Discussion in 'Finance, Property, Law' started by Pink, Jan 17, 2004.
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So whats all this about a new pension then? Any good or wait 5 years before deciding?
Its sh'ite! no immediate pension after 22yrs and a load more cr*p on top of that. This 'Government' decided the old pension needed overhauling and reforming to 'bring it into line' with Civillian practice so you know that those soldiers who decide to change over to it or in the future have to join it are gonna lose out big style.
Apparently if you join up after 2005, you will be automatically placed onto the 'new' pension scheme (which apparently saves the Gov. £4 Bn per annum). If you joined up before then you'll be given the choice between that and remaining on the old scheme.
You've a fair chance of kicking the bucket before you even hit 65 and only a slim chance due to your age (if you complete the 22 and get booted out at 40/40+) of a new career.
It's a tough decision.
Sounds depressing, do we have such things as financial advisers in the army any more or do we lean on our admin office. This looks like a big decision that needs some plain expert speaking.
Pink - it is pretty scandalous. Pensions are the most complex area of finance there is so you are right to question the wisdom of the new scheme.
This lot may provide some help. http://www.forpen.co.uk/
Did you know it is a fact that only 14% of those that serve until 55 will receive a pension at 65 - The MoD know that those who have a full and rewarding career will not make it.
Do not serve past 22 years --- that is if you want to live - if you make it to 64 then you have a 70% chance of living to 82+
If you do not believe me see the NAO site.
Forgive me for being a techy nerd on this but it is a MASSIVE subject that will affect us all and will be worthy of a move to the Int Cell soon - certainly once I get my act together & draw all the info for digestion. It certainly needs a more balanced perspective than Soldier magazine presented recently.
Do not be misled into thinking you have "reserved rights" etc and "you are on the present scheme & so this will won't affect you" - it will, there is lots of small print in crucial areas. Watch out for the rate of EDP, Life Commutation (careful all you senior officers aged over 47), Preserved Pensions, Resettlement Grants, blah blah blah..."one sheet of A4" will be difficult because this has taken the Govt longer than WW2 to complete.
Take this extract from the House of Commons Defence Select Commitee First Report of Dec 03 as a guide:
nonetheless, personnel transferring to the new pension scheme will receive benefits of a lesser overall value than those remaining on the existing scheme
It should not be a surprise because we were all consulted about these new schemes weren't we ?
Question: how many replies did MoD receive to the consultation document on the associated compensation scheme out of the 200,000 serving personnel........22 ! (Para 89 of the HCDC Report). Perhaps we are our own worse enemies ?
Watch & Shoot.... Watch & Shoot !
I am at a loss to understand how the MoD could make substantive changes to the scheme without providing clear information and a process to provide definitive answers to questions.
But in reality, Grouping, I am not surprised about the poor response level to the consultation as these things never get a big reaction (until it is too late!). Also, it is unfair to expect people to use what little spare time they have to read an MoD consultation doc on a dry and complex subject (presumably with several cups of industrial-strength coffee) and formulate a response.
I have asked the Forces Pensions Society if they can help with details of who can provide definitive, offical, clear information and answer questions. They have confirmed that their site is the place to go for updates on the official position but they admit it is out of date at present and will be updated soon.
They say: 'The 'new pension' situation is very simple, basically the details haven't been finalised so it's not yet relevant. Anyway, even when it does come in, those already serving will have approximately one year to have a look at the new scheme and decide whether they want to change over. It will only be compulsory for those joining after it comes into force - and it will merely be part of their terms and conditions of employment. In other words, if they don't like it they shouldn't join.'
I have asked how people are to judge whether they should switch to the new scheme and whether they are expected to pay for their own financial advice in the absence of official support. The response was: 'I'm sure there will be advice given to serving personnel by the MoD nearer the time. It is, as I said, very early days. The finished shape of the scheme is not yet finalised and the rules that apply to the scheme have yet to be written. It's a case of 'watch this space' for now'.
Surely what is required here - and I speak infamously as an Infantryman - is a simple before and after - with the £ sign attached. I have seen some comparison tables, but they are utterly confusing and obsfucate the real issue. The issue being the Bottom Line. Once those who are approaching pensionable age see that they are being screwed to the floor then we can all kick off. Until that time we'll have to rely on rumour and long posts.
