Pension Reform Bill - effects on TA (SERPS) Pension

Discussion in 'Army Reserve' started by TangoZeroAlpha1, May 8, 2013.

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  1. If my reading is correct the new Pension Reform Bill will be doing away with the Second Earnings Related Pension Schems (SERPS) by 2016. What impact will this have on all of us long serving TA officers and soldiers?

    Here is my understanding...

    We all paid our National Insurance Contributions (NIC) in our civilian jobs didn't we? (Nods of head in the affirmative). Then when we joined up into the TA (or UDR/R IRISH HSPT) we also paid additional NIC (deducted at source) which I was told by a wise old Pay Corps Sgt Maj was 'Contracted into SERPS so you will get a bigger state pension when you hit 65 laddie".

    So... me thinks that now, 'by a mere stroke of a pen' that in 2016 I will and you will, loose that little nest-egg enhancement to the state pension that I/we have paid into all these years and were looking forward to when we retire and start collecting our long awaited and long contributed too state pension with its nice little SERPS top up!

    Wrong! By 2019 when I start to receive the state pension the Treasury bandits will have stolen it from me/you back in 2016.

    Or am I loosing the plot... please tell me I'm wrong?

  2. Regrettably I do not think you are wrong ... as I understand it ... and has been mentioned on other threads a lot of people are going to be worse off under the " New " State Pension than they would have been if their final State Pension was based on the " Old " system which included SERPS etc ... linky ... and external linky ... State pension overhaul to leave most people worse off - Telegraph

    Edited to add

    Small extract from DT report

  3. The only people who will be better off are those that don't work or work on minimum wage their entire life. So yes, yet again the government has nicked your money.

    Edit. Damn sunoficarus beat me to it.
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  4. I yield to the noble gentleman
  5. Thanks chaps and chapesses! - I for one am prepared to 'have a go' to get this stopped for us miltary peeps! The Military Covenant, opt out clauses in the bill for service personnel up to 2016, petitions etc - lets throw the full weight of ARRSE at them...

    Time for another fight with HMG I think... look at the fun we could have!
  6. And they wonder why people have stopped bothered with savings and pensions.....
  7. Why should you be treated any differently to a civvy who paid NI on a second job?
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  8. No, forget it. If all the public sector workers have got nowhere. All the private sector schemes were nicked already by Mr G Brown, what do you reckon your chances are?
  9. sirbhp

    sirbhp LE Book Reviewer

    hopefully on topic , i was in the TA after regs for two year , do i expect a bit of a pension from them? they certainly taxed my earnings .
  10. TA only accrue pension when mobilised. Arguably the bounty replaces it and is a better financial deal considering the amount of days reservists serve
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  11. Depends on number of days served a year. Final Salary pension schemes are *really* expensive.

    I agree with your earlier point - there is no real reason to link TA and SERPS / State Second Pension etc - its just another job and some of the National Insurance Contributions fund these pensions. Most TA soldiers don't even pay NICs on their TA pay, anyway - the earnings threshold for NICs is too high.
  12. Not so.
  13. They can be really expensive but reserves are the type of employees who loose out in final salary schemes, generally they:
    Have few years service
    Leave before pension age
    Don't get career progression pay rises

    If the minimum 2 year qualification period is full time equivalent then they wouldn't get anything anyway
  14. Pensions are revalued in deferment and the two year vesting period is probably not applicable to AFPS.
  15. OldSnowy

    OldSnowy LE Moderator Book Reviewer

    The original poster was VERY badly advised by the RAPC. Mind you, anyone taking financial advice from a SNCO deserves all they get IMHO.

    What I, and many others did, was get real advice. This was of benefit in two ways. Firstly, I found that the TA pay was usually enoug to take me over the limit for NIC payments -or rather, I was paying the maximum already, so all the NIC that had been automatically stopped at source by the Army was refunded each year (The 'Maximum' NIC was stopped a couple of years back, though, so tough luck now).

    Also - as it was non-pensionable, it was quite in order to take out a private pension and pay an up-to-a-maximum percentage of one's TA pay into it - and as it was a private pension, it was tax-free - or rather the nice taxman topped it up each year at whatever rate I was paying - usually 25% or 30%. I did this for many years, and it is now sitting waiting for me to cash it in when I hit 60, or 65, or whenever annuity returns go back to something decent.

    So no, don't 'attack' the Revenue, or whine - they'll point you to the many Reservists who used their bonce. Sorry to appear harsh, but that's the truth.
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