RAF Pensions to change

[firestorm]

I would guess that making the new scheme a contributory one would be the way they'd look at making the scheme "more affordable" ...but no to you! Its the simplest way they seem to deal with the pension deficit issues, alongside adding extra years for less benefit and taxing commutations and gratuities.
Lets hope they don't cane you.
I wonder why MPs are not in the Hutton review?

 

[BJW]

Here's the latest rumour that i've seen. It's taken from an email i received yesterday that's been doing the rounds amoung the officer types.

"Pension to become contributary, the figure being discussed at the moment is 6% of your gross pay! However this is for people on AFPS-05 not AFPS-75. The reason being, AFPS-05 was an act of parliament and can be changed, AFPS-75 was by Royal Decree and we hold grandad rights and therefore cannot be changed. The downside is that, if you get promoted, it will be part of the package, to transfer to the new scheme."

Goes on to mention the possibility of gratuity being taxed too. Frightening times guys, 6% of gross pay is about £170 per month for me. No way i can afford the mortgage if that happens!

Isn't pay already abated by 3% to account for the 'non-contributory' pension? I am sure I read that somewhere official.

 

[Soon To Leave]

Isn't pay already abated by 3% to account for the 'non-contributory' pension? I am sure I read that somewhere official.

I think you're right. That seems to coincide with contribution figures I've seen banded about of 3%. My guess is there will be a 6% contribution less the 3% abatement leaving 3% to pay.

 

[meagain]

I think you're right. That seems to coincide with contribution figures I've seen banded about of 3%. My guess is there will be a 6% contribution less the 3% abatement leaving 3% to pay.

Yes the Pay Review Body abate the payscales to account for the benefits of a "non-contributary" pension, but there is a feeling that 3% is unrealistically low, to achieve a similar link to final salary in a commercial scheme a contribution of about 20% would be required. There is a similar move going on with various local government superannuation funds, with many people being asked to at least double their contributions.

 

[Climebear]

The Amred Forces Pay Review body last considered the value of the pnesion abatement in their 36th Report of March 2007.

They concluded the following:

With revisions to reflect changing circumstances, our methodology to determine the relative pension value and how we apply that value to civilian comparator pay remain appropriate given that the Armed Forces have noncontributory pension schemes;

• The value should be 4 per cent; and

• The value will be deducted from the civilian pay comparisons from 1 April
2007, which will be part of the evidence for our 2008 Report.

The full details of their findings can be found on pages 10-12 (inclusive) of their report. They used the following reports from Watson Wyatt Ltd to inform their findings:

Comparative Valuation of Armed Forces Pension Scheme Report 2006

Comparative Valuation of Armed Forces Pension Scheme - Appendices to 2006 Report

For those of us without the patience to wade through the whole report, the following is the report's management summary:

1.1 The aim of the comparative valuation is to compare the cost of providing a member of the Armed Forces with the benefits in the AFPS, as opposed to the benefits that would be provided to comparators in civilian pension scheme arrangements.

1.2 The results of the previous comparative valuation in 2000 (as set out in our report dated December 2000) suggested a reduction in the then current pension adjustment for pay comparability purposes from 7% to 6% of comparator pay. However the report also commented that future trends suggested an upwards move in the adjustment over time and therefore the AFPRB concluded that it would be reasonable to retain the 7% adjustment. A recap of the 2000 results is given in Section 3 of this report.

1.3 Since the 2000 valuation, there has been significant change in the occupational pensions environment. This was discussed in our report entitled Occupational Pensions Research” dated 4 November 2005. The main factors which impact the pension adjustment are:

 Changes to the Armed Forces’ Pension Scheme benefits - the changes to the AFPS75 have reduced the pension adjustment. The introduction of the AFPS05 has not had a significant effect on the pension adjustment as the overall value is similar to the AFPS75 (see Section 4 of this report).

 Changes to the comparator scheme benefits - the level of comparator benefits has reduced for officers but increased for other ranks based on the data provided (see Section 5 of this report). However, the database reflects benefits provided to new hires, whereas the comparative valuation is intended to consider the benefits for existing employees, and therefore the results have been re-weighted (see Section 9 of this report).

 Changes to the assumptions and methodology adopted - the main changes made have been a reduction in the assumed rate of investment return relative to price inflation and changes to the assumed rates of turnover. These have in general increased the value placed on both the Armed Forces and comparator benefits (see Section 6 of this report).

 Changes to the profile of the Armed Forces - these have had a minimal impact on the pension adjustment (see Section 8 of this report).​

1.4 The results of our calculations for the 2006 comparative valuation (as summarised in this report) suggest that a reduction in the current pension adjustment for pay comparability purposes to 4% of comparator pay for the next few years (assuming a uniform adjustment across all ranks) could be justified.

