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-   -   New Pension Scheme (https://www.pprune.org/military-aviation/177541-new-pension-scheme.html)

Ginseng 28th Jun 2005 21:57

Oggin
 
For AFPS75:

Officers:

Accrual rate even over 16 years from age 21, to reach 28.5% of representative pay at the 16 year point. Thereafter, a slower even rate over the next 18 years to reach 48.5% of representative pay at 34 years service from age 21 (Age 55).

Airmen:

Accrual rate even over 37 years from age 18 to age 55, reaching 48.5% of representative pay after 37 years.

For AFPS05:

Everyone:

Even rate of accrual over 35 years from start of full pay service, reaching 50% of final pensionable salary after 35 years. With the opportunity to earn increased accrual up to a maximum of 40 years for further service beyond 35 years. (widows pension 62.5% of members accrued pension, but capped at about 37.33 years service).


Regards

Ginseng

Oggin Aviator 28th Jun 2005 22:17

Thanks Ginseng; all your efforts on this thread and the other one are very much appreciated :ok:

So is the rate of accrual linear from 28.5% to 48.5%? if not is it laid down somewhere the actual accrual rate per year served?

I'm still confused as to how the RN justifies the new pension which states for an immediate full pension you have to retire at 55 - our rules for officers state that under a Full Term Commission you have to retire at age 50 unless you make Cdr (Wg Cdr equivalent) or higher. Therefore we will never be able to get a full pension by service alone - we would need to pay to top it up. If we didnt do that we would have a monthly EDP to 55, then a slightly bigger monthly EDP till 65 then the full monty. Or does the 2 EDP lump sums take this into account ........ hmmmm? :confused:

Unless of course whilst I've been away sunning myself in Spamland over the last 2 years they've changed the retirement age?

Another question - is normal retirement age for RN FTC(A) (=PA Spine) 55?

Oggin

Ginseng 29th Jun 2005 08:37

Oggin
 
Yes, the AFPS75 Officers accrual rate is linear from 28.5 to 48.5.

To the best of my knowledge and belief, the AFPS05 scheme rules do not allow an immediate pension, as distinct from an EDP, ever to be paid from retirement before 55 in cases that are unconnected with invaliding on medical or similar grounds, but I am always willing to be corrected. Whether RN terms of service might be adjusted to allow people service to 55, when their current engagements leave them a bit short, is a matter for the Navy personnel staffs - I cannot possibly answer it.

Likewise, I cannot personally guarantee that RN "PAS" are on engagements to 55, although I suspect that that is the case.

If these matters are not clarified in your OTT pack, then you must go back and ask the questions. You cannot make a full and fair comparison without knowing the answers.

Regards

Ginseng

LFFC 29th Jun 2005 16:39


I'm still confused as to how the RN justifies the new pension which states for an immediate full pension you have to retire at 55 - our rules for officers state that under a Full Term Commission you have to retire at age 50 unless you make Cdr (Wg Cdr equivalent) or higher. Therefore we will never be able to get a full pension by service alone -
Oggin,

That's the whole point about AFPS 05 - government policy is that nobody should get a pension until they are aged 65. But they have given the military a dispensation that allows us to have a pension at age 55. If you are fit and leave before age 55 then the government assume that you will seek employment elsewhere and do not need a pension until you're 65.

So it would seem that Lt Cdrs in the RN, that have not been promoted to Cdr by age 50, will leave with only the EDP. I can't help feeling that that is a bit harsh as it must be damned difficult to start a new career as a civilian at that age - but as long as it's good for the RN........

However, if you are an officer in the RAF, aged below 38, and you sign up for AFPS 05 then your terms of service will be changed to 18/40 to fit in with the new scheme and allow you to have an EDP when you leave. So maybe something similar will happen in the RN and terms of service for Lt Cdrs will be changed.

Regards.

Toxteth O'Grady 29th Jun 2005 17:49

Oggin


Another question - is normal retirement age for RN FTC(A) (=PA Spine) 55?
Yes.

I knows it 'cos I is one! ;)

:cool:

TOG

Ginseng 29th Jun 2005 17:59

Oggin
 
Check your PMs.

Regards

G

Ginseng 29th Jun 2005 22:20

Oggin
 
Added much later:

Check your PMs again!

G

Oggin Aviator 29th Jun 2005 22:38

checked and replied :ok:

pesky time difference :*

LFFC 30th Jun 2005 17:51

Just This Once....

Nope - haven't done that, but I did have a look at the stats that compared age against rank in the RAF.

