Pension Annual Allowance... exceeded?!?

[alfred_the_great]

Originally Posted by Lima Juliet

That is the whole point of McCloud, it will offer you the chance to return to AFPS75 or AFPS05 if you were incorrectly and mandatorily moved to AFPS15 on the grounds of your age.

Detail here: https://forcespensionsociety.org/201...-armed-forces/

Except it doesn’t say that. It says the age based transitional protection was unlawful; that is to say it was unlawful to allow some to remain on their old pension simply because they were over a specific age on a certain day. The simply answer is to transition everyone - regardless of age - onto a new scheme.

edit - you may get between 2015 and 2021/2 on your old scheme, but the intent is to move everyone onto a 15-esque scheme ASAP.

[[email protected]]

I have just been given advice by an IFA and I will be close, but under, my LTA as follows:

Left in 2014 as PAS level 33 Flt Lt age 53 on AFPS 05 - hitting 60 this year and still employed with 2 small company pensions building - I was concerned that the EDP I received and the pension I have been drawing since 2014 would take me over LTA when I get another lump sum and go to 100% pension at 65.

Apparently the EDP and pension since 2014 don't count towards LTA and are Crystallisation Benefits (or some similar technical term.

So my full pension allowance at age 65 x 20 years plus my final lump sump take me to around £950K - close but still under the bar and my company pensions only make a small increase on that figure..

Don't know if this helps anyone but I thought I'd put it out there just in case.

[Just This Once...]

Originally Posted by alfred_the_great

Except it doesn’t say that. It says the age based transitional protection was unlawful; that is to say it was unlawful to allow some to remain on their old pension simply because they were over a specific age on a certain day. The simply answer is to transition everyone - regardless of age - onto a new scheme.

edit - you may get between 2015 and 2021/2 on your old scheme, but the intent is to move everyone onto a 15-esque scheme ASAP.

It does - the 'Remedy Period' is between 1 Apr 15 to 31 Mar 22 and you get to pick which scheme you would like. The only live debate is when you get to pick your pension for that period - either in the immediate future or later, at your final pension point. Clearly the government will favour the former and the scheme members would prefer the later.

I left during the Remedy Period so will be swapping my AFPS15 years for AFPS75 but this regression to the old terms may not suit everyone once they do the maths.

[SirToppamHat]

Originally Posted by alfred_the_great

Except it doesn’t say that. It says the age based transitional protection was unlawful; that is to say it was unlawful to allow some to remain on their old pension simply because they were over a specific age on a certain day. The simply answer is to transition everyone - regardless of age - onto a new scheme.

edit - you may get between 2015 and 2021/2 on your old scheme, but the intent is to move everyone onto a 15-esque scheme ASAP.

Originally Posted by alfred_the_great

Except it doesn’t say that. It says the age based transitional protection was unlawful; that is to say it was unlawful to allow some to remain on their old pension simply because they were over a specific age on a certain day. The simply answer is to transition everyone - regardless of age - onto a new scheme.

edit - you may get between 2015 and 2021/2 on your old scheme, but the intent is to move everyone onto a 15-esque scheme ASAP.

FWIW, Alfred the Great, I am inclined to agree, but even as recently as December 2020 the specialists at Air Command seemed (during their own pensions brief!) were unclear as to what was to come next, so I can see why people imagine they may be able simply to drop back onto the AFPS75 scheme for the remainder of their service. That 'Skype' brief was unusually well attended by the way, mainly by people looking for information about the MOD's proposal on McLeod, but aside from the sunset date, they had nothing to offer.

A switch to the AFPS 05 was by choice. We were all, ahem, briefed on the pros and cons and left to make up our own minds on whether or not to switch. I recall there was quite a bit of pushing to go to the 05 scheme and I was a bit surprised that there were no (?) cases brought subsequently by people who felt they had been poorly advised by others who were neither independent nor well enough qualified to provide financial advice. Personally I took the view that any new scheme would be less expensive to the government and, therefore, less beneficial to scheme members - it was as simple as that, and I know of others who applied the same logic. The result was that not enough people transferred over, which is why the 2015 scheme was brought in.

Removing choice from the equation, the 2015 scheme was forced on anyone with more than a certain number of years to serve (5 I think), but I fell into the group that didn't move, so I stayed on the AFPS75. The implication that this was based on age is just that, an implication. As I understand it, some people due to retire at 38 in 2019 would not have been moved. Others of the same age but scheduled to retire at 55 were moved, so I am not sure why this is just considered to be based on age - proximity to departure point would be a more accurate assessment.

Whatever's coming is just over a year away and we know the MOD's (and Government's) collective mind is on other things. For some a switch back to the 75 or 05 schemes for the period 2015 to Mar 22 will offset the (even worse?) scheme to come; for others I predict an enforced gut shot - but I have no specialist or inside knowledge.

STH

[Fortissimo]

Except it doesn’t say that. It says the age based transitional protection was unlawful; that is to say it was unlawful to allow some to remain on their old pension simply because they were over a specific age on a certain day. The simply answer is to transition everyone - regardless of age - onto a new scheme.

