that before the decision has been finalised?
So, in summary, less financially-astute personnel are not 'bonkers' just very cautious of the young thrusters who are changing too many things too quickly very rarely for the benefit of those who have given more than 2/3 of their life to Queen and country.

[Easy Street]

I understand LJ's frustration. You don't need financial advice to understand the simple fact that your AFPS75 rights were/will be preserved on transfer, to AFPS05 (if you took it) and AFPS15 (whether you end up taking it in 2015 or 2022).

Forces Pension Society: All pension earned up to 31st March 2015 in a legacy scheme became an accrued pension right that can’t be taken away.

If you have AFPS75 in your pension history then you will get a AFPS75 lump sum on retirement. The more years you had on AFPS75, the bigger it will be. It really is as simple as that.

If you are not confident in your ability to use the pension calculator to make projections, then a financial advisor will help you work out which of the AFPS15 transfer points you should opt for, and whether you should retire a few weeks before your mandatory date. Those are decisions you can take nearer the time.

For the avoidance of doubt *your earned pension rights cannot be taken away and there is no need to leave the service to protect them*.

[MechGov]

Originally Posted by Easy Street

I understand LJ's frustration. You don't need financial advice to understand the simple fact that your AFPS75 rights were/will be preserved on transfer, to AFPS05 (if you took it) and AFPS15 (whether you end up taking it in 2015 or 2022).



If you have AFPS75 in your pension history then you will get a AFPS75 lump sum on retirement. The more years you had on AFPS75, the bigger it will be. It really is as simple as that.

If you are not confident in your ability to use the pension calculator to make projections, then a financial advisor will help you work out which of the AFPS15 transfer points you should opt for, and whether you should retire a few weeks before your mandatory date. Those are decisions you can take nearer the time.

For the avoidance of doubt *your earned pension rights cannot be taken away and there is no need to leave the service to protect them*.

If you are in a position to retire now with full benefits it might be worth considering the effect on your pension by however many years of no pay rise or below inflation pay rises you are likely to endure. At 55 your pension is index linked. I retired after the last bout of austerity at level 35 PAS and my pension was less than a mate who retired 5 years earlier at level 30.

[Easy Street]

Originally Posted by MechGov

If you are in a position to retire now with full benefits it might be worth considering the effect on your pension by however many years of no pay rise or below inflation pay rises you are likely to endure. At 55 your pension is index linked. I retired after the last bout of austerity at level 35 PAS and my pension was less than a mate who retired 5 years earlier at level 30.

It's a good point. The difference now is that you can keep accruing a AFPS15 pension until age 60, growing at 1/47th (2.1%) of each year's salary. A full AFPS75 pension is roughly 50% of salary, so for index-linking to keep pace you'd need CPI to be running 4.2% higher than the annual pay award. I guess it might be possible for a year or two but it would be surprising if such a situation could last much longer than that.

[Just This Once...]

Originally Posted by Easy Street

For the avoidance of doubt *your earned pension rights cannot be taken away and there is no need to leave the service to protect them*.

Easy Street
I think the nail you hit here reflects the lack of trust between the MoD and AFPS members and to be frank, there is good reason for this.

Fine print is one thing but the MoD can hide behind errors of omission too. A current example is for AFPS75 members serving on PA Spine terms (including transfers from Spec Aircrew to PA) - the MoD never amended the Medical Pension rights for the newer scheme in the same manner as they did for the normal enhanced pension. So if you look-up the AFPS75 medical pension tables you will see enhanced tables for all bespoke pay and pension spines (eg docs, lawyers, dentists, SF etc) and can easily find the current one for Spec Aircrew. But only Spec Aircrew - no PA Spine.

In recent years the absence of an amended ill-health pension table (there is no mention of the PA Spine anywhere) the MoD has defaulted to a position of 'no enhanced medical pension for PA Spine'. This policy is even enforced for those transferred from SA terms to PA Spine by the direction of MoD. Leave healthy and you get the enhanced pension you were expecting. Leave unhealthy whilst PA Spine, be it battlefield injury, MoD negligence, terminal illness or whatever then you are effectively removed from the PA Spine at exit. There is no other precedent for this and single-service commands recognise that this as more of an accidental omission than deliberate sculduggery but the MoD has made its decision - the absence of any wording as to how PA Spine are treated for Medical Pensions equals an opportunity to save money on the backs of the families who probably need it the most.