It appears that really "high-flyers" start getting promoted to sqn ldr at age 28/29. Statistically, by the time you get to age 33 the RAF has promoted enough high-flyers to provide them with the number of wg cdrs that they need in the future.

Of course, there will always be some high-flyers that don't get promoted to wg cdr, and others that get promoted to sqn ldr after age 33 that do get further promotion. But the message is that, the longer you're a flt lt after age 33, the less likely it is that you'll get promoted to wg cdr in the future.

So in the future, if you're aged 37 and get offered sqn ldr then your choices seem to be:

1. Take the higher pay and extra flying tour, then stay in the RAF on the Career Spine doing continuous ground tours with little chance of further promotion or flying again.

2. Take the higher pay and flying tour then leave for the airlines at age 40.

3. Reject the promotion and hope for an offer of PAS at age 40 and service to age 55.

Now, let me think about that for a few minutes.........

Ginseng 30th Jun 2005 20:41

LFFC,

I am sure there are many thinking the same way, understandably. However, do bear in mind that if you accept PAS, you are accepting an enagement which is still open to competition for promotion. Can you be sure that, if you have aleady refused a promotion, you won't be regarded as having excluded yourself from eligibility for consideration for PAS terms? I don't know the answer, and I have no axe to grind, but it may be worth thinking about.

Regards

Ginseng

LFFC 30th Jun 2005 21:29

Ginseng,

That would be a hard choice wouldn't it! Just imagine, you're aged 41 and on the PA Spine as a flt lt - then you get promoted. If I remember correctly, that would mean that you move back into the Career Spine wouldn't it? It certainly would do if you were a PAS sqn ldr getting promoted to wg cdr!

If so, you would be taking a big hit to your pension prospects if you were signed up for AFPS05!

No - the whole system just seems broken to me. I do hope they fix it before we have to make the pension decision - then we'll all know where we stand!

And another thing Ginseng,

Can you be sure that, if you have aleady refused a promotion, you won\'t be regarded as having excluded yourself from eligibility for consideration for PAS terms?
If they took that stance, who would they have left to make PAS at age 40? I would suggest that it would be only those people that didn\'t even try to get promoted - is that really what we want? Now that really would give the Army and RN some ammunition! :ooh:

Regards

Nignog 30th Jun 2005 22:18

I have asked this question before but never had a reply. Indeed when asked at one of the new pension briefings the briefers did not know the answer so here goes.
Under Gordon Brown's new pension rules no one will be able to take a pension before the age of 55 after april 2010. The new pension scheme obviously escapes this because of the change to EDPs etc. However, if you stay on the old scheme, will you be able to take a pension if you retire before 55 after April 2010. If anybody out there has a definitive answer please let me know.

LFFC 30th Jun 2005 22:28

Nignog,

Sorry, but I couldn't actually see a question there. But I think the answer is "yes".

:O

Oggin Aviator 30th Jun 2005 22:38

What Nignog is asking is this.

He is thinking of staying on the old scheme ie not transferring to AFPS 05. Therefore under that schemes rules he would be entitled to an immediate pension assuming he had served enough time ie beyond IP. However he could still be younger than age 55 at this point.

Now, the Chancellor has stated that come 2010 no-one under 55 years old will be able to draw a pension.

So the question is:

If still on AFPS 75 and leaving the service in 2010+, having served past IP but before age 55 - will you get a pension?

i think!

Oggin

LFFC 30th Jun 2005 22:56

I've never seen any suggestion that the terms of AFPS 75 for existing scheme members will be changed beyond 2010. Maybe Ginseng knows more.

However, when Nignog gets his Offer to Transfer it will state quite clearly what he can expect when he retires if he stays on the old deal. It might be worth saving that document - just in case!

Regards

oldfella 1st Jul 2005 01:20

Calculator
 
June Focus newspaper, letter from a member of the Service Personnel Pensions Team. Mentions OTT advice to be given in July with comparisons of both schemes but also mentions that there will be an online pension calculator to help with "what if" calculations.

Three months from date of despatch of OTT pack to decide whether to tale new option.

DP Harvey 1st Jul 2005 07:37

A lot of people are placing a great deal of reliance on the Offer to Transfer pack-up. I believe we will be dissapointed in the degree of personal information in it. Sure, it will mention your name and current engagement, etc, and explain what, in general terms, you will receive at the end of your current engagement under both schemes. Any reference to AFPS75 will refer you to the existing rules which, quite honestly, you all should know what to expect. How can they possibly know what rank you will be in when you leave the RAF before and beyond the IP point and at age 55? They don't. AFPS05 information will simply repeat what we know about EDPs and Age 55, etc. How do they know what you will be earning at age 55 or any time beforehand? They don't.

