The Pension Debate

Discussion in 'Armed Forces Pension Scheme' started by pombsen-armchair-warrior, Jun 6, 2010.

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  1. Interesting article in today's Mail concerning 'unfunded pensions, of which the Armed Forces scheme is one. The article also indicates that the intro of AFPS 05 reduced the benefit from that provided under AFPS 75, but that the reduction, as with other 'unfunded pension' areas, may not have been deep enough.

    .. Armed forces (200,000): Pension age still 55, but those who quit early cannot claim until 65, not 60. Rate pension builds up at cut from 1/69th a year to 1/70th for ranks. Spouse's benefits enhanced. Old deal worth 39 per cent on top of pay; now 38 per cent.

    http://www.dailymail.co.uk/money/article-1284280/The-great-pension-debate-Pruning-cost-pay-go.html

    Interesting times ahead perhaps. What price an AFPS 11 or 12?
     
  2. I thought you got your preserved pension at 60! I've had nothing through to say different and was looking forward to my princely 3 Grand or whatever it is in 3 years time. Don't fancy waiting 8 years for it!
     
  3. Presereved pension at age 60 for AFPS 75, age 65 for AFPS 05
     
  4. 'Unfunded pension'? I was always told that the military salary was abated by 7% (I believe), thus taking into account the early drawing age of 55 (for those on a full engagement) and also to part-fund the arrangement.

    Or was I told a load of bolleaux?
     
  5. Used to be the Y - factor so not unfunded just not written down.
     
  6. I believe they interpret 'unfunded, as below

    About three million workers in the public sector are members of pension funds that exist in name only. Teachers, civil servants, health workers and emergency services staff are in 'unfunded' pensions, also called pay-as-you-go pensions. The money they and their employers pay each month towards pensions is used to provide an income for today's pensioners. Any shortfall is met by the Treasury, which also holds on to any surplus of contributions over payments.
     
  7. Unfunded means that the employer/employee contributions are used to pay current pensions, with HMT picking up shortfalls from general taxation. (Nothing to do with how amounts are calculated or other terms and conditions).

    A review is inevitable. It is highly unlikely that entitlements already earned would be affected. But it is possible there might not be an option to stay on previous terms.

    My guess is that they'll go for career average rather than final salary. But there would be far bigger potential savings from NHS, so the ray of hope is that it could take a while to get round to the Armed Forces, and the longer on current system the better.

    Edited to correct strange garble.
     
  8. Ahah. Every day a schoolday. Where did you get that one from, btw?
     
  9. Well I've got my pension so I'm all right Jack 8)
     
  10. Another review of the pension scheme could turn it into a right buggers muddle for the Armed Forces Pay Review Body to un-tangle. They are supposed to abate the x-factor to reflect the value of the non-contributary pension we all do or did enjoy. If there are three types of pension scheme (or more) which do they take into account? - something for BAFF and the AF Pension Society to keep a close eye on.
     
  11. No guarantee that there would be three types. Nothing to stop a compulsory move to new terms for all.
     
  12. Gawd no - I have three years left til I get mine; I pay £300.34 a month into mine! An' I'm in that list up there!