The lack of trust is at the root of these problems and the very core of this thread is around an unfair decision taken by the MoD to the detriment of its Armed Forces Pension Scheme members that it tried to fight through the courts, only to lose.

Both the Armed Forces Pension Board (15 members on that board, ever heard anything positive from them on member's rights?) and the MoD cannot be trusted - they make no attempt to protect the rights of scheme members and have effectively abdicated that role to the courts.

[Professor Plum]

The lack of trust is at the root of these problems and the very core of this thread is around an unfair decision taken by the MoD to the detriment of its Armed Forces Pension Scheme members that it tried to fight through the courts, only to lose.

it is because of this very reason I will be leaving at (and perhaps before) my EDP pension point.

The government has already made unlawful changes to the pension scheme I joined up on, and now forced me onto a new one with no choice.

I don’t think for one second that further changes to my pension scheme won’t be made in the next decade-and any changes will not be for the better (and if past performance is anything to go by-possibly unlawful!)

Don’t get me wrong-even now it’s a good a scheme, but given my concerns/future uncertainty, I think it’s better i jump in a few years with what I’ve got, than stay in.

[Lima Juliet]

Originally Posted by Professor Plum

it is because of this very reason I will be leaving at (and perhaps before) my EDP pension point.

The government has already made unlawful changes to the pension scheme I joined up on, and now forced me onto a new one with no choice.

I don’t think for one second that further changes to my pension scheme won’t be made in the next decade-and any changes will not be for the better (and if past performance is anything to go by-possibly unlawful!)

Don’t get me wrong-even now it’s a good a scheme, but given my concerns/future uncertainty, I think it’s better i jump in a few years with what I’ve got, than stay in.

Don’t leave because of pension changes, or you will join my ‘bonkers’ brigade. Anything you have earned up until they make a change is yours - it cannot be changed. They can only change things now and in the future. So leaving at EDP because they might change something in the future makes no sense at all - every year you stay past EDP, where they don’t change it, is more EDP and pension later. However, if you’re leaving at EDP because you’re fed up, fancy a change, your personal life has changed or you need the money, then fine, but for goodness sake don’t leave because they might change the pension that you might earn in the future.

By the way, there was nothing unlawful about the pension changes to AFPS15 either. The thing that was unlawful was how they offered ‘legacy pension rights’ to some, and not to others, plus offered AFPS15 to some and not others. That was age discrimination, which is unlawful without good reason, and nothing to do with the pension itself.

Nil_Drift

As it is standard these days to have better things replaced with not so good, and PR-led headlines but important things still obscured by small print, my immediate concern on seeing that all would be going onto 15 from Apr 22 was that there is no Lump Sum with 15 at age 60. Therefore, what happens to those of us who have been on 75 for 40 years and, in the last couple of months get switched, compulsorily, on to a scheme that does not give a lump sum at age 60?

Firstly, there can be a lump sum on AFPS15 at age 60, but you have to surrender part of your pension to get it. Currently, for £1 of pension you surrender you get get £12 tax free lump sum. However, you can only convert a maximum of 25% in this way. So, if you have a pension of say £20,000, and you want to convert 25% which is £5,000, then you would get a reduced pension of £15,000 and a lump sum of £60,000 tax free.
Secondly, you can’t be on AFPS75 for 40 years - the maximum is 37 years for Other Ranks and 34 years for Officers. That is AFPS75 pension 1.01. You really should get your head in the books on this. It really isn’t hard - certainly easier to read than FRCs and Aircrew Manuals!
https://www.gov.uk/guidance/pensions...n-for-veterans

As for being transferred a few months before you retire, then you would likely get a few months of that new scheme. That is the way that it normally works.

