|
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.
|
“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. := :*
|
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.
|
"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.
|
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. |
Grim,
You're right, to an extent. You can transfer in and/or out of AFPS with relative impunity whether or not you have earned an IP/EDP and not just to QROPS (which are being clamped down on hard right now). There are Club transfers and Non Club transfers if you want to consider a more convention onshore route. Club transfers relate to shuffling your 'pot' into another public sector scheme such as NHS, police etc and Non Club, erm.. arent! You have to have left the service first and there are time limits that apply - bear in mind that the receiving scheme may not want to receive benefits. If you leave now, you can apply for your benefits to be transferred up to a year before they become payable or up to 6 months after leaving Service - there is an age limit if 64 (I'm pretty certain). Your transfer value is also going to be actuarially adjusted (downwards!) by factors such as Bond yields, gender, age etc so if an officer has a final salary 'pot' of say, £500,000, then he/she should not expect a similar amount going across into the new defined contribution scheme. On the surface of it, getting out of a scheme such as AFPS which faces uncertainty seems a good plan. But there are some serious drawbacks, such as losing a guaranteed value (not always more, but at least its guaranteed) so there are factors which are taken into account before arriving at a transfer value. However, as far as the FSA is concerned and from a regulatory and compliancy perspective, I would almost have to place on file a note from the client's doctor declaring him/her insane if I ever advised transfering out as an appropriate course of action. And then, the FSA would ask me why I engaged with an insane client! There are plenty of financial services organisations out there which would simply transact the transfer business and run. My default setting would always be not to and argue it from there. However ropey AFPS is looking, however increasingly diluted the benefits seem to be these days (and I can see many very vital, valid and valuable reasons for diversifying retirement investment options as soon as possible - especially for younger servicemen and women), AFPS should remain at the core of the overwelming majority of any retirement funding strategy. http://www.mod.uk/NR/rdonlyres/5908B...ngbenefits.pdf Ministry of Defence | About Defence | What we do | Personnel | Armed Forces Pensions Compensation and Veterans | How to transfer benefits in and out of the Armed Forces Pension Schemes As ever, take properly authorised and regulated advice that you trust before taking such a large step. Edit - A SIPP is useful if you want to diversify into more esoteric investments or if you want to, for example, buy a business property but a common or garden type Personal/SH pension is just as valuable - and cheaper - for most people and they usually have more than enough investment options, functionality and sophistication. You can always trade up into a SIPP when/if your fund size/personal needs warrants it. The underlying investment is the most important thing to address - ABC Fund which is performing in a certain way in a SIPP is identical to how ABC Fund performs in a Personal pension. |
I left the Air Force of my own accord a long time ago after almost 15 years reckonable service, before they paid a pension on that length of service. When it was introduced it was not back dated, I have no grumbles, it was my choice. I now live in the Philippines with a very modest other pension on a smallholding, have lots of good veggies, fruit and coconuts etc. Life is not luxurious by any means but it’s not bad either and I can well afford the local Rum or Vodka for my sundowner (mixer usually from my own fruit), I’m pretty laid-back; or was until I started reading this thread and now I’m furious. Over the years I have been following the outrageous injustices that have been piled one on top of the other on our servicemen and this just seems to have gone too far. :mad: I join the suggestion that the time has come for people to start making a lot of noise all over the place and turn-up the volume as far as it will go. A lot of very loud noise chaps!
|
Chugalug:
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? |
You have a good memory baffman, and yes you are correct I was against it. To be precise I was against the perceived need for it as I felt (and still do) that the responsibility for a Serviceman/woman's welfare is the direct responsibility of their Commanding Officer and the CoC beyond.
