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.

Downsizer

This is exactly what the consultation period is about; trying to find where to put an IP/EDP. As I understood it, there has been no decision yet about where that point may be, but what they did say was that this point might be later than it is currently - say 22/42 or 30/50 or something like that rather than 18/40 as it is for AFPS05.

I hope that helps?

Clott

As Cpl Clott said there will be an EDP point on the new scheme it just hasn't been decided when it will be. Given that much of the new scheme's framework has been set down by Lord Hutton, there still remain some discretionary elements that the MoD can influence and one is where the EDP should be. This is one of the things that the FAFPS Team will be consulting on. The options they are looking at are 20/42; 21/43; 23/45. The 30/50 point is not being considered in the Consultation Exercise. The briefs that are being delivered at the moment are some kind of preliminary to the formal Consultation Exercise which will start once the Consultation Document and an online survey have been released which should be sometime this month. No doubt there will be a big Internal Comms push on it.

With regards the new Normal Pension Age of 60, if your TCOS mean that you can only serve to 55, then you would be able to draw your FAFPS pension at age 55, but at an actuarially reduced rate, along with your protected AFPS 75/05 pension. The change of TCOS to allow service to 60 is not in the gift of the FAFPS Team, but is, I believe, being looked at by the NEM Team.

Rev

Reverend

You speak wise words, sir. That is exactly how I understand it as well. The Navy type that briefed us said "Hand on heart, no decision on what the future pension will exactly look like has been made" (or something along those lines). He went on to tell us that this is what the consultation is about and the "focus groups" would inform the variables that they are allowed to change within the new scheme.

NEM is also an area that is wide open. I know that TACOS changes are likely just like the FTRS guys who were recently told they could work to 65 (vice 60) as long as they're fit and healthy and their commitments are renewed. I know they also have issues with FTRS and AFPS05 - I would expect this to be fixed as reccomendation of the recent future reserves study. As it stands at present, most are FTRS75 pension earners as I understand it.

I'm optimistic that things won't be as bad as some would have us believe; but it doesn't stop some of the backstabbing wackners that get promoted as part of the Exec Stream (or whatever it's called).

CPL Clott

So, if they're going to move the EDP/IP to say, 22/42, where does that leave those of us on AFPS75? Does that mean we have effectively been extended until 22/42 from 16/38? Surely a 6/4 year extension is such a radical change to people's terms that they can't force that upon us?... Or is this yet another redundancy by stealth method in order to get people to leave without paying them a bean...I despair I really do.

If that is their thinking, then it's flawed. Because anyone on AFPS 75 who is already past their IP point and feels like they are about to be done over will just leave before the new scheme comes in to play, and the MOD will then have to start paying out. Hardly a good way of saving money - and given the numbers of people I know who are keeping a very close eye on things and are prepared to jump in 2014 - it will cost them a fortune. If they really want to save money in the short term the smart thing would be to cause as little damage as possible and encourage people to stay thus catching them in any new scheme.

Well, I'll be on my bike if they monkey with my pension to make my PAS Pension worse post 2015:=:ugh::mad:

FJ2ME

If you're on a PC on AFPS75 or 05 your exit dates will stand, however if you're SSC and switching to PC after 2015 then they will probably insist on a new exit date. For an OR then I'm not so sure as they may link it to promotion - which is not unusual for officers either as I had to waive my 22/44 point on AFPS75 when promoted after my 41st birthday.

Also, as Cpl Clott says, any AFPS75/05 pension will pay at the rank you retire at AFTER 2015 - not the rank you are at on 1 Apr 15. The rest will be paid on the FAFPS rate (whatever that might be!).

I hope that helps? I for one would suggest that you don't throw away an immediate pension at an option point, however, if you have an option before 2015 then you may want to consider it once FAFPS becomes clearer (for better or worse).

