New Pension Deal

#2
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. :cry: :( :evil:
 
#3
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.
 
#4
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. :oops:
 
#6
Baddass said:
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.
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.

The Moral.

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. :twisted:
 
#7
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 !
 
#8
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'.
 
#9
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.
 
#10
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.
 
#11
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 aren’t 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
 
#13
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?
 
#14
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.
 
#15
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.
 
#16
Possible warning for all you future LE commisioning candidates out there.

When you go from OR to Offr, you are discharged and then re-enlisted, so if you do this after 2005 ALL THOSE JOINING AFTER THIS DATE WILL GO ONTO THE NEW PENSION SCHEME!

But hey, maybe the MOD will make a concession - NOT!!!
 
#17
Bavmarda,

the jury is still out on the financial details because the MOD have announced a new scheme without providing that key detail like ...the new rates.... "trust me guv it 'ad one lady owner, lovely lil' runner”.

A simple Infanteer understands this reality check :

BETTER OFF ?

In brief, if you are GUARANTEED a career in the Army to 55, you may be better on the new scheme because if you die ON DUTY as your widow will get a larger lump sum & pension. It is also better if you intend getting seriously injured ON DUTY but not for everyone (pilots etc). If you can’t GUARANTEE you will serve to 55 you may also be better off if you do either of the above and have a “recorded recognised relationship” with a partner (either sex).

WORSE OFF ?

If you leave before 55 and do not die IN SERVICE, you will probably be worse off if you go to the new scheme. The MOD acknowledge this if you read their papers (not easy I admit). You will be covered for injuries under the new scheme anyway even if you stay on the present scheme.

Presently your receive a pension at your IPP (immediate pension point -22 years soldiers from 18/16 years offrs from 21) which is being replaced by Early Departure Payments (EDP). The MOD state that the EDP WILL be lower than the present pension to fund other improvements in the new scheme (unmarried partners, widows etc). Unlike your present pension (once started) the EDP stays in issue at the same rate until you are 65 (it is not upgraded and indexed from age 55 which your present pension is). At that stage you will get a second lump sum & better pension (if you are alive).

Everyone who leaves before 55, and transfers to this new scheme, will no longer have the option for an increased lump sum by applying for “Resettlement Commutation”.

If you leave before your IPP (immediate pension point – less than 22 years soldiers from 18/16 years offrs from 21) and you will NOT RECEIVE A PENSION UNTIL YOU ARE 65 for that part of your service from a date tba. You WILL get a “preserved pension” based on your service before the change paid at 60. You have to Apr 07 to decide which to join, new entrants after Apr 05 will have no choice.

DECISIONS ……DECISIONS

It isn’t difficult for those with Reg C who are certain they will stay in to 55, join. Their only loss will be if they are 47+ and don’t want Life Commutation.

For everyone else, you will get a comparison of the values some time this year…this will be an easy decision too.

This is all on the MOD pensions website but in the margins: it is called wide consultation, considered debate and general approval by the service community.



Watch & Shoot Watch & Shoot
 
#18
BFBS 2 had a bit on it today and mentioned some figures. They said the EDP amount would be the same as the current lump sum but monthly payments less. The news broadcast was short however this was the main key to it.

:cry:
 
#19
I'm not in a BFBS receiving area but do not be mislead.

Much lower available Lump Sum (resettlement commutation is gone). Your pension (now EDP) is reduced by half from 40-55. It isn't accruing (suspended) index linking during this period (which happens at the moment) so you don't get the big step up at 55. Your pension from 55 to 65 is 75% of the present rate but this figure IS index linked. At 65 (if you are till alive) you get your second Lump Sum & go to the full pension you presently receive at 37 (offrs) or 40 (O/Rs).

None of this fine detail was trawled in the consultation documents.

Go to the Int Cell link ref pensions.

It's appalling - but hey, it's only money.
 
#20
I'm not sure I understand the precise nature of all the previous posts, but here is what I do understand (if what I have seen so far is accurate and is actually incorporated into the new pension scheme!).

1. The new scheme will NOT give any commutation at all.
The current scheme does. The amount you can get depends on what rank you and how old you are when you leave the services.

2. The new scheme will not beginning paying out in full until you reach 65 (this may go up in line with the national pension age, which is currently being reviewed to move from 65 to 70 years old)
The current scheme begins paying out a partial pension after 22yrs (ORs) and a full one once you reach 55.

3. The new scheme will be salary based, not rank. Individuals will get 1/3 of their final salary as pension.
The current scheme is rank based. Some individuals get slightly more that 1/3, some slightly less. For example, a higher level Sgt would be £853 a year better off on the new scheme but then he wouldn't be as he would not be getting as big a partial pension as is currently the case. (NB this is one of the grey areas to me - will the new scheme pay out any pension on leaving after 22 years?)
The current scheme begins paying out indexed linked and in full at 55. Those leaving before reaching 55, after 22 years or more, get a partial pension, based on rank and time served.

3. The new scheme does offer enhanced injury benefits and widow/partner benefits compared against the current scheme.

To add to that, the Armed Forces Pay Review Body have, to be blunt, told the government the new scheme is not as good as the shceme it is replacing and are appalled at the manner the government is treating the Armed Forces. (Those of you who have been 'in' for a fair amount of time will be much less surprised, if no less outraged!)

For your general information, I am led to believe that, contrary what Dr Lewis Moonie MP Minister for the Armed Forces stated to the House Of Commons Defence Select Committee (HCDC) of 18 Dec 02 that “Our (the Armed Forces Pensions Scheme) scheme is one of the most, if not the most, attractive in the public sector“, it is MP's pensions which are, in fact, THE most attractive pension in the public sector. What makes it so good?

Well, in laymans terms (I am uncomfortable with anything else!), I understand that for every year an MP sits in Parliament, he gets 1/40th of his salary as pension. Now that doesn't sound too much, does it?

Then again, consider the pension of an MP who sits for 10 years (2 governments if you like). That MP has now got a pension of 10/40ths - or 1/4 of his annual salary. Your bog standard MP gets about £37k a year. So an MP that manages 10 years in parliament can expect a £9K+ pension. If they did 22 years, they would get 22/40ths - more than half of their retirement salary. (You can begin to see why some people want to be politicians! Maybe I am in the wrong job after all!) And who can say they don't deserve it? All those junkets, long holidays, family friendly hours. Far harder work than risking your life and having your liberty curtailed. No question! Another little snippet for you - guess who awards MPs their pensions? MP's of course.

So, if you are a tad peeved about the proposed pension changes, contact your local MP, Sec Def, Chancellor of the Excheqour and the PM and ask them what their pension will be and when they will get it. Then ask why your pension is being reduced and eroded. Better yet, include the media on the distribution list of that letter!!