|
Of course, I may be completely wrong, but I don't believe that you should get too distressed until you know the facts of FAFPS. The DIN gives some like-for-like examples that make grim reading for some of those that switch to '05. |
JTO
The DIN spells out nothing as far as I can see. Until we know what FAFPS will pay out, then we can all guess and scaremonger. The presentation that I sat through with one of the FAFPS team showed exactly the example that's being talked about and they didn't know what FAFPS would pay either - they knew how much AFPS 75 and 05 would likely pay for service to 2015 but not what the FAFPS portion would pay on retirement. Until we know this, then we are all just guessing. However, it is upon all of us to be fully involved in the consultation process that is just about to kick off. Clott PS the link for the consultation is on the bottom right hand side of this webpage Ministry of Defence | About Defence | What we do | Personnel | Armed Forces Pensions Compensation and Veterans | Find out about The Future Armed Forces Pension Scheme |
Hi Clott,
Try this thread: http://www.pprune.org/military-aircr...ml#post7045342 But as an example: Those who made a move to AFPS05 on the basis that would be serving to 55 are in for a rude awakening. Their offers to transfer would have shown them that the pension they would receive at the 55 point would, on either scheme, be about the same. However, the AFPS05 scheme added a few sweeteners, such as 4 time D-I-S, so looked like the best move. However, the new scheme stops them from making their 55 point on AFPS05 so all the disadvantages of the EDP now kick in. Examples for 2 identical wg cdrs who were both on AFPRS75 till the O-T-T (I've used the figures in the DIN): 27 years of pensionable service at the point of transition to the Future AFPS. He leaves the Armed Forces after 34 years of pensionable service at the age of 55. Bloke who stayed on AFPS75: He will be entitled to receive, as his accrued AFPS 75 rights, a taxable Full Career Pension of around £32,000 per annum. He will also be entitled to a tax free lump sum of around £96,000. Bloke who moved to AFPS05: He will be entitled to receive, as his accrued AFPS 05 rights, a taxable Pension of around £28,500 per annum. He will also be entitled to a tax free lump sum of around £85,500. In both cases they will be entitled to pension benefits for the 7 years of pensionable service under the Future AFPS in accordance with the rules of that scheme. The rules of the new scheme, including when pensions will be paid, are under development. So for changing to a pension scheme that evaporated 9 years later the AFPS05 bloke takes a spanking. If he stay on the old scheme he would have been ok; if the new scheme had seen him to retirement he would have been ok. But moving from 75 to 05 then forced to AFPS15 is a major kicking. Wonder if anyone will challenge their Offer To Transfer paperwork... |
As someone who isn't effected by the new pension scheme I haven't been following this issue very closely, however....
I thought it had been stated that anyone within 10 years of retirement had been told that they "wouldn't be effected/suffer" by the introduction of the new pension. Therefore the example of the Wg Cdr quoted, 7 years left to retirement, would surely fall into this category? Also, what is the exact wording of AFPS05, if it refers to "serving" until 55, then the Wg Cdr in question is doing so...? He hasn't left the service early, and isn't taking EDPs from the age of 48 while still serving as an active Wg Cdr... He just isn't accumulating any more years in his 05 pot (that is of course assuming the "protected with less than 10 years to go" arguement isn't actually being applied) The choice of changing to 05 or staying on 75 was a personal one, with a variety of factors, not just the 4x D-I-S. The widows pension is also better under 05, and if you coupled 05 with PAS you were in a "win-win" situation. However, as in all things, it did require certain assumptions to be made, as to staying in until 55, there is one school of thought that says retiring before 55 on the 05 scheme is actually the most financially astute option. Sorry if I've gotten hold of the wrong end of the stick! |
JTO
Those that accepted the offer to transfer took a gamble and now the gamble may be less of such a good deal than they imagine. There are a few aircrew who stayed Spec Aircrew and didn't swap to PAS and they retired on less than they could have as PAS on AFPS05 - there are also those that retired as PAS on AFPS05 who were barely average at their job and got equivalent to a Wg Cdr's pension. What am I trying to say? There are lots of winners and losers in the pension offer to transfer and that is just life. I could get really mad over the decisions that have occured over the years or I could just live with it. Your example shows a drop of about 10% for the notional Wg Cdr - if that reflects across the board, then its not that bad IMHO. There is also a chance that FAFPS may compensate for this shortfall through the faster accrual rate that is being hinted at (the new civil service scheme is also getting a faster accrual rate I believe?). I reckon that there will be winners and losers again this time around, there probably always will be. But like Cpl Clott says, let's wait to hear the facts before getting too "angry of Sleaford Town" about it. LJ |