Trust me. The Government are not going to offer an improved deal. The bottom line is that it will be cheaper. And if its cheaper, it will not be as good.
Even a figure with a £ before it can be misleading; the value of a pension that escalates ( ie rises over time ) is MUCH greater than one that does not. The greater the expected escalation, the greater the costs/liability on the provider. There is another sneaky trick used, involving the escalation used. Wages ( National Average Earnings - NAE ) rise faster than prices ( Retail Price Index - RPI. ) Therefore a pension that escalates in line with RPI sounds fine, but it will, over time, represent a lower and lower proprtion of NAE.
I'm not sure the Forces Pensions Society actually have much "clout" with the MoD despite their very senior membership. There is a clear difference of opinion on the present AFPS between the Government and the Forces Pensions Society(FPS).
The Government believes this to be the case:
Our (the Armed Forces Pensions Scheme) scheme is one of the most, if not the most, attractive in the public sector Dr Lewis Moonie MP, Minister for the Armed Forces statement to the House Of Commons Defence Select Committee (HCDC) of 18 Dec 02.
The FPS believe this to be the case:
"The GAD (Government Actuaries Department) survey on behalf of the MoD is selective, superficial, subjective and partial and cannot be relied upon as a reliable source of evidence to support the Ministers claims. FPS (The Forces Pensions Society) on the other hand has carried out such subjective, impartial benchmarking, and our independent actuaries shows that the AFPS (the Armed Forces Pensions Scheme), in its core benefits, is at the bottom of the public sector league tables. The FPS written reply to the HCDC regarding the comments made about the AFPS.
This difference of opinion was emphasised by Brig Carter ( a member of the FPS) in his statement at their AGM below:
members of the AFPS suffered because they had no nominated trustees, no established appeal procedures and no membership representation. The Chairman agreed and said this had been represented to the MoD during the consultation process of the AFPS Review. Minutes of the FPS AGM, chaired by Air Chief Marshall Sir Roger Palin, of 19 June 2003 refer.
In my humble opinion, as a simple infanteer too (bad knees, bad back (....bad liver!) with a keen interest in the medical discharge area) is that the members of the AFPS are being rail-roaded into a new, controversial and, in many ways, a far less attractive Pensions Scheme without insufficient prior consultation, with and specific details on the comparative financial effects.
The information system provided to date seems deliberately negative but this is not the fault of our own Admin personnel. As my Pay Sgt explained last week:
Sorry Sir, we arent allowed to advise you on this because I might later be accused of giving you incorrect advice & get the MOD sued, you must speak to a financial advisor
er OK, so will MoD pay for his services and can I have the details for him to advise me ?
No, Sir ........and no - the details aren't known yet
So there we go, it is as clear as mud to me.
More 2 follow later, I suggest this will make the Ops Room Panic Button later this year once people get to look at the figures.
Watch & Shoot... Watch & Shoot
What is all this about people not reaching the age to actually get their pension if they leave at 55 etc.
I have to admit that as a serving member of our glorious forces, I have found the pension thing a tad confusing as well.
The way it has been broken down to me and simplified, is that those that do not plan do do their full 22 years are better off staying on the current scheme. Those planning on doing the full term will benefit more from the new scheme.
Is that right or have I been told another load of cobblers?
The new scheme certainly seems to be better for you and your family if you plan of getting slotted before your 22 year point, i however dont, and with the info we've had so far, couldnt see any financial benefit with switching to the new scheme. I will wait until all the information is out and take some independent financial advice. The cynic in me however says that the government wouldnt do this and give more cash away, so the old scheme is probably better for my situation.
The current military pension is pretty good, especially if you do 22. I left a couple of years ago on an immediate pension, and it gave me the opportunity to look at jobs well below my military salary. Fortunately I did not have to take them and found a very comfortable niche in the IT world. It does however provide a very much needed lifeline when trying to find your feet in the Alien society that is civvy street. I have a comfortable second career and the pension now funds the various normal activites I always wanted to do but never had the time or money.
It was the pension alas, and not the love of the job, that took me beyond the 12 year point.
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