I seem to recall being told that naive belief is now out of date as Commanding Officers no longer have the powers that they had in my day and that you end up dealing with faceless bureaucrats and impersonal systems that require similar organisations dealing with them on your behalf. I paraphrase and probably have it not quite right, but the fundamental point, that the Powers of the Subordinate Commander are much diminished, seems to me not an explanation but a condemnation of the present system of Military Administration. HM Forces are not a plc (yet!) but disciplined Armed Services whose members are subject to Military Law, who must obey all lawful commands, and who forgo the right strike. The reward for all this is the so called Military Covenant, and like most politico sound bites is seen to be in reality a hollow sham, witness this very thread. The secret of military effectiveness is loyalty, upwards and downwards. Unless and until that be reinstated by the CoC then there will be no "contract", BAFF notwithstanding. When the first Air Marshal resigns in protest on behalf of his Service, his subordinates, or his conscience, then we may see that change. "What good would that do?", I hear you ask. You'd be surprised. You really would. Well I did say naive, didn't I? PS So what is BAFF doing on behalf of these soldiers anyway? |
Cheers Al - very useful documents and advice!
Would there not be an argument that money in your estate today (transferred into SIPP/Personal Pension etc) would be better as your family would have access to the full benefits should you die prematurely? On death, the old 75 scheme only pays out a half pension I think, to surviving spouses. If you could forgo that future entitlement for the lump sum equivalent to be transferred into your grubby mitts, would that not be better? After all, when I worked at AFPPA in Gosport I got talking to one of the actuaries - he told me that only 18% of Army personnel who complete a full career (>22yrs) survive to 65 to collect a full pension. Ergo, the secondary payment at 65 on the 05 scheme. With this in mind, would it be better for your family to transfer out? |
That's OK, Chugalug, but if neither of them give a sh1t???
Military Covenant? Don't make I larff? Look what's happening now re sacking a few days before pension entitlement. I can't see any Air ranks ever resigning on a pont of principle, because by the time they get there, they haven't any left unless it concerns "Me, ME, ME", just like Cabinet Ministers. Glad my time was up when there was still a bit of an Air Force and still some money in the pension pot!! Doc C |
Couldn't agree more about the Military Covenant, Doc, that's my point. As to:
but if neither of them give a sh1t??? |
FAFPS
Although the AFPS 05 scheme will be closed from the point of transition (no earlier than 1 Apr 2015) the Future Armed Forces Pension Scheme is promised to be the best on offer in the public sector (stand fast the judiciary who make up their own rules) and therefore in the pensions market as a whole. I accept that all the public sector pension reforms are inherently designed to make savings but some of the current, transitionary generation might actually find themselves better off than they would have been on just AFPS 75, as they will have all the accrued rights up to the point of transtion PLUS the additional benefits earned under the new Career Average Earnings scheme which will inherently be started at a higher level due to their seniority. I would suggest that this does not deserve the label of a 'ropey' scheme....
|
Hi Andie,
I'm not so sure that AFPS isn't looking ropey. Its still good, don't get me wrong, but by comparison, it isn't as straightforward, reliable or as generous as it used to be (maybe I should have made that clearer). If AFPS15 doesn't start paying out until aged 60 and if the EDP deal changes, those disadvantages alone might well knock the benefits to some of the career average aspects of it into the shade. The proof of the pudding is in NEM I guess..? There are also some workplace Defined Contribution schemes that are breathtakingly good. Yes, your money is exposed to market sentiment, but that is not always a bad thing, and when you have some employers now chipping in 5% anyway, and matching contributions massively more than that (I'm thinking media organisations in particular), the Defined Contribution landscape is changing. It seems to be making itself more attractive as the Defined Benefit (Public Sector) falls in appeal. Grim, Yes, you're absolutely right, that is one aspect. But you certainly couldn't justify cutting away based on that alone because there are so many more (I'm not teaching you to suck eggs, I know you're clued up). I guess, if you were a young Royal Marine who wished to get out after 6 years and instead, chase pirates around the Horn of Africa for BP and earn a fortune, then you'd have to suggest that here is a young client who is prepared to possibly embrace a little risk in return for possibly higher returns and more flexibility. If you had a middle aged client who was getting out after his time was up with terminal cancer, then the aspect that you mentioned might drive it to the top of the pile of items to