AFPS15 - government decision.
On 15 you have to do until age 60 to get the enhanced pension. A day before that,. and it’s a much smaller EDP and wait til you reach pension age, 66-68. It’s a gamble to be on 15, as it is a cost saving measure.
15 is also better than 75 for some due to its continued accrual beyond 34yrs commissioned service and the advantage of averaging the higher salary in the second half of a career. A cost-saving measure over a whole career, for sure, but those with an even mix of 75 and 15 have done well I think.
Last edited by Easy Street; 16th Jul 2020 at 18:49.
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You need to balance your own personal risks. Nobody will live forever, and aches and creeks can quite easily ground people. You can’t leave.
It’s actuary territory for the stats and risks, but I’m pretty sure that being in between the pension sweet spots takes nerve and crossed fingers.
It’s actuary territory for the stats and risks, but I’m pretty sure that being in between the pension sweet spots takes nerve and crossed fingers.
Thelizardking
Once you accept PAS you have 5 years of hard labour to serve. A couple on the Sqn took it recently, and took the £20k that went with it. They can’t leave until they complete 5 years. Their RoS (??) takes them beyond 2022, but not that far. They can’t leave now, and when they do leave they are on 15. The dates would identify them to the CM so I’m being deliberately vague. They will now go onto an EDP for a significant period of time.
Once you accept PAS you have 5 years of hard labour to serve. A couple on the Sqn took it recently, and took the £20k that went with it. They can’t leave until they complete 5 years. Their RoS (??) takes them beyond 2022, but not that far. They can’t leave now, and when they do leave they are on 15. The dates would identify them to the CM so I’m being deliberately vague. They will now go onto an EDP for a significant period of time.
can you expand on the benefits piece?
Last edited by Easy Street; 17th Jul 2020 at 08:52.
- the MoD has stated that for the remedy period it will ensure all eligible Service Personnel will keep their accrued benefits.
This is the key statement above. As far as I see it, for those of us who transferred from 75 to 15 in 2015 (we kept accrued 75 benefits up to 2015 and 15 benefits post this date) this is essentially an extension of that process. We can now keep 75 benefits up till 2022 and 15 benefits after that date, for most, including PA, I think this will be a win but I am by no means an expert.
This is the key statement above. As far as I see it, for those of us who transferred from 75 to 15 in 2015 (we kept accrued 75 benefits up to 2015 and 15 benefits post this date) this is essentially an extension of that process. We can now keep 75 benefits up till 2022 and 15 benefits after that date, for most, including PA, I think this will be a win but I am by no means an expert.
SOX80
That’s what I’d taken from it as well, which would be a great result if true.
The only question I then have is what happens at 55 if I leave before then?
In fact if I left next year would that give me all the benefits of a full pension at 55 that AFPS would have given me?
I will be joining the FPS to get answers but if anyone already knows it’d be great if you could share the info.
BV
The only question I then have is what happens at 55 if I leave before then?
In fact if I left next year would that give me all the benefits of a full pension at 55 that AFPS would have given me?
I will be joining the FPS to get answers but if anyone already knows it’d be great if you could share the info.
BV
BV,
My reading of it is that if you didn’t switch to AFPS05 and you leave before 2022 then you have the option of going with full AFPS75 benefits. Note that you need to leave at either your 16/38 or 22/44 options or after age 55 to avoid premature retirement rates. The options (with any adjustments to reflect training returns of service) will be recorded on your file because they remained extant if you had any AFPS75 history, even before McCloud. If you are within a year of an option then there will be some arguing with CM to do... they might say you have left it too late to activate your option; you could try saying the pension announcement has changed the calculus and merits special consideration. I suspect there will have to be some sort of class settlement on that... luckily for the RAF I suspect the economic situation will probably stop there being a stampede for the exit! Taking an option can be rescinded later without impact so I’d suggest talking to CM pronto if the one-year cutoff is likely to be a player for you.