I would be very surprised if there was any reference to PVR/NGR and redundancy, as it would effect you on an individual level, except to refer to the redundancy terms as already published or call an IFA or AFPS hotline, etc.

There are hundreds of thousands of personnel due to receive these pack-ups. I hope I'm wrong, but I don't believe they will each be detailed enough to give actual pounds and pence comparisons, without reference to a generic calculator.

So, I'm using my own methods to find out all I can, and then I will make my mind up, perhaps using an IFA. The pack up should not tell me anything I don't already know.

LFFC 1st Jul 2005 19:01

DP Harvey

I agree with you - I think that the Offer To Transfer packup will be aimed at the average soldier and won't answer many of the difficult questions that aircrew might have.

You're also right that everyone must make up their own minds given their own circumstances. So my advice to everyone is to ask lots of questions if the paperwork doesn't give you the answers that you need. Don't make assumptions!

Ginseng 1st Jul 2005 19:55

LFFC
 
Ref your post yesterday at 22:56...

Sorry, don't know anything about this one.

Regards

Ginseng

LFFC 1st Jul 2005 20:40

JTO...


EARLY DEPARTURE PAYMENTS (EDP) SCHEME
Introduction
Changes to tax law by the Inland Revenue do not allow pension benefits to be paid from a tax-approved pension scheme before the age of 55 (apart from those for ill health). The new Early Departure Payment (EDP) Scheme is not a pension, but it pays a tax-free lump sum of three times pension and a taxable income, so it is a compensation payment, similarly structured to the Immediate Pension (IP) in AFPS 75 but of a lower value. It is payable to personnel who leave Service from age 40 AND with at least 18 years of service, but before the normal retirement age of 55.

Who is will be affected by this change?

Those who choose to transfer to the new AFPS 05 and, new entrants or re-entrants to the Armed Forces from 6 Apr 05 will be eligible to receive an EDP (apart from certain specialist staff who are on bonus terms). Those already in receipt of an IP or who are currently serving and decide to remain in AFPS 75 will NOT be affected by these changes.
That was taken from the MOD website at:

http://www.mod.uk/issues/pensions/ea...e_payments.htm

I always thought that the last sentence was quite clear. But I can understand why you are suspicious.

Ginseng 2nd Jul 2005 19:23

2010 Pension Rules
 
Think I understand what's behind this one now. It is true that HMG intends to change general pensions legislation so that from 2010, it will not generally be possible to draw benefits from a pension scheme before the age of 55. However, there will be certain exceptions for professions where it is recognised that fitness requirements make such a late compulsory minimum pension date impractical. I believe these exemptions will cover the Armed Forces, Police and other emergency services, as well as at least some categories of sportsmen/women. That would seem to provide the answer to the question.

It is nevertheless true, though, that the rules of the AFPS can, in principle, be altered at any time by appropriate legislation.

Regards

Ginseng

LFFC 4th Jul 2005 17:00

Ginseng,

It is nevertheless true, though, that the rules of the AFPS can, in principle, be altered at any time by appropriate legislation.
Whilst that's true, the clip from the web that I quoted above seems to be quite clear.

Given that the wheels have been very cautious to ensure that anything they say will not make them liable if you make the wrong pension decision (hence all the stuff about seeking independent advice), it seems quite significant that they have stated that these changes to the tax law will not affect people who choose to remain in AFPS75. They must be pretty sure of their facts.

On the other hand, if that advice proves to be wrong at some time in the future, they may well be held liable for issuing misleading advice.

Regards

Ginseng 4th Jul 2005 19:29

LFFC
 
All I was really meaning to point out is that the quote you posted can be interpreted in a number of different ways. I am not accusing the MoD of deliberately pulling the wool over anyone's eyes. Nevertheless, the quote says that those who choose to remain on AFPS75 will not be affected by "these changes". Do those words refer to the "Changes in UK Tax Law", or to "the introduction of the Early Departure Payment Scheme". None of us can be quite sure which of these two meanings, or another, the writer intended to convey. And, in the end, the MoD cannot, and will not, give a cast-iron guarantee that tax law will not change in the future in a way that it cannot foresee now. Be very careful, therefore, not to assume that the words are a legally watertight way of saying what you would prefer them to mean.

