Offer To Transfer Pension - New Version

Discussion in 'Armed Forces Pension Scheme' started by Percy, Nov 25, 2005.

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  1. I have just received my new, green, version of the OTT. This time my details and length of service are correct. However, I was puzzled when I noticed that under the new scheme my pension payments took a bit of a nose dive.

    I found out that this is because the 74 scheme takes a mid rank wage as its basis whilst the 05 approach takes a current salary approach. As I am at the junior end of my current rank I take a dip. However, I intend to serve until the end of my engagement and somewhere between now and then my salary scale tips in balance of the 05 scheme.

    I share this with the forum since the OTT only takes into account the wage you are earning now not the wage you are likely to be earning when you retire/pvr.

    Grateful for any professional SPS comments.
  2. You are correct that AFPS75 is based on Representative rates of Pay whereas AFPS05 is based on actual DROP. Beware however that unless you serve to 55 you will not receive an immediate pension at the 18/40 point instead you will receive the Early Departure Payment (EDP) which is only worth 50% of your pension up 'til 55 years old and then 75% from 55 to 65 when your full pension is put into payment.

    AFPS05 does however have significantly better widdows pensions, talk to your RAO and use the Pension calculator, you can find it on Army Net.
  3. napier

    napier LE Moderator Reviewer

    Chap came to our place to brief us on this. Be very wary about transferring, in that the current (75) pension is enshrined in law and it would take an act of Parliament to change/remove any benefits - the new scheme is not. Are you willing to take the risk?
  4. Napier, what he meant was that the EDP (AFPS05's version of the Immediate Pension @ 40) was not part of the pension scheme and therefore could theoretically be subject to change. The pension under AFPS05 paid at 65 is a proper protected pension scheme.
  5. So, does that mean that a future Govt could reduce the EDP in favour of buying an aircraft carrier or two?

    I have always wondered whether pensions were sacrosanct - other than through Govt controlled inflation....?

  6. in_the_cheapseats

    in_the_cheapseats LE Moderator

    Don't do it!!
  7. Litotes, Yes I suppose. It is always emphasised that Treasury rules prevented MoD from paying a "pension" at 37/40 hence the EDP was not part of the pension scheme. However it is part of the package designed to keep personnel in the Army to around the 40yo point and to compensate them for not having a full career. From this you could pehaps take that if there were no incentives to leave early (economy bad outside) then maybe we would not need the EDP scheme.
  8. Not even got the old one yet. Nice to be on the Y List.

    I also agree with others, don't do it. If the Army is bringing something new in, it invariably means it will save them money.
  9. If anyone knows the webmaster from the MOD site, can they nudge 'em please? Pension calculator's a tad 'fooked'

    I did notice the comment on the green slip that the figures for the AFPS05 was based on a transfer max of 35 yrs pensionable service at the member transfer date (06 apr 06)

    It lost me at around that point....

    I shall however be sticking to the old system. mainly because I cannot foresee serving past the 22yr point. If i couldnt see myself surviving past it, i'd transfer.. but i do, so im not..

    i think.. :wink:
  10. It couldn't handle the truth and live with itself!!!!!!

    The pension calculator has committed suicide.
  11. I think we should hold a minute's silence in memory of a fine upstanding pensions calculator. Sadly taken from us by the onslaught of it's masters at MOD.

    it took it's own electrons to save us all.
  12. I held a minute's silence. I reflected upon its sorrow.

    I just hope the calculator fully commuted his pension prior to its sad departure so his spouse can live comfortably in her frail old defragmentation......
  13. Just as a point of interest i did my personal calculations on the pension calculator before its demise and the results showed that up to the age of 65 i would be in the region of £40,000 worse off with the new one.
    If you plan on dying or serving for 35 years then by all means transfer to the new one - otherwise don't.

    These people are worth speaking to for advice. we were visited by them and given a bloody good lecture on the overall differences, etc of the schemes. We had ours at 11.30am, not one Soldier whinged that they were missing Dinner, in fact, the Q and A session at the end lasted a further 1/2 an hour! That, as an indicator, should provide proof of how good these guys are.

    Worth looking into.