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Soldiers sacked days before pension date
Surely the MoD wouldn't have been so devious as to make them redundant just before they qualified for the immediate pension.....surely not...?
Anyone in a similar position in the RAF or other services or is this just the Army? Daily Telegraph Soldiers sacked days before pension date Soldiers who have been made redundant were sacked days before they qualified for a full pension, families of servicemen have complained. They have raised suspicions that the Army, which has just axed 3,000 personnel, targeted a number who were within touching distance of generous lifelong pay outs. One 40-year-old sergeant serving in the Royal Electrical and Mechanical Engineers was only three days away from serving 22 years and qualifying for an immediate pension pot worth £108,000. He will now have to wait until he is 65 to receive the pension. Parents of officers have also contacted The Daily Telegraph saying that their sons have been sacked just short of serving 16 years, at which point they would get an immediate annual stipend of around £12,000. They too will have to wait until they are 65. Diana and Barry Payne said their son, Richard, a major, had been sacked just 86 days short of 16 years’ service that included “life-threatening” operational tours of Afghanistan, Iraq, Kosovo and Northern Ireland. “To deny him a pension so close to qualifying is not only underhand, but undermines the ethos on which the Army supposedly prides itself. “While we understand that the Army has to reduce numbers in accordance with government directives, it is apparent that those selected for redundancy are the officers who are about to reach pensionable entitlement.” The Armed Forces pension scheme is seen as one of the more generous in the public sector with personnel awarded around 40 per cent of their final salary. Servicemen aged over 40 with 16 or 18 years’ service can claim an immediate pension and tax-free lump sum on leaving the Army and a second lump sum at 65. But Henry Witham said his son, Rupert, a major in the infantry, was just a year away from qualifying for an immediate pension when he was sacked. The 38-year-old soldier has served four tours in Afghanistan and received a steady number of good reports. Not only does he lose his pension but also the boarding school allowance for his two young children. “Enthusiasm and loyalty to the Army have been rewarded by the sack, purely on the grounds that a decent pension was due after 16 years of service,” Mr Witham said. “The decision is not being made on the grounds of ability, experience or commitment, purely on cost. It would appear that capable, experienced and dedicated officers are being sacrificed. His suspicions were further raised after 38 out of 50 of his son’s Sandhurst 1999 intake have been sacked. In the most recent round of redundancies announced last week the Army lost 300 officers in total, who are seen as they most combat experienced for generations. Brigadier Rob Nitsch, the head of Army manning, said that the sackings had been “determined by future manpower requirements”. “It is not the case that proximity to the date at which a pension would be paid was a consideration for redundancy selection.” |
Further to that quote from the Director of Army Manning, I think it is also argued that the cost to HM Exchequer of the redundancy lump sum payment in such cases exceeds the pension lost.
Do the financial experts here agree with that argument? |
I survived last Tuesday's announcement but had I been made redundant I would have left 3 weeks short of 16 years and would definitely have been much, much worse off. The redundancy payment is not even close to the loss of pension.
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“It is not the case that proximity to the date at which a pension would be paid was a consideration for redundancy selection.” Did somebody say "Military Covenant"? |
That's a bit of a poor show!
When I was in, I understood that staying in to the 16yr point was at the discretion of the officer. (So long as he kept it in his trousers, didn't take things which he didn't own and wasn't successfully breathalysed ;)) |
I think there is a hint of the Daily Wail about this article (an all-to-common trend in the DT these day. Harumph!). I f I had been selected last week, I would have done rather well by commuting my Pension to 55, avoiding a shed-load of tax.
It all depends on individual circumstances - and in the cases that were cited, were they all to be assimilated beyond their 22 or 16 year points? |
A friend of my sons in the Navy has been made redundant 5 days before his 12 year point. := :*
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Whenurhappy, surely it is irrelevant as to whether or not they were to be assimilated past their Pension Point. The rules for them were serve 16/22 years and get an immediate pension payable.
Very galling when all their pay reviews have had an adjustment made for the "free, non-contributory" pension the forces get and their terms were immediate pension on reaching entitlement. Potential 20+ year hole in that scenario now :( MoD more like a Business every day, at least HM Treasury will be pleased! |
The MoD/HMT has form for this.