Regards

Ginseng

moggi 9th Jul 2005 08:10

Short Service to Permanent Commission
 
Perhaps someone can help shed some light on this one - I'm 10 years into my 12 year Short Service Commission and they have just offered me a PC. The initial paperwork gives an 18/40 point, which infers that rather than giving me the option of transfering to AFPS 2005, I will be transferred anyway.

Clearly I would like to stay on existing AFPS 75, and sign on 'til 16/38. Is this Innsworth pulling a fast one? If so can I wave a "preserved pension rights" card?

There will be an obvious disparity between 2 people who joined at the same time, one who can retire on a full pension at 38, and one who has another 2 years left to run!

Any help appreciated!

Impiger 9th Jul 2005 08:39

MOD Briefing Session
 
There was an RAF briefing session on the Pension in MOD last Thursday and another is planned for Monday. It was extremely good and I highly recommend that any who have not been, and are concerned about their pension, should attend. The roadshow will tour all Stations I believe.

The standard disclaimer is of course that all circumstances are particular to any individual but in essence those who serve the full stretch seem to be more likely to benefit under AFPS05. Those who leave earlier seem more likely to see some advantage in sticking with AFPS75.

The calculator will help and one individual who said he was intending to stick went through his sums in public session and was surprised when the new scheme worked out better! The factors you have to weigh are when will you retire from the RAF? What rank will you be and how how long have you been in that rank? Do you intend to work full time? If so have you time to earn another pension before 65? How long do you intend to work after leaving? The list goes on.

On IFA the advice was that for the princely sum of £20 an organisation called the Armed Forces Pension Association (a charity staffed by ex-Forces and Financial Advisors) will do an individual assessment for you and give you advice.

All in all then, people should not be too glum about this. For some there will be real benefits in the new scheme and for others there will be no compulsion to join something which disadvantages them.

I strongly advise all to go and listen to the presentations.:ok:

Ginseng 9th Jul 2005 10:40

Moggi,

I think what lies behind this is that the RAF at least is intending to offer an extension of service to the 18/40 point, to all those who are currently on 16/38 terms, so that they may have the opportunity, if they wish, to transfer to AFPS05 and serve to at least the initial EDP point. It sounds as though they are pre-empting your decision on whether to take the PC. Whether they will give you the leeway you are looking for is doubtful, since your 16/38 point, if you were to transfer now, would fall after the AFPS05 transfer date. Talk to your OCPSF and have him/her ask the question pronto!

Impiger,

You are generally right, but it depends on other circumstances. If like me, you were a late joiner, and have no pre-21 service to gain in AFPS05, and are not PAS, you may still find (as I have), that AFPS75 is the slightly "better" option, even at the 55 year point (and much better for earlier retirement!).

Regards

Ginseng

Impiger 9th Jul 2005 11:26

Ginseng

I agree I should have said that total length of Service is actually more important than age on exit. Its just that most join from school/higher education and thus age on exit tends to equate to length of Service.

I was pleased to hear that University Cadet Service counts (from age 18) mainly it would seem because we were paying National Insurance contributions! Now about that missing 6 months of contributions before I hit 18 do you think I can get them back:E

Ginseng 9th Jul 2005 14:51

Impiger
 
Probably not. Just console yourself with the thought that they may count towards your state retirement pension, if there were enough of them within a single tax year to make it a qualifying year!

Regards

Ginseng

oldfella 10th Jul 2005 02:10

Impiger mentioned a MOD briefing.

OTT comes out in July, MOD briefings well nto July - not too much use and already eating into time to decide.

Is there to be a roadshow, and what timescale?

DP Harvey 10th Jul 2005 10:51

Given the dispersement of Service personnel in the MOD, a roadshow plan would be open to all kinds of problems. Some folk will not get a roadshow due to their location, etc, and if in the fullness of time they realise that they made mistake in their choice they could argue that they were unfairly informed, because other people got a roadshow and they didn't.

This is down to individuals looking after their own interests. There is a lot of clearly written info, about both schemes available. Flt Cdrs with junior ranks could convene meetings in their workplaces, with admin staff present to broadcast and explain some of the terminology involved, and generally make themselves and the admin staff available to clarify any confusion.

The current redundancy scheme is muddying the water somewhat, but it too comes with pension info and an option for the individuals involved to revert to AFPS75 if required.

OKOC 10th Jul 2005 12:09

After asking if the Adminers at Cranwell will give individual advice I was categorically told "ABSOLUTELY NOT-IT MAY GIVE YOU RE-COURSE LATER IF THE ADVICE PROVES WRONG".

I've spent the £20 and joined.

covec 10th Jul 2005 13:29

How will "A-Day" April 2006 affect both the 75 & 05 AFPS?