consider. But you'd also have to bear in mind that once a personal pension fund was crystalised, it comes with a hefty tax charge if it is passes to your estate; it only passes over free of tax if it is not touched - the element that is not crystalised is free of tax, the element that is crystalised (ie; the amount you take tax free cash and - possibly - income from) gets hit with a 55% tax charge. But again, if you were an individual who had no dependents and weren't worried about inheritance issues, is that so important to you? But for most clients; people who have grafted for 22 or 36 years and who don't have a lot of other pension provision, who have kids still dependent, who have partners who have no pension provision and who don't have a high capacity for investment loss, you just would not suggest it. The default setting must always be 'no' and take it from there. Thats not to say it would never happen and of course, the client makes the final appreciation and decision, but I would be very reticent indeed to suggest to any client that they take the money and run. Thats me though I guess, the trick is not overly influencing a client with my own personal feelings and always doing what is best and right for them - in the case of chopping out of a Final Salary pot though, I don't think the two are a million miles apart. It could be that a halfway house option is considered. Flexible Drawdown offers greater flexibility to those able to demonstrate a secure annual income of £20,000. This ‘secure’ income will comprise of mainly State Pensions, but AFPS also counts. Those eligible for flexible drawdown will be able to draw any amount from their pension fund but it will all be taxed as income in the year it is taken.. so when do you take it - when your tax liability drops and just how much tax might you pay? Thankfully, military clients are trained to make appreciations and decisions based on objective facts and not sentiment, and they are quick to appreciate the pros and cons of a strategy. Finally, I know this area isn't frequented by idiots, but to remain on the safe side of my compliancy guru, I should point out that I've tapped that out as generic info and not advice. As ever, take properly authorised and regulated advice that you trust and remember that whatever might best apply to you, might not apply to the bloke sitting next to you in the crewroom - and vice versa, what he or she is doing might not aply to you. Those stats are really saddening by the way - I didn't realise the numbers were that low. |
How long, Oh Lord, how long...
....is the average length of time for a full military career person actually drawing their pension? I'm sure the figure must be out there somewhere.
In 1965 I remember my F-i-L pointing out to me the figure in the Pennant?? that the figure was 3.5 years. But I was young and thought that pensions were for old people. Scarely soon after ('98), I was one and the question arose again. No-one at the resettlement fora could tell me and the actuarial chaps from the suppliers shuffled their feet and suggested "somewhere over 5 years, but don't quote me". A low figure might make one think twice about some of the investment plans being floated at these seminars. Anyone have any clue? The Ancient Mariner PS I found grimweasel's figures horrifying as my Son-i-L falls into that category as a former staff sergeant in the Army. |
Some interesting stuff from the US?
Military Update: Active-duty retirees die sooner than reservists, actuaries say - News - Stripes Financial Frontlines® » How Long Will I Live In Retirement? Either way, steer clear of Bootle and get a taste for cider. BBC News - Life expectancy among pensioners highest in Somerset village |
FAFPS
I am very happy that under FAFPS I will receive a generous pension on retirement that I will not have contributed a penny to and will use the money this has 'saved' me to make other investments or to draw down my mortgage. Before we get into the oft quoted pension abatement issue, as part of the AFPRB's deliberations the 4% salary abatement is made to the civilian pay comparator to reflect the value of the Armed Forces pensions not the final Armed Forces salary. This is also only one part of a whole host of calculations and judgements the AFPRB make when setting Armed Forces pay and there is no direct link between the value of the abatement and the money that ends up in our pay packet. As has been mentioned on previous threads when the value of the abatement was reviewed 5 years ago and was reduced from 7% to 4% we did not see a corresponding increase in salary as a result.
|
And yet... Take a police officer who throughout his career never made it beyond PC, get's promoted to SGT just before the pension qualifying period and retires 2 years later on a SGTs lump sum and pension. He's then immediatley re-employed on one of the numerous Civvy police roles that aren't subcontracted (unlike the military) and therefore pay's him a decent wage. Add on to that a lifetime of overtime fiddled by attending an incedent 'just before shift change' - gotta finish the paperwork you know.... And you'll see there's a c*cking great scam going on in this country from people in uniform that are virtually untouchable.