"Gamble"
LJ,
To transfer to the 05 pension scheme from the 75 pension scheme in my eyes was never a 'gamble' but a sound decision made by the choices offered to me at the time, & whilst I for 1 will escape unscathed as I'm over 45 on 1 Apr 12, I do feel for the other guys who will get stung.:mad: |
LJ,
How well one did, or didn't, do one's job has never been a determining factor in the size of one's pension! You appear, but perhaps I am wrong, to be "miffed" that a Flt Lt on the PAS who is "barely average" at their job may retire on a Wg Cdr's size pension. If it's any consolation - rest assured that I have come across quite a few Wg Cdrs who are "barely average" at their job - and nobody seems to query their pension entitlement! Perhaps I have read the tone of your comment incorrectly - if so I apologise unreservedly!! |
Biggus, Equilibrium et al
No need to apologise as I was being "bullish" with my opinion! :ok: IIRC the decision to tranfer was made after the PAS spine opened, and so those that chose to transfer to PAS and then to AFPS05 hit the jackpot big time. Those that didn't had a normal pension comensurate to their rank. Quite frankly, IMHO, the PAS and AFPS05 was a complete c0ck up (but very nice for those that got it). It left people "gambling" accepting promotion to Sqn Ldr in the hope they would make Wg Cdr, or they may as well stay a "gash shag" Flt Lt and climbing on the PAS gravy train. The reason for the incredibly devisive FRIs for Sqn Ldr aircrew (a second order c0ck up) was to try and attract those to stay and go for Wg Cdr rank. On those who elected to go AFPS05, well there are never any guarantees that you would serve to 55 - redundancy, medical discharge or change of family circumstance could all affect the ability to go the long haul. Quite simply, those that switched did take a "gamble" in my opinion and it looks like that gamble MAY not pay off (a notional 10% decrease depending on what FAFPS brings). As Clott has been saying throughout, there are no decisions yet on FAFPS. It's up to all of us to ensure our circumstances are heard during the consultation process. Finally, I was on AFPS75 and I'm now on RFPS05 (which is similar to AFPS05) and I'm also likely to be hit by potential FAFPS changes; so I guess that gives me a "speaking chit" and also a right to be concerned. I took a "gamble" and it has taken me outside the protection of the "10 year rule" that I would be under if I hadn't changed (voluntary just like the offer to transfer) - but you won't be hearing me rant about the fairness of it all as sh!t happens...;) 10 years+ notice of a 10% shortfall seems pretty fair as we've all got time to do something about it. Those of us who know others in the civilian world know that they have been suffering similar shortfalls with no back up or ability to consult. I guess what I'm saying is, it's all a matter of perspective. LJ |
LJ - so at what time scale, and what percentage slashing of my pension should I start getting upset about? And what if in 6 years time we have our pensions cut again?
I've got 12 years left to my 55, and I'm most certainly not a Wg Cdr that'll be picking up the kind of figures stated up there. I do however, have 2 teenage children that will hopefully be going to University/ buying cars/ buying flats etc and I'd worked out how much I'd be able to help them (not to mention keeping Mrs B in the manner.....) based upon what I'd signed up to receive. It appears that through not fault of my own I've now lost a sizeable chunk of what I expected, and have even lost out further purely because I had the audacity to agree to a pension that was offered to me. I don't want to come across as a sulky child, but it really is not fair. *stamps feet* |
its good for them. Most are within the 10 year cutoff. bearing in mind the size of their pensions, wouldnt it have been nice for all at 1* and above to waive their grandfather rights? no, thought that wouldnt happen either. :hmm:
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I am absolutely disgusted by the apparent terms of FAFPS and believe it represents a direct and absolute betrayal of all members of the Armed Forces by the Senior officers who 'claim' to represent them. |
Melchy
No announcement of FAFPS or even a draft as yet... |
Bootscooter,
Forgeting AVCs for the moment, have you considered other ways of making hay whilst the sun shines? There are lots of pros and cons and they're not right for everyone but given your stated circumstances and possibly, your needs, it might be worth you delving a little deeper to get a more informed perspective. http://www.mod.uk/NR/rdonlyres/FC4FE...5AYFactors.pdf |
Added years is the route I took when looking to boost my pension as a relatively 'late joiner' after 4 years at university. When compared to most, average stock market returns over the past 5 years or so, the idea of being able to bump your guaranteed pension up by an index linked amount each year seemed quite a good deal.