I believe that there will be a lifetime cap on what your pension is worth - starting from 20 times your annual pension.

Not likely to be an issue for AFPS 75 I admit - but what about those of us on the PAS and signed to age 55?

Anyone have any ideas or heard any rumours about how the new pension laws from "A-Day" will affect AFPS 05?

Regards:confused:

Ginseng 10th Jul 2005 14:30

DPH,

I agree that the idea of a roadshow, though to be welcomed, is problematic unless it can be uniformly delivered to everyone, which I doubt. Whilst I would thank Impiger for his post, it seems a little unfair if those who happen to be working in MoD at the critical time have the benefit of a roadshow, and a demonstration of the calculator, which is not afforded to everyone else.

OKOC,

I have to sympathise with the position taken on advice. The administrators can tell you how the system works, but they are not qualified to give you personal financial advice.

Covec,

The lifetime pension limit to be produced within the "A-Day" rules is, I believe, about £1.5M. This refers to the size of the investment fund which provides your personal pension. The AFPS, just like the National Insurance "Fund", is not a fund at all. There is no pot of money. Your income stream is paid from current Treasury spending via the MoD pay and pensions bill. I don't think you have anything to fear. Enjoy your huge new PAS pension (but spare a thought for the rest of us!)

Regards

Ginseng

Impiger 10th Jul 2005 20:02

Pension 2005 Roadshow
 
The briefing in MOD was one of several - each Service will hold at least one: I think the next RAF one is planned for tomorrow and then RN and Army ones next week and/or the week after. Whitehall warriors have been advised to attend at least one as they are reasonably generic but those run by one's own Service are obviously going to be of most benefit.

As for a wider roadshow I have to admit that was my expectation rather than a given. The MOD - RAF presentation was I think run by RAF Uxbridge so if they can do it every Station can.

I believe that once the Offers to Transfer are sent out each individual has 3 months from receipt to decide so the clock is not yet running. The lass who briefed us also mentioned a receipt of offer slip which she implored us all to fill in and return. Why? Well because they will send hasteners to anyone who hasn't decided and they really want to make sure that every individual has received their personal assessment and offer.

I know it is easy to be cynical and scepical about this but the 'system' is really trying quite hard to be squeaky clean on what is after all a rather important change.

Ginseng 10th Jul 2005 22:14

Impiger
 
Unfortunately my understanding is that, for the RAF, the 3-month clock starts ticking from the day your OTT pack is despatched (to your pay statement address), not from the day you actually take receipt of it.

Regards

Ginseng

Oggin Aviator 11th Jul 2005 01:13

Anyone know the consequence of someone on the career stream at the moment who opts to stay on AFPS 75 then transfers to PAS later on down the line - do they have to transfer to AFPS 05 at that point (which actually would probably makes sense cos' its probably worth more on PAS) or could they stay on the old scheme?

What I am trying to say is that if you get an extension of service or if your Commission/Enlistment terms and conditions change are they going to force you onto AFPS 05?

cheers

Oggin

c130jbloke 11th Jul 2005 09:12

You might wish to try this link:

http://www.forpen.co.uk/

I suspect that it is the organisation a previous poster referred to.

c130jb


:ok:

VitaminGee 11th Jul 2005 09:22

Oggin,

As I understand it, your type of commission should not dictate the pension scheme. It is only personnel who join the services after Apr 05 (?) who will have AFPS 05 as their only option.

I'm FAA PAS and will have the option of either scheme although, for me, adopting the new scheme is virtually a no brainer.:ok:

VG

LFFC 11th Jul 2005 12:55

Oggin,

I believe that once you've made your decision to stay on AFPS75 you won't be able to change to AFPS05 whilst still serving. If you left the services and cashed in on AFPS75, then rejoined, you would automatically be in AFPS05 - but you'd be starting from scratch again.

So you've got to think really hard about your chances of being offered PAS. At the moment, I hear that almost nobody is being offered it - they have probably worked out how much it's going to cost them! By my reckoning (roughly 500 PAS at an extra £10000 a year pension) inclusion of the PAS will cost about £5m a year - and that's just for the RAF!

I wonder if they took that into consideration when they did the sums to make sure that the overall cost of AFPS05 was neutral?

Ginseng 11th Jul 2005 15:49

Oggin
 
VitaminGee and LFFC are absolutely right. 6 Apr 06 is a one-off offer transfer date. That means you have to take your gamble now. Frustrating, but it's one of the conditions.

Regards

Ginseng


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