Any politician got the cohones to take it on? |
Well this is happening. Under the AFPS75 scheme the terms for redundancy state an airman has to do 18 years to get an IP if made redundant. Two people I know are being made redundant at 17 yrs 364 days and 17yrs 363 days. Shocking IMO.
|
Downsizer it's OK according to a MOD official who was quoted as saying the redundancy compensation MORE than made up for the loss of the IP. Did he really think anyone was going to believe that?
Fag packet maths: Redundant at 17 year point gives (Guessing £80,000 inc £10,500 resettlement grant) sounds generous. Let's say that makes them 35 years old. So 30 years of missed pension payments until deferred pension kicks in: 30 x £7000 (Guessing again though not far off) + 3 x £7000 = £231,000 not inc uplift at 55! More than makes up NOT. This is a big betrayal IMO and makes me think if they can do this then nothing is sacred, it's not the fact there were redundancies or that people will always be just short when there is a specific cut off it's the fact that it appears on the strength of numbers as if it was a factor in the boards decision of whom to make redundant. |
Any thoughts on this from last Tuesday's MoD Defence Daily Update?
Some of the coverage also reports that soldiers have been made redundant days before they qualified for a full pension. We have been clear that the length of service was not a consideration in the selection of individuals for redundancy and we have worked hard to ensure that those selected for redundancy receive the best possible pension and compensation packages. This includes reducing how long soldiers would have to serve before they qualify for an immediate pension - from 22 years to 18 years for those selected for redundancy. This means many individuals will receive an immediate income for which they otherwise wouldn't have qualified. |
"....is the average length of time for a full military career person actually drawing their pension? I'm sure the figure must be out there somewhere.
In 1965 I remember my F-i-L pointing out to me the figure in the Pennant?? that the figure was 3.5 years. But I was young and thought that pensions were for old people. Scarely soon after ('98), I was one and the question arose again. No-one at the resettlement fora could tell me and the actuarial chaps from the suppliers shuffled their feet and suggested "somewhere over 5 years, but don't quote me". A low figure might make one think twice about some of the investment plans being floated at these seminars. Anyone have any clue?" Hi Rossian, The average life expectance for an officer leaving at age 40 is 45.5 yrs and for an other rank 43.6 yrs. This is means that people spend more time drawing their pension than they spent earning it - which you and I think is great but worries pension scheme actuaries to death. These figures are quoted at the Financial Aspects of Retirement briefs that the Forces Pension Society deliver on behalf of MOD. |
BAffman,
They SAID that. On the other hand, I can scratch my name on a screwdriver I "borrowed" but it still isn't mine. They say all sorts, but because they are politicians we know they are lying. Doc C |
Any thoughts on this from last Tuesday's MoD Defence Daily Update? Quote: Some of the coverage also reports that soldiers have been made redundant days before they qualified for a full pension. We have been clear that the length of service was not a consideration in the selection of individuals for redundancy and we have worked hard to ensure that those selected for redundancy receive the best possible pension and compensation packages. This includes reducing how long soldiers would have to serve before they qualify for an immediate pension - from 22 years to 18 years for those selected for redundancy. This means many individuals will receive an immediate income for which they otherwise wouldn't have qualified. |
Quote:
Some of the coverage also reports that soldiers have been made redundant days before they qualified for a full pension. We have been clear that the length of service was not a consideration in the selection of individuals for redundancy and we have worked hard to ensure that those selected for redundancy receive the best possible pension and compensation packages. This includes reducing how long soldiers would have to serve before they qualify for an immediate pension - from 22 years to 18 years for those selected for redundancy. This means many individuals will receive an immediate income for which they otherwise wouldn't have qualified. I'm sorry but in order to be in the field for redundancy wasn't one of the parameters time served? |
| All times are GMT. The time now is 08:56. |
Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.