FAFPS 2015
 

There's a briefing team doing the rounds on the new Future Armed Forces Pension Scheme (FAFPS), here's what I heard the other day. Feel free to add what you hear:

1. Those with 10years or less to serve will get protected rights to their old pension - also it will be for the rank they retire at and not the rank they hold at the 2015 point. (After thought was that there is a chance that staying on the old schemes might actually be a worse deal? Some bright spark thought that one up!)

2. Others will have to transfer after 1 April 2015 (note underline) and will have protected rights to their pension that will pay at the rank that they retire at in the future but at the frozen yearly accrual rate at 2015. The rest of their service will acquire a FAFPS pension. (Again, there is a chance that this pension may prove a better deal than staying on the old schemes for some individuals?)

3. Currently no idea of what FAFPS will pay but it will be non-contributary and also will remain competitive with other public sector schemes. It will be career averaging and those that promote faster will get a bigger pension even if they retire on the same rank as someone who has promoted slower.

4. Specialist Pay unlikely to be included.

5. There will be station based "focus groups" and surveys to complete for the consultancy period - no firm decision on FAFPS has been made on how it will work.

6. EDPs or IPs are likely to be paid later as people marry later, have children later and buy houses later (?!?).

7. No expectation that lump sums will be taxed in the future (they realise how massively it would affect retention).

8. New Employment Model (NEM) needs to tie in with FAFPS, so having it ready to roll out in 2015 is a very big ask!

That's all I learned but I'm sure others will take in bits that I missed. Please post what you learn so that we can all benefit from combined wisdom.

CPL Clott

Interesting and appreciated post. Regarding SP, I wonder how that will affect PAS, FTCA? These schemes factor in SP as part of the pension so will they survive 1st contact??

Good gen and TY

Don't believe that PAS is considered as SP.

Standing by to be corrected as always. :8

Thank you very much for the insight.

Any other info (or rumours) much appreciated from this isolated call sign. I'm sure others out of the loop feel the same

More info here and also it backs up my recollections. The online survey will also link from this site...Ministry of Defence | About Defence | What we do | Personnel | Armed Forces Pensions Compensation and Veterans | Find out about The Future Armed Forces Pension Scheme

Clott

That must be a first...
 

A helpful and informative post and, even more incredible, nobody has started bitching yet. I must have come to the wrong place.
Long may it last.
BV:ok:

Question for anyone with more information re protected rights with 10 years or less to serve.

Is this 10 years or less to full pension point, i.e age 55 or is it less than ten years left on your current pensionable engagement exit point, i.e 16/18 year point etc if you choose to leave then and not extend your service.

Many thanks.

I realise there is probably a clue in the title 'career average', but are there any indications yet if the career average element for those of us potentially stradling both schemes is an average going forward from the point of transition or if will be applied to our earlier service which should be covered under the accrued rights part? If the former, that will be one thing, if the latter I can see some eagle-eyed been counter making a bid to remove our accrued rights protection on the grounds that our earlier service would effectively be covered by 2 schemes simultaneously.

Agreed. But they've already announced that it's protected with less than 10 years to serve. So career average from 2015 = already top level Flt Lt = final salary pension?!? Albeit I might not get the last couple of years immediately.

ericthered7

It's 10 years until your full pension point wef 1 Apr 12 - so those 45 or older on 1 Apr 12 would not be affected.

Details published in 2012DIN01-063 - available on the intranet.

We will not know for certain that PAS will not be treated as SP until the consultation document comes out - but I would be surprised if it was. PAS was introduced for a specific reason and that reason is still valid.

Watch out for the consultation document and keep an eye on our website (www.forpen.co.uk).

Melchett,

Under FAFPS, your pension will be based on your career average from the date the scheme is introduced (from Apr 15). As you say, past service is covered by your accrued rights. It will only be those who join the Services from Apr 15 and build up only a FAFPS pension who will really be on a 'Career Average'. As for PAS, it is not SP therefore PAS pensions under FAFPS will be based on pensionable pay.

Rev

Melchett;

Devil, detail? The DIN wording which is important is; "Accrued rights will be linked to final salary on exit from the Armed Forces, not the salary at the point of transition.". However, anyone on '75 who anticipates a promotion just a year or so before the date of transition may well still be waiting to see how he/she 'straddles'!

Al R,

So if I get your interpretation correct, it may well be that those of us who are lucky enough to be PAS will get an accrued rights 75 pension based based on our final salary ( level 30 for Flt Lts like myself), plus a career average salary from 2015 to age 55 based on a very healthy average over those years under the new scheme. So it might not turn out to be too bad after all. It will prob be very slightly less over all as the FAFPS average will be less than a final salary one, but not by a significant amount?

I heard that index linking will happen from 65 rather than 55 as it is now

Depends when you draw the pension. I would recommend that many on here go and READ THE DIN! It has a handy flow table that covers indexation, then you get your pension vs IPP...

Download it off defence intranet, search DIN, within 3 clicks you can find out all about it.

There are at least two factors to think about when assessing the value of your pension: The size of the overall cake, and the size of your slice.

• Each year of service gives you a slightly bigger slice. Under AFPS75 this is capped at a maximum of 48.5%
• Each promotion increases the size of the overall cake.
• Each AFPRB pay award also increase the size of the cake (well - lets call it sprinkles on the icing).

As I read the DIN - someone who has accrued an X% sized slice of cake under AFPS75/05 as at 1 Apr 2015 will maintain that sized slice of any bigger cake, should they promote after 1 Apr 2015. And of course, all cakes are likely to grow a little with each future pay award ;)

Service post-1 Apr 2015 will start to earn slices of a second cake, which has no fruit or nuts, and no jam or butter cream filling. The recipe for this cake is based on career average earnings - but in the first year of service under the new scheme you will only have earned a 1.11% sized slice of this cake (or whatever accrual rate is eventually agreed upon).

The point is that this later period of service will no longer lead to bigger slices of the former, tastier cake - so there is absolutely no chance at all that anyone will be better off, unless the new pension is more generous than the one it replaces ... which it won't be.

Greenielynxpilot

"no chance of anyone being better off"

The spec aircrew guys who went PAS and that transfered from AFPS75 to AFPS05 in 2006 would probably disagree with that - they went from a pension between a Flt Lt and a Sqn Ldr to a Wg Cdr's pension (about £8-9k a year difference!!!). Now how do I raise my rose-tinted visor? :ok:

From my perspective I could end up with an AFPS75 pension (that's in payment), an RFPS05 pension until 1 Apr 15 and then a FAFPS pension after that - 3 pensions for the work of one!!! I wonder if I'll get 3 lump sums as well? :E

LJ

English Pax,

That would be my understanding, yes, subject to a raft of caveats of course and final confirmation when the scheme is revealed. Will it benefit you on PAS? Possibly. Career average (CARE) schemes tend to favour those who pay grades have peaked or which remain largely, unchanged - whereas a Final Salary scheme will favour those who get a great promotion towards the end of a career.

Bear in mind that its not just about the Accrual- it also depends on what the Revaluation rate is going to be. For some (those who have been receiving low-ish pay rises), the revaluation rate can be worth more than the accrual rate (it could be RPI/CPI + 1% for instance) because what you earned 30 years before is still hammered by inflation.

My point was more about those who may be promoted 1 year (under '75) before April 2015 and have therefore yet to nail 2 years pensionable service in rank.

What worries me most is what point the '15 scheme will start paying out a pension, particularly if you leave before 55-60. I fear that an IP under '15 is gone.