You cannot provide the required remedy that way, because the people who were allowed to stay on their old scheme and who now have those pensions in payment will still have an age-related advantage unless you take retrospective action to redefine their pension benefits - that would certainly keep the lawyers in clover for a year or two. What the McLeod remedy will do is provide everyone the same choice of scheme regardless of age, backdated to the start of the remedy period. The whole system will be reset from Apr 22 when transition to AFPS 22 for the remainder of your service will not be optional.

As JTO points out, the Govt decision, which will affect all public sector pensions, will be on whether an election has to be made by date TBD or whether it comes at your final pension point (or possibly at another Benefits Cystallisation Event). Your decision on 'stick or twist' will affect you for the rest of your life and you need to make sure you take professional advice. As a minimum you need to do the maths - it is possible to fudge the AFPS pension calculator by giving it an incorrect date of birth to make it think you would have had the option to stay on AFPS75, but it won't give you an entirely accurate answer. DBS, the scheme administrator, is eventually going to have to provide everyone with an illustration of their benefits (on a case-by-case basis because nobody has the same DOB and career profile) so that you can make an informed decision. What MOD will not do is give you advice, nor will the FPS - that is why you need an IFA. Whatever he/she costs you, it will be less than you will cost yourself if you make the wrong call.

[downsizer]

My understanding of what I've been briefed is.....

In '22 everybody still serving transfers to the '15 pension.

For the period of 2015-2022 those forced out of '75 (or '05) into '15 will be offered the choice of going back to those for that 7 year period or staying on '15. IYSWIM.

[Lima Juliet]

Yup, spot on, those forced to move in 2015 will be given the option regress back over the 2015-2023 Remedy Period. My understanding is that a bespoke pension calculator will be provided to allow people to work out their own circumstances. However, there will also be a couple of examples sent in the “bumf” when the scheme is notified. Everyone will be on AFPS15 that are serving by 2022/2023.

As to whether there will be an AFPS22? I think that is unlikely. I had heard that AFPS15 was performing better than planned and so they were looking to increase the benefits on it - all before McCloud threw a spanner into the compressor fan! So, I believe that based on that, then AFPS15 will carry on for a while yet (it was supposed to be a once in a generation change - AFPS05 had been too generous to be affordable unlike AFPS15).

Alfred, sorry chap, you’re wrong. I heard about that “Remedy Period” directly from the Pay Colonels. We will not all go to AFPS15 until after that.

[On3and6]

Pension Benefit Info Statement and PA

Hello all. I'm a returning 'member' from some time ago (new handle) and have a question for you gurus which I can't find a previous thread on (apologies if that's just my own poor searching ability). So here goes.....

I'm over 4 years into the 5 year RoS for PA (05/15 scheme having transferred from 75-05). My question is as follows:

Does the annual pension Benefit Information Statement under 'The amount of EDP (from age 40 or later', and 'The amount of pension' headings 'know' ie calculate on me not yet having completed the 5 year RoS? IE are these BIS figures actually correct on the day and can be taken as an accurate face value amount, or are they 'pre'calculated on the fact that my current salary is fully pensionable due PA and therefore assumes that I complete the full 5 years in order to realise the PA 'benefits'? I am currently awaiting FPS and UK Veterans forecasts but I think the question still stands. Does the system effectively fwd calculate (assuming you/I complete the RoS or, does it give a true and accurate amount on the day?

Thanks for any/all help in advance. Big decision to make and need to fully understand how the figures are calculated.

Cheers.

On3and6

[Door Slider]

I don’t have mine to hand but I’m sure it says that calculations are based on you leaving at that point in time (your birthday) and not a notional end of RoS time in the future.

[Fortissimo]

On3and6

Does the system effectively fwd calculate (assuming you/I complete the RoS or, does it give a true and accurate amount on the day?

I think it is an on the day calculation as there is no way of the system knowing how long you plan to serve for, although the pension itself (rather than EDP) will be calculated from your State Pension Age. The best thing you can do is run the figures through the MOD pension calculator and set your planned exit date to a realistic point in the future - you can then use the sliding scale to see when any major changes might occur. The online calculator will give you a good indication but not an exact answer, as everyone's circumstances are slightly different.

The Forces Pension Society will give you more professional information and it is always worth consulting them. FPS cannot give you advice though, you need an IFA for that.

[Jambo Jet]

Originally Posted by popeye107

. Any ideas if the 'notional' pension pot we are all building would be included in the calculation? I suspect it would as most Public Sector workers don't bother with a real pension plan.
Food for thought, as there is zip all we can do about it.

I am not sure how they would do that..... Take AFPS 15 for instance. (1) In your first 2 years service you get no pension benefits if you leave, although your "pot" is building.
(2) Leave between Year 2 and year 20 and you are entitled only to a deferred pension built up over those years (unless you reach 60) payable at SPA, when you claim it!
(3) you leave after 20 years and prior to NPA. You get EDP until SPA
Or (4) You leave at NPA on a full pension.

Lots of differing remunerations all with the same yearly contributions depending on what your future crystal ball says. How could they tax those scenarios (which may not come to fruition) fairly ?