However, I will be very interested to see what happens to AVCs under the new scheme. I am hoping that they won't be massively effected, after all, extra years are just that, so I would hope be applicable to all schemes. If not and they decide to close the AVC route under FAPS, I would hope to get a refund of contributions paid so far if they are not going to honour them. Out of interest, and related to some of the earlier comments about moving to AFPS 05, one comment from an FPS presentation I attended at the time immediately came to mind about 05. It ran something along the lines of "think very carefully before you elect to change schemes; if in doubt, you should probably stick with what you have now. If you change and it proves to be the correct decision, the benefits will be far outweighed by the potential losses if you change and it proves to have been the wrong choice." A little bit of better the devil you know, but it was enough to persuade me to stay on 75. |
AVCs are different to buying Added Years, and placed with a third party so you should be fine. As to what happens to them, perhaps that is best answered by wondering why anyone would want to buy additional units (by whatever route) with a scheme that is looking increasingly out of touch with what people had in mind when they joined up.
Don't be fixated 'just' on stock market returns either - choppy equity March mind. |
Al,
When I bought into the extra years under the 75 scheme, it was sold as being an 'in scheme' AVC rather than being held with a third party, hence my wondering what will happen to them when that scheme is effectively wound up to new business. However, I do agree with you entirely on wondering why people would do it. At the time, I was fairly sure I was going to make the effort for the long haul, but these past few years are sorely testing that original plan. |
IMPORTANT!!!
The online consultation starts today and finishes 11 May 12...
...IT IS IN ALL OF OUR INTERESTS TO FILL IT OUT FAFPS consultation Tell your mates about it as well by any means possible CPL Clott |
PS The presentation I saw is at this link that might help some understand...
http://www.mod.uk/NR/rdonlyres/B2DC9...ndard_V72U.ppt Warning, it is a big file but worth a read for those that can't make the presentation. :ok: Clott |
Oh Dear
Cpl Clott,
As instructed I filled out the online consultation form and my how disappointed I was. Such a serious subject given such cursory and loaded questions by DASA. With so much still to be decided this consultation period should be conducted once the draft proposals have been published. Fundamentally I believe that HMG/HMT are missing the point. The majority of us complete our Service careers between 45-55, and any HR specialisit would advocate that unless the leaving Service Person had particular skills, then this is not the optimum age to compete with the national/international work force. Therefore EDP, IP and leaving the Service should be retained for the 35-40 year point, with enough lump sum to re-train and to make up the salary in going in at the bottom of a Private Sector HR workforce. Secondly, if the pension benefits are reduced significantly then Defence's high achievers and those with greatest potential will leave for the private sector as there is no (reduced) incentive to stay (especially if they will have to leave at 55 and then try and establish a second career). This will result in the not so high achievers and 'B Team' of Defence Senior Leadership making its way to the top ranks. I believe that it has been the acknowledgement that Service Personnel recognise that their chances of a true second career at 45-55 is much reduced, but outweighed by the understanding that HMG/MOD will rectify this imbalance through a decent pension. I would also go as far as to suggest that as Pension benefits is probably the number 1 or 2 reason for Service Personnel being retained in Service beyond age 40, that any significant change in Pension rights should also come with a 'break opportunity' for those that want to 'opt out'. If I had just taken promotion, a new commission, or anything that results in a return of service based upon a career plan with the current Pension Calculator forecasts, then once the full details are known I should be given the option to leave the Service in an attempt to switch to a genuine (and potentially more incentivised) second career in the Private Sector. My last point is that the current HMG 'are making hay while the sun shines' as the Economic Recession is presenting a rosey picture of the MOD and Service Personnel, many areas in 100% manning that has been unheard of for years. This means that many Service Personnel are just grateful for employment. But when (and it is when, not if) the economy picks up then it will be interesting to watch how HMG, MOD and if they care, HMT, attempt to prevent the mass VO of Service Personnel, potentially all those 'middle managers' with significant experience in the age bracket 35-45, where hanging in there for the pension is no longer quite the retention positive factor that it once was. |
MM4
Yup, all valid points and I hope you mentioned them in the comments box at the end? The more of us that bring these types of points up, the better, in my opinion. Who knows, it may drag out the consultation beyond the target that in turn will delay FAFPS - we can but hope! Clott |
FAFPS
Bootscooter and Razorduck raise a very interesting topic here!