Back in the days of 'Options for Change' a disproportionate number of those 'opted for a change' had less than a year to serve before qualifying for a pension. EG |
This point was made to the MoD, and I suggested that some measure of tapering be considered, ie; if you are within a certain period of your IP and if your redundancy is avoidable, then some graduated gesture be made to reflect the 'unfairness' and the disproportionate long term effect on your income in retirement. The response was on the lines of 'Well, we've got to draw the line somewhere' which I thought was pretty thoughtless, cavalier, disrespectful and heartless.
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"thoughtless, cavalier, disrespectful and heartless." Add, typical of the military ethos of 2012.
Certainly the redundancy lump sum, invested or used to buy an annuity, wouldn't come close to replacing the lost pension. |
Not in the least surprised. As long as the politicians are all right and not required to remove their snouts from the trough, the rest of us can f off in fine pitch!!
Disgusted. I have sent an abuseagram to my MP about this. Doc C |
Not much you can say [without the use of expletives] so sorry for those hard done by.
gr |
A parliamentary committee has been established to oversee the Military Covenant. Suggest you write.
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A parliamentary committee |
I did just over 13 years and received no pension, deferred or otherwise, but that was my call as I PVR'd (in a far off space time continuum of which we now know little), so no complaints there. This is a far different can of worms, smacking of financial chicanery rather than a measured attempt to slim down the Army with the least possible effect on its capabilities. tuc makes a good point and anyone affected should shout loud and clear about this "interesting" interpretation of the Military Covenant. I suspect that a similar treatment of the CS would get a swift response from their union. I take it that the military one of which we heard so much about some years back became a non-event?
Edited to add that there is not "a hint of the Daily Wail about this article" to my mind Wuh, so much as a DT one. The default trend of tarring the DM with every media piece with which one has reservations, no matter its actual source, smacks of a lofty sense of superiority which says more of those that use the construct rather than of the Daily Mail. Oh, I have I just done much the same thing? Ah well, what goes around comes around... |
Pensions
There is a lot of rubbish being peddled by media who can't be bothered to get someone who knows what they are talking about in military matters as usual
Some interesting, to me anyway, bits Officers service before the age of 21 doesn't count towards pension entitlement or amount for others it does Those being dumped before 16 years have lost serps because the service is contracted out and so denied that share of a state pension. But the Military pension which is supposed to replace it is denied them so they have paid those 15 or maybe 18 years for nothing, good trick what I lose £95 per week off my state pension because of the serps rule, and when I asked to pay into the scheme to regain the lost state pension it was not allowed. Strange you can pay into the state system on your own account for other situations but not the service case Someone senior in Torygraph today says it is a coincidence, I expect he is right after all he would't just say that to avoid public comment would he |
AL R - Is there not some widely unknown scheme where service people leaving before IP can opt to 'cash-in' their future pensions at 65, today (albeit for a slightly smaller sum)?
I have had a few mates that have done it under Qrops but I think you need to go non-dom for 4 years minimum (ie only 90 days in the UK per annum over 4 years). One chap did 12 years in the Army, cashed in his preserved pension at 65 for around £60K today, but with no future pension. I would say this would be a good idea for people that move abroad as money today is worth more than money in the future due to inflation and lost opportunity cost. Plus, a tax-free lump sum today means the money is IN the family estate and can be placed into a SIPP - then as an added bonus the government tops up the SIPP with extra cash depending on your tax rate (so a 40% tax payer has the government invest 40% extra of whatever he puts in) Obviously, AL R you would be better to advise on this. I have had a few people ask me about the scheme of late. |
I guess it's all part of the master plan to cut pension costs. Like this cunning plan:
Armed Forces must wait five years longer for pension |
Grimweasel - do you mean on top of any redundancy payment, withdrawing from the AFPS scheme, forcing them to hand over a cash value of your preserved pension so you can invest it in a SIPP with the appropriate tax relief uplift?
I'm sure someone will have thought of that and put some rule in place to get round it, it sounds almost fair :( edited to add that whilst you would lose out on the index linking, it would be interesting to see whether the index linking received when you finally got your pension at 60 outstripped the potential growth that could be achieved from an initial tax relief boost, compounded over nearly 25 years. |
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