[Nil_Drift]

LJ - thank you for taking the time to respond. I admit to having a "que sera sera" approach as I can't change anything. I'm approaching 42 years in uniform so I've just rounded some numbers for ease - I know that I won't get a pension for all of it but I made the decision to continue working to get the income even if it's not pensionable. However, I now look forward to the possibility of benefitting from 15 along with my full 75.
The contribution of all other PPRuNer's is also appreciated.

[Party Animal]

Originally Posted by Easy Street

It's a good point. The difference now is that you can keep accruing a AFPS15 pension until age 60, growing at 1/47th (2.1%) of each year's salary. A full AFPS75 pension is roughly 50% of salary, so for index-linking to keep pace you'd need CPI to be running 4.2% higher than the annual pay award. I guess it might be possible for a year or two but it would be surprising if such a situation could last much longer than that.

Easy Street - I think you're wrong on 2 counts fella - which shows that confusion is still out there!

Firstly, there is no maximum number of years' Service that can count towards your pension, i.e, it is not capped at age 60 (page 6 of the AFPS15 booklet). I say this as I personally know of a few people extending beyond 60 (MEOS+) and still flying on the FL.

Secondly, for those on AFPS75 only, the previous dit on pensions being less at age 60, if you leave at that age, compared to leaving at 55 is accurate and doesn't need CPI to be anything like 4.2%. It just needs to be more than the annual pay rise. As a simplified example and using 50% pension and a salary of £60k:

Man A leaves at 55 with a £30k pension. If the CPI was %2.1, then his pension would be £30,630 at 56, £31,273 at 57, £31,929 at 58, £32,600 at 59 and £33,285 at age 60.

Man B stays in the RAF and gets a pay rise of 0%, 1%, 1%, 2% and 0% respectively up to the age of 60, whereby his pay would be £62,430. 50% of this = £31,215 at age 60.

So over the last 5 years, staying in from age 55 - 60 results in a significantly lesser pension for those old boys stuck on AFPS75. This is where McCloud changes everything and as others such as LJ has suggested, it is really good news for some of us.

On a final and just as happy note, I see the launch of 'Armed Forces Pension Awareness Week 2021' which is happening from 13-17 Sep 21. This should be able to answer all those 'unusual' or FAQ's that got missed - for those of us still serving. Add that to the new Pension Calculator predicted for October and we should be in a good position of understanding by the end of the year!

[Easy Street]

Originally Posted by Party Animal

Easy Street - I think you're wrong on 2 counts fella - which shows that confusion is still out there!

Firstly, there is no maximum number of years' Service that can count towards your pension, i.e, it is not capped at age 60 (page 6 of the AFPS15 booklet). I say this as I personally know of a few people extending beyond 60 (MEOS+) and still flying on the FL.

I didn't mean to imply that AFPS15 ends at age 60, apologies if I gave that impression. Was just using 60 as the new 'standard' retirement age to indicate that additional accrual is possible.

Secondly, for those on AFPS75 only, the previous dit on pensions being less at age 60, if you leave at that age, compared to leaving at 55 is accurate and doesn't need CPI to be anything like 4.2%. It just needs to be more than the annual pay rise. As a simplified example and using 50% pension and a salary of £60k:

Man A leaves at 55 with a £30k pension. If the CPI was %2.1, then his pension would be £30,630 at 56, £31,273 at 57, £31,929 at 58, £32,600 at 59 and £33,285 at age 60.

Man B stays in the RAF and gets a pay rise of 0%, 1%, 1%, 2% and 0% respectively up to the age of 60, whereby his pay would be £62,430. 50% of this = £31,215 at age 60.

So over the last 5 years, staying in from age 55 - 60 results in a significantly lesser pension for those old boys stuck on AFPS75. This is where McCloud changes everything and as others such as LJ has suggested, it is really good news for some of us.

I'm not confused, that was precisely my point (you'll note I wrote "the difference now is..."). Even with a 5-year pay freeze, Man B in your example will now accrue an AFPS15 pension of 5 x 2.1% = 10.5% salary on top of his AFPS75 pension. This addition will outweigh index-linking of a 50% pension providing CPI remains less than 4.2% above any pay award.