I have many burning questions and thoughts regarding the new pension scheme, but one in particular that is really concerning me. This is the best way I can explain this scenario! I believe that I am correct in thinking that if my ‘twin brother’ and I had joined the Service on the same day; both promoted through the ranks on the same day: then one of us transferred to AFPS 05; that when the FAFPS is implemented in 2015 the one who transferred to AFPS 05 having made the long term commitment would be discriminated against and financially worse off! It would appear from the last update on FAFPS that it would have been prudent for me (like many others) to stay on AFPS 75 and not transfer to AFPS 05. I, like many other members of the armed forces made a massive commitment and dutifully transferred to AFPS 05. I am acutely aware of the financial climate ‘we’ all find ourselves in and ‘we all must share the burden’. Notwithstanding, if my calculations are correct it would appear that I like many others are going to be hit with a ‘double whammy’ simply because we committed to the Service. This cannot be morally acceptable and I really hope that I am wrong on this matter because if it is correct it is perverse! |
Please - give us all a break!
Your commitment to the service is expressed through your commission, not your pension. It is actually the Armed Forces that made a massive commitment to you ... Your transfer to AFPS05 was not dutiful - it will have made financial sense at the time, based on the assumptions you made about the likely length of your residual service. I'm sorry for you that your assumptions appear to have been mistaken in light of a changing global environment - who could have seen that coming in 2005? However, I will be reserving the majority of my sympathy for those whose loss came as a result of mistaken assumptions made by others, such as all the trainee pilots made redundant last year because the tw&ts at Manning still can't accurately predict demand, after only about 50 years of trying. The (as yet only hypothetical) losses of those who transferred to AFPS05 comes from having taken a punt on catching two in the bush rather than sticking with the bird in hand. Some on these forums would call that rather naive. Now trot along to join the very long queue of all the other people whose fortunes have suffered as a result of the destruction of our TACOS these last few years. |
Couldn't have put it better myself...:ok:
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However, a number have been advised to challenge their OTT paperwork and a few are choosing to challenge their PAS offer as the 'remuneration package' has been significantly altered. |
Mighty7
It has been confirmed from the FAFPS team that PAS pension supplements earned up to the changeover will be banked as part of your old pension. This is obviously still dependant on completing 5 years on PAS spine. The big disapointment will be for those who only intended to do the 5 years PAS and then leave with a significantly increased IP and gratuity. Everything earned after the changeover date will be defered until payment iaw the new pension terms. which may not be payable for a long time, and may not include a gratuity. At the moment, its costing the RAF £80k cash, plus an extra £20,000 gratuity and an extra £6000 per year on my pension payable anytime after the age of 43 to guarantee my services for 5 years. Even then the decision was a close run thing. Gloat mode dissengaged. Are you going to accept the same tie-in for the promise of an extra ~£5000 a year on your pension payable from the age of 60? You can do the maths if you like, but that package is worth about 100k at todays annuity rates. Or an extra £20k for each of those five years. They'd have paid you £13k pear year as a pension if you left! Thats a big commitment from you with not a lot in return. Of course, you might do it for the love of the job. |
Kind of makes you wonder what sweeteners will be put into the NEM to kep aircrew in. Lots of ads online for global recruitment, when the recovery comes, what is going to keep people in?
|
Arty Fufkin,
I do not have access to DII in my present location. Do you have any more specific detail on how that will work with PAS up to transfer date. i.e. Has there been a new DIN to cover PAS etc as was discussed by the FAFPS team? When I spoke to them a few weeks ago the team were not able to give me an answer on what would be accrued under reserved rights for PAS chaps who will not reach their 5 years ROS before transfer. My 5 years ROS on PAS will only be completed 6 weeks after 01 Apr 15. My reading of your statement above is that I would get approx 4.8 years of PAS accumulations added to my 38/16 AFPS75 pension, but would that mean my pension would be based on final salary PAS (i.e. level 25) or would it be based on level 9 Flt Lt with a top up for the 4.8 years of PAS? Any clarification that you can give as to who made the statement to you and how it will work will be greatly appreciated in my current unconnected location. Thanks, The English Passenger |
The email I have a copy of says that in your case you will get 4.8 years of PA supplements.
Just to clarify, as I understand it, AFPS 75 is not a final salary scheme. If you leave at 55 your pension consists of a basic bit, the same as a blunty Flt lt who serves for the same number of years as you, plus so many years worth of PA spine supplements which ensures you get an enhanced pension for being a member of the master race. In the case of the pension switch over, you get to bank the supplements you earned on AFPS 75, but you must still serve 5 years from going onto the spine. I'm certainly not an expert, but I reckon in your case, with 4.8 years done, your banked pension will be almost identical to a mate who leaves the RAF today having done 5 years on the PA spine. Given that Apr 15 is the earliest that the change will happen, I don't think you have much to worry about. |
Thanks Arty, any chance of a copy of that e-mail you have via PM? If not coz it is on DII, PM me and I will give you my DII address if you would rather forward to that system.