My reading of it is that if you didn’t switch to AFPS05 and you leave before 2022 then you have the option of going with full AFPS75 benefits. Note that you need to leave at either your 16/38 or 22/44 options or after age 55 to avoid premature retirement rates. The options (with any adjustments to reflect training returns of service) will be recorded on your file because they remained extant if you had any AFPS75 history, even before McCloud. If you are within a year of an option then there will be some arguing with CM to do... they might say you have left it too late to activate your option; you could try saying the pension announcement has changed the calculus and merits special consideration. I suspect there will have to be some sort of class settlement on that... luckily for the RAF I suspect the economic situation will probably stop there being a stampede for the exit! Taking an option can be rescinded later without impact so I’d suggest talking to CM pronto if the one-year cutoff is likely to be a player for you.
ES
My 5 year PAS RoS expires next summer so it’s not an option point but I do have options outside the military.
Leaving on AFPS75 terms which provides full pension at age 55 is quite a jump in income (I had 15.5 years of AFPS75 when the 15 switch happened but my switch to PAS happened in 16) compared with the 75/15 combo which delays the full benefits until age 67.
I definitely need to do some maths. Now, where is that pensions calculator?!
BV
Leaving on AFPS75 terms which provides full pension at age 55 is quite a jump in income (I had 15.5 years of AFPS75 when the 15 switch happened but my switch to PAS happened in 16) compared with the 75/15 combo which delays the full benefits until age 67.
I definitely need to do some maths. Now, where is that pensions calculator?!
BV
Of course, pre-2004 there was no such thing as PVR pension abatement once you had made your 38/16 point (really a 37/16 point if you worked the fine print). It only came in with a refinement of rules to aid JPA implementation. Rather a lame justification to change our terms of service & pension, but here we are.
Oh and don't forget the virtual 50/30 point either - no PVR abatement at that point, as well no additional PVR-waiting time or other manning control measures.
Glad they're doing something about it, even if it looks like it won't be quite the "choose your own" nirvana that might have been hoped for.
@Al R etc, regarding age discrimination, always wondered how AFPS 75 justified the non-accrual of pension below the age of 21, given otherwise entirely equal terms of service between non-grads joining up. Any thoughts?
@Al R etc, regarding age discrimination, always wondered how AFPS 75 justified the non-accrual of pension below the age of 21, given otherwise entirely equal terms of service between non-grads joining up. Any thoughts?
JTO - thank you for the correction on 50/30 vs 55!
A question of my own now. Does anyone know what the position on lifetime allowance would be if one were to retire, crystallise a lucrative AFPS75 pension, and immediately rejoin on AFPS15? I understand fully that the 75 immediate pension will be abated to keep total annual income no higher than the previous salary, and that annual allowance breaches could still be a player (although unlikely if rejoining on a lower salary). Rather, my question is on the lifetime tax treatment of the resulting ‘virtual pension pot’ when the two parts of it are being simultaneously topped up and drawn down. There are quite a few out there who have done this, I believe, so I hope there is one among the audience here! Given the dire financial straits the government finds itself in, I see the chances of an increase in pension tax relief being somewhere between ‘nil’ and ‘zero’, and this pension ruling may present an opportunity to take stock. Pension tax avoidance and reduction in mortgage interest (by ploughing the AFPS75 retirement lump sum straight in, minus the family holiday of a lifetime
) could make this quite compelling.
A question of my own now. Does anyone know what the position on lifetime allowance would be if one were to retire, crystallise a lucrative AFPS75 pension, and immediately rejoin on AFPS15? I understand fully that the 75 immediate pension will be abated to keep total annual income no higher than the previous salary, and that annual allowance breaches could still be a player (although unlikely if rejoining on a lower salary). Rather, my question is on the lifetime tax treatment of the resulting ‘virtual pension pot’ when the two parts of it are being simultaneously topped up and drawn down. There are quite a few out there who have done this, I believe, so I hope there is one among the audience here! Given the dire financial straits the government finds itself in, I see the chances of an increase in pension tax relief being somewhere between ‘nil’ and ‘zero’, and this pension ruling may present an opportunity to take stock. Pension tax avoidance and reduction in mortgage interest (by ploughing the AFPS75 retirement lump sum straight in, minus the family holiday of a lifetime
) could make this quite compelling.Last edited by Easy Street; 19th Jul 2020 at 13:26.
I think the logic you quote wouldn't hold water. Sadly a bit of digging shows that age only became a protected characteristic in 2010, and you'd struggle to argue that your pension wasn't created before then I guess!