LJ

"AFPS05 is too good to be true"

A comment I wished I'd taken notice of! When 05 was coming in I was approaching 40 and 22 years service and not sure if I wanted to stay in the mob or not. Sitting firmly on the fence AFPS05 pushed me off onto the side of staying in. In my view, and that of many others, the new pension was designed to get people to commit to the service till age 55, rewarding them with a hansome pension for doing so. I was happy to commit to the service, I saw it as a fair deal. I'll stay till 55 and you make it worth while. Others who were unsure about this committment, rightly so, remained on AFPS75. If the recent DIN is correct, and assuming I have got this right, those that committed to the service and transferred to 05 will be worse of under FAFPS than those who stayed on 75. It appears that loyalty counts for nothing. I must be getting synical in my old age and unfortunately I have 11 years to do :eek: For those that stayed on 75 the difference in my case is approximately 3k a year and 10k on the gratuity :D I still live in hope that this dicrepency will be rectified, please don't laugh :confused:

doesnt it depend on where they set the ipp for the new scheme? surely as pas, you could pvr at the new pas point and have very little change to your pension?

Unfortunately I don't want to PVR. So if I stay in till 55 as planned I will be worse off than someone with an identical career that stayed on AFPS75:ugh:

Had an interesting brief from the AMP Briefing Team today. Well when I say interesting, I guess it's all relative. However, on the thorny topic of pensions - ironically, not the most prickly issue of the day - they did suggest that although the date for the new scheme was planned to be 1 Apr 2015, the complexities of introducing it meant that 2016 or 2017 was far more likely.

That's the second briefing I've been to where that very same thing has been mentioned, the first briefing being what I would regard as an impecable source. So given that benefits at the point of transition will continue to grow with rank until you leave i.e will reflect promotions and increments rather than being totally frozen at the transition level, it might give people a couple extra years to sort their planning out.

As I'm sure many would agree, the later they introduce it the better :ok:

Out of interest, what was this most prickly issue?

"In my view, and that of many others, the new pension was designed to get people to commit to the service till age 55, rewarding them with a hansome pension for doing so. I was happy to commit to the service, I saw it as a fair deal. I'll stay till 55 and you make it worth while. Others who were unsure about this committment, rightly so, remained on AFPS75. If the recent DIN is correct, and assuming I have got this right, those that committed to the service and transferred to 05 will be worse of under FAFPS than those who stayed on 75. It appears that loyalty counts for nothing. I must be getting synical in my old age and unfortunately I have 11 years to do For those that stayed on 75 the difference in my case is approximately 3k a year and 10k on the gratuity I still live in hope that this dicrepency will be rectified, please don't laugh "


This is exactly what concerns me. I opted to join the 05 pension in anticipation of serving to age 55 and based upon the figures given by the RAF itself it made sense to do so.
Would there be any basis upon which those who will be negatively affected by opting back then for 05 could demand to revert to 75? The benifits from swaping have been taken away by the very firm that told us on the Pension calculator that we'd be better off doing so.

Rank parity between 22 yr RAF Flt Sgts and 22 month Army WO2s on various Joint units.

At the FAFPS presentation that I was at someone asked the same Q; the answer was "it was a one-time offer to swap and no you cannot revert back to the old scheme as it is closed".

CPL Clott

Gah! I still can't see how that is legal*

1. Company offers pension deal A giving X, or pension B giving X plus 10%
2. Person signs up to pension B (no brainer as planning to serve to 55)

7 years later Company rips up all previous meaning that pension B is no longer obtainable to those that made positive choice based on Company figures, so it's now worth LESS than the original pension deal A, that they wouldn't have moved from if the Company hadn't made it benificial to do so.


How can that be right?


* moral

In a similar fashion, I will be interested to see what they do about AVCs which were tied into the respective schemes.

Bootscooter

You don't know if FAFPS is going to be worse than AFPS 75 though. As I understand it, no one does. Also, if you jumped from (AFPS) 75 to 05 and became PAS, then ALL of your pay is pensionable under FAFPS anyway. If you're not PAS but joined at <21 years of age I suspect that you will still do better than 75 which was pensionable for service after age 21. 75 was only really better for those that decide to leave before age 55 and by the sound of it you plan to do that - so I suspect, but don't know for sure, that your FAFPS and 05 pension combined will be better than 75 was for you?

If you know what FAFPS is going to pay then great, can you share it with us 'mushrooms' in the dark? :ok:

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.

Clott

You're right of course, none of us know the details but....

I joined at age 27, have done 16 years, do aim to serve to 55 at which point the 05 pension gives better return than the 75 hence my opting to change to 05. Sadly I'm not PAS.

I assume (yes, I know...) that as I will not serve to 55 on the 05 pension (because of it's replacement) I wont see the benifits of that scheme, and will be worse off than if I'd stayed on the 75 scheme.

I hope I've got this wrong....