I am not overly concerned yet as almost everyone I speak to that is connected to the FAFPS is fairly certain that it won't be ready for Apr 15, as that is stated as an aspiration date and is the earliest it will happen, not the set in stone date yet. Also, anything I get from the 5 years on PAS pension wise will be a bonus.. I stayed for a specific reason and the FRI and the salary over the last few years has been better than some of my contemporaries who left the service and then were made redundant have been getting! So I guess I made the right choice for me regardless. |
GreenieLynxPilot -
First of all, please do not assume that everyone on here (and everyone affected by these changes) holds a commission. Secondly, those that opted for the 05 pension made no "assumptions" other than their future fitness to serve to age 55. The figures given on the pension calculator were sold as fact, so regardless of whether the individual would be better off or not that option was a "sign-post" of loyalty and an intension to serve to that age. We all have sympathy with those that have been dealt with poorly, but just because a significant number of Aircrew In Training were stiffed it doesn't make Xiapete's suggested scenario any less deserving of sympathy or correction by our organisation. Why is it always a "race to the bottom"? |
FAFPS and FTRS - a silver lining?
I've just found this little nugget in the Hutton Report regarding pension abatement...
Flexible retirement should be encouraged and abatement of pensions in its current form for those who return to work after drawing their pensions should be eliminated Let's hope LJ |
LJ the briefing team said exactly that this week, FTRS isn't likely to attract pension abatement. Of course in future the chances of a pension before age 60 will be nil so it won't be an issue!
|
Have yet to read the DIN fully, but when I asked the consultation team on Wednesday what those of us on PAS could expect, he could not be drawn. NOTHING has been decided. I'm on '75, with a year left to qualify for my 5 yr PAS get out. If they make me worse off, ill have to leave to start a second career, either flying or in the aviation related industry. A lot over concentrate on Career Average, but miss Revalue From the rest. It changes the indexing compounded to the pot each year under the new scheme. All they can say is that it'll still be good, just not 'as good'.
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Blagger
The majority of FTRS posts can go to 65 now, so it should make a difference for some. Thanks for the quick reply BTW. LJ |
Abatement (FTRS)
Leon,
You're right. That stealth para could form quite a bit of new thinking. |
Could someone explain (In simple terms please) how the current pay freeze effects pension rates? I understand that whilst we are in a pay freeze my AFPS 75 pension rates have been frozen (Looking at tables at RAFComm for 2010 and 2011). Am I right in thinking though that pensions in payment have been uplifted by CPI 5% or so (If so where can I see these rates or are they not generic?). Will I ever see the increases being given to pensions in payment with regards to my future pension or am I losing out by 5% ish this year compared to a current pensioner OR am I missing something? (Most likely)
|
The pension codes for those retiring this year are on the MOD website. They are worked out on spot rates on the pay scales for each rank (which is why everyone in the same rank leaving in the same year with the same length of service gets the same rate of pension) so, as there have been no pay rises for some time, they have not changed. This year's pay raise was limited to entry grades, so I doubt there will be a new pension code this year either.
Once a pension is in payment, it increases in line with the agreed inflation factor which, now, is the September rate of the Consumer Prices Index. That was 5.2% for September last year so that is the rate that will be applied this September. If you left last year, remember that the first year's increase is proportionate - so, if you left last April you will get the full amount, if you left in October you will get about half the increase and if you left at the end of March you will not get an increase in April. The freeze in the pension codes is causing a 'pension trough'. This means that someone leaving in earlier years is getting more than someone leaving now because the pension in payment has risen by the inflation measure year on year while the pension codes have not. To find out more about pension troughs visit our website (Forces Pension Society - Fighting for the Forces and their Families) and read the FPS leaflet on the issue. |
Telegraph this morning - I'm assuming this is the new post 2015 model?
Armed Forces must wait five years longer for pension - Telegraph |
Yep, although hoping those of us with large accruals up to 2015 will get our representative IPP at 38/22.
What is interesting is the increase in IPP isn't as bad as I was expecting, which makes me wonder what they are planning for flying pay and lump sum gratuities post 2015. |
Leon, You're right. That stealth para could form quite a bit of new thinking. The Press Association: Pension plans white paper delayed The Government has delayed publishing its plans for a single flat-rate state pension. Yet more uncertainty. |
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