Future armed forces pension scheme update

Discussion in 'Armed Forces Pension Scheme' started by stinker, Aug 2, 2011.

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  1. Haven't seen this today but if you get out after 2015 looks like it will apply to you.


    1. An update on Public Service Pension Reform and its impact on the Army.


    2. All Regular and Reserve Forces personnel.


    • Lord Hutton’s Independent Public Services Pension Commission final report was published on 10 Mar 11 and the key recommendations as they affect the Armed Forces were:

    o ‘Final Salary’ pension schemes, like the AFPS, which award a pension based on length of service and final salary on retirement, should be replaced with a system that provides a pension based on a percentage of the salary earned in each year throughout an entire career. This is known as a Career Average Revalued Earnings (CARE) pension.

    o That the Normal Pension Age for the Armed Forces should be increased from 55 to 60. This does not mean that everyone will have to serve until age 60, in the same way that, at present, very few personnel serve to 55.

    o That members of existing pension schemes will be automatically moved to the new scheme.

    o Importantly, pension benefits earned up to the implementation date of a new scheme will be protected. For the years you have already served and until reforms are made, you will keep all the pension benefits you have already earned. These benefits will be worked out in the same way, you will be able to draw them at the same age as now, and they will be based on your final salary at the date you retire.

    • The Government has accepted Lord Hutton’s recommendations on public service pension reform as the basis for consultation and is expected to respond by the Autumn with direction for the way ahead. Once this direction is received, detailed development and design of new pension schemes is expected to begin.

    • The Government has confirmed that public service pensions will remain among the best available. The MOD is committed to ensuring that the future AFPS remains amongst the best of these schemes and has made its position clear - that a new pension scheme must be: acceptable to Service personnel; highly competitive in relation to other schemes in recognition of the Armed Forces’ unique commitment and sacrifice; retention positive in pulling personnel through to key career points and aligned with the development of the New Employment Model.

    • The Government’s intent is to introduce new pension schemes in around 2015 but it may take longer for the Armed Forces because of the complexity of our current schemes. Additionally, the Government has agreed, in principle, that because the Armed Forces do not have Trade Unions to represent their views, the Government will consult on proposals alongside, but separately, from the other public services. A Future Armed Forces Pension Team has been established within the MOD to take forward this work.

    • It is recognised that the current pension schemes are not well understood and therefore the implications of a Future Pension Scheme may be unclear to many personnel. Therefore, DSPS(A) has developed a presentation on the current pension schemes which will be delivered by RAO staff at unit level in the near future. A further presentation is being developed on the Future Pension Scheme.


    3. Public service pensions are increasingly unaffordable as people are living longer. The Independent Public Service Pensions Commission, chaired by Lord Hutton, was set up to conduct a review of public service pensions, (including the Armed Forces Pensions Schemes - AFPS 75, AFPS 05 and the Reserve Forces Pension Scheme) and to make recommendations to the Government that are sustainable and affordable in the long term, fair to both the public service workforce and the taxpayer and consistent with the financial challenges ahead.

    4. The Commission’s final report was published on 10 Mar 11 and the process to reform public sector pensions has begun. DIB 18/11 was published on the same date and AG wrote to the Chain of Command on 14 Mar 11.

    5. The Government has confirmed that pension benefits that have been earned up to the introduction of the new scheme will be protected. Because of the complexity of the Armed Forces pension schemes, the precise detail is to be clarified with HM Treasury. As soon as more is known then you will be informed accordingly. It should be noted that these changes will have absolutely no impact on pensions already in payment by the time a new pension scheme is introduced.

    6. A MOD Future Armed Forces Pension Team has been established, which will consist of 3 serving officers (one from each Service) and 2 civil servants. This team will be responsible for the development of the new pension scheme and will work closely with the New Employment Model programme which is developing sustainable, competitive, effective, fair and appropriately targeted financial Conditions of Service for Armed Forces personnel.

    7. A further update will be given in the Autumn once more detailed information is available on the way ahead.
  2. We are expecting to see a framework document in November. Keep and eye on The Forces Pension Society for further information.
  3. Just like I said in the thread about teachers.
  4. Thank fcuk i'm out next year. As a wo1 i get pensioned on final salary. If that new scheme had been in place 22 years ago my CARE would be roughly £27k ish. A far cry from a final salary pension for WO1 level 7........
  5. It never rains but it pours! I am also out in 2013 as a WO2 (I would say thank fcuk but the grass is never greener) but a lot of friends are not including a member of the family, this may be the icing for some of them, as the pension in its current form was what was keeping them in. Just keep chipping away and they will start leaving in droves!
  6. As I posted in the thread about teachers. If I'm forced on to the new NHS scheme I'd lose £40k off my lump sum and £7k off my yearly pension and have to work an extra ten years.
  7. It will be interesting to see where this goes (in particular whether it remains non-contributory as Hutton recommended I believe).

    As final salary schemes AFPS75 pays out more earlier (though at a representative rank/salary rate rather than true final earnings) and AFPS05 pays out more later, at a true final salary rate.

    For those already serving we had a choice with 2005 to either stay on the old scheme or move to the new – it sounds like we won’t get this option next time (though fortunately it will probably be too late for me).

    How they will change these schemes and still remain highly competitive and retention positive while keeping joe public on side and avoid accusations of gold plating will be a good juggling act.
  8. daywalker

    daywalker LE Reviewer

    I fear all this will lead to is the loss of thousands of our most experienced soldiers, I for one won't be hanging around post 2015 if my current pension gets kicked into touch.
  9. I had hoped my children would follow the well trodden path into the forces but the way things are going i'm increasingly likely to suggest they look elsewhere & opt for whoever has the most favourable conditions (Yanks, Canadians, Ozzies at a guess), inc aftercare for veterans that have been put out to grass.
  10. My trade is on its knees at the minute because of serious manning problems. Many of us are serving extensions whilst the corps converts its personnel to VENG.
    In addition to what could be a 3 year pay freeze and a 3 year promotion freeze, this could be the final nail in the coffin.
    I regularly witness younger members of my trade come to the realisation that they are not going to achieve anything career wise by slogging away, and either leave the Army or transfer elsewhere within the Army.
    If you then pull the rug from under those serving extensions via their pensions I envisage a mass exodus.

    The fact that people are choosing to leave in high numbers amidst the biggest global recession since the 1930's speaks droves about peoples perceptions of what was once considered to be a fine career.
  11. Well I have been pensionable for the past 6 years and have remained serving for two reasons - one to promote further and increase my pension and secondly because, despite a pay freeze, we are still pretty well paid.From what I have read above, by 2015 my pension already earned is preserved and will be paid to me immediately if I leave post 2015. Anything earned post 2015 (or the inception date) will not be paid until aged 60. If this is the case I am not too bothered, I had been led to believe that anyone serving post 2015 will forgo any form of pension until aged 60. If this was the case there would be no LEs or VEng left serving 1 Jan 15. Am I reading this right?
  12. While we have yet to see the details, I'm pretty sure that the inevitable legal challenges if the govt went with what you fear rather than what you assume will keep you safe-ish.
  13. So, Cams and the threepenny bit sucker are shafting the lads and lasses to keep the ******* in trim and their second BMW.
  14. This paragraph indicates that any pension earned up till the date of this new pension will be honoured in the original way. That is certainly the precedent.