Pension Scheme Austerity Measures

Apologies if this has been covered already but a quick search hasn’t yielded this specific discussion.

Ok , a mate and myself were talking pensions and the current austerity measures the other day and the discussion meandered in the direction of lump sum payment, commutation and immediate pension (at age 40). The crux of the discussion centred on the MOD stopping the immediate lump sum and pension and only making payments to personnel at age 60 (AFPS 15??).

I have since heard a duty rumour (unconfirmed but worrying all the same) that this is a real possibility and that the MOD are indeed looking at the legalities of the change.
My honest opinion is that all those pensionable personnel (VEng, LE Officers etc) will bail out immediately thus solving the manning / redundancy issue in one fell swoop.

Not being a pension guru and having experienced numerous changes to Terms of Service and Pension Rights without proper consultation by MOD, I was wondering if the MOD could impose such changes on those personnel already in the system or only those joining after the change is implemented?

Will the implementation of this change impact recruiting and retention? One of the big draws for individuals joining for a full career and mainstay of retention for those who see themselves as “pension trapped” was the lump sum and immediate pension. Without it will personnel join and subsequently stay for the duration?

Final question for the pension gurus out there. Will the change from AFPS 75 (Final Salary) to AFPS 15 (Career Average) impact personnel retiring around that time and the decision making process?

I am currently pensionable but need to make a decision whether to stay beyond 2015, if there will be a detrimental impact on my pension the decision will be a whole lot easier.

Thoughts please.
Chuffchart - I would strongly advise you to make no decisions without the full facts in front of you. Could the Government make such changes? - nothing would suprise me in respect of any politician, however, as you quite rightly say, it's rumour and anyone can start rumours. As to rushing towards the exit sign for LE offrs etc, you may find many are stuck with CEA and perhaps running would not be a viable option. I've seen/heard nothing in respect of what you suggest, I'm on 75 and will be running to the exit if your rumour is correct :). I don't believe it is quite so simple to amend TACOS in respect of pensions and think they would struggle legally to remove something which many signed up to many years ago - remember they had to ask you if you wanted to transfer to 05 and you were not forced to do so.
I agree you need the facts first.

It would be most unusual and unfair (and probably unlawful) to take away pension rights already earned, the usual practice is to respect those and began new conditions as and when the change is introduced. Even forcing people to leave an existing scheme could be tricky, but I've little doubt it is being tested as a proposal.

I'm not party to any work going on, so this is purely an armchair view. The Forces' Pension Society will be the people to ask.

The Forces Pension Society
Thanks for the swift response chaps.

You are absolutely correct no decision will be made without full knowledge and subsequent analysis of all the facts. I am just interested to see if anyone else has heard any worrying rumours regarding the matter and what the consensus for "actions on" following implementation would be.
What I have heard discussed is the potential changes to pensions following the acceptance and implementation of the Government Pensions Review (Hutton) which if implemented were expected to arrive on or around 2015. You will have noted from the complaints within CivDiv that no-one is looking forward to having to pay more into their pension pot to receive less on retirement (The Police already have a Facebook page calling for Mrs May to be relieved of her duties). If the MOD accept the recommendations and look to implement them, I understand (my opinion only) that they would perhaps look to 'ring-fence' the pension you have already gained, changing nothing to it, but then have you begin a new pension on the revised terms. If that was the case, then for the majority who had already served to the point where they could retire if/when they wanted, it will make little difference. What it will do, I believe, is stress out those who have perhaps only completed 12-15 years service, who joined with a set of TACOS providing a lump sum etc at 22 years, but who suddenly would only receive 12-15 years worth of gratuity (if it was allowed to be paid on retirement). As always the devil will be in the detail if the MOD/Government accept Hutton's proposals. As the CofC recognise in spades is the pain that continues to come towards us all with austerity measures in place - pay freezes, lack of Adv Trg, etc etc etc. However, remember the pain is across society, not just the military (MPs are of course exempt any pain)
The Forces Pension Society are expecting to see the framework document for the pension proposals in November. As soon as we have them we will be putting an article on our website explaining what is planned and our initial reaction. We are part of the consultation mechanism and will be fighting hard to get the best possible deal for the Armed Forces.

I absolutely agree with the previous two contributors - get the facts before you act.

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