1.5 The pension adjustment resulting from our calculations for officers has decreased from 5% to 4% and that for other ranks from 7% to 4%. A range of adjustments could be considered if it is intended to use different adjustments for pay comparability for different ranks. For officers the range is from just below zero to 6%, for other ranks the range is around 1½% to 4½%. The full results on the proposed methodology and assumptions are set in Section 10 of this report and Appendix L of the technical appendices.

1.6 One key aspect of the methodology which, after discussion with the OME and the AFPRB, has not been changed is the treatment of pension payable after the Immediate Pension Point in the AFPS75. As in the 1995 and 2000 comparative valuations, 50% of such pension has been taken into account with the remainder being assumed to be compensation for a short career. A consistent approach has been adopted for the AFPS05 (see Section 7 of this report and Appendices M and N of the technical appendices).

1.7 It may be expected that the relative value placed on comparator benefits will reduce over time as a result of changes in the weighting (towards defined contribution schemes) and as more changes to civilian benefits are introduced for both new hires and existing members. This is expected to result in the pension adjustment calculated at future valuations tending to increase (see Section 11 of this report).

 

[firestorm]

From todays Scotsman-

http://news.scotsman.com/politics/Pension-pain-for-public-sector.6538999.jp

 

[Leckie1]

From todays Scotsman-

http://news.scotsman.com/politics/Pension-pain-for-public-sector.6538999.jp

Hi firestorm, not sure what is new in that link or what we are supposed to take away from it, seems like a load speculation by someone who knows about as much as me ?? I would question, how the hell that article made it into the public domain, cause its certainly NOT news.

On a side note, Police, FireFighters, Nurses, and other public servants ALL are allowed to serve a full pensionable career IF they choose AND IF they are not made redundant. So, how the hell can you start taking pension contributions off the new lads and lasses who join the RAF, when they are only signing up for 9 years, with NO guarantee of further service ????

Also, if my starting wage in the RAF had been £25,000 like what the greedy firefighters are on or £20,000+ like the Police, I would have been only too happy to pay into a pension scheme which gives me a MUCH better pension payout than I am on.

My point is this, The Armed Forces are NOT LIKE other public services, we are far more complicated when it comes to matters like this, and I can not for one minute see us falling into the same pension schemes as other civil/public servants. My reasons are, because no other public servants are getting shot at and bombed on a daily basis (see todays 2 who have died (RIP)) AND we don't offer a full career from day one.

I still stand to be proven wrong, and am not the only one. If they want to mess about with our pension, then I can only see one thing happening.........MASS PVR's, on a scale which would cripple the Forces.

Of course, all of the above is only my opinion, but until someone shows me an official document to the contrary, I stick by it.

But hey, please keep scouring the internet for Pension stories of doom and gloom, and keep posting them on eGoat.
I am sure your "I TOLD YOU SO" will be of great satisfaction to you, should we get fecked over DT_Xtremez_14:

 

[k3caz]

I still stand to be proven wrong, and am not the only one. If they want to mess about with our pension, then I can only see one thing happening.........MASS PVR's, on a scale which would cripple the Forces.

DT_Xtremez_14:

That I think is a massive understatement, I expect the forces to crumble if they touch any of the pension schemes. What would be the incentive for a long career then a solid gold plated wrist watch DT_Xtremez_30:

 

[Realist78]

Hi firestorm, not sure what is new in that link or what we are supposed to take away from it, seems like a load speculation by someone who knows about as much as me ?? I would question, how the hell that article made it into the public domain, cause its certainly NOT news.

On a side note, Police, FireFighters, Nurses, and other public servants ALL are allowed to serve a full pensionable career IF they choose AND IF they are not made redundant. So, how the hell can you start taking pension contributions off the new lads and lasses who join the RAF, when they are only signing up for 9 years, with NO guarantee of further service ????

Also, if my starting wage in the RAF had been £25,000 like what the greedy firefighters are on or £20,000+ like the Police, I would have been only too happy to pay into a pension scheme which gives me a MUCH better pension payout than I am on.

My point is this, The Armed Forces are NOT LIKE other public services, we are far more complicated when it comes to matters like this, and I can not for one minute see us falling into the same pension schemes as other civil/public servants. My reasons are, because no other public servants are getting shot at and bombed on a daily basis (see todays 2 who have died (RIP)) AND we don't offer a full career from day one.

I still stand to be proven wrong, and am not the only one. If they want to mess about with our pension, then I can only see one thing happening.........MASS PVR's, on a scale which would cripple the Forces.

Of course, all of the above is only my opinion, but until someone shows me an official document to the contrary, I stick by it.

But hey, please keep scouring the internet for Pension stories of doom and gloom, and keep posting them on eGoat.
I am sure your "I TOLD YOU SO" will be of great satisfaction to you, should we get fecked over DT_Xtremez_14:

I'm sure that this would be the last thing on Firestorm's mind!

 

[I`m Ron Burgundy?]

That I think is a massive understatement, I expect the forces to crumble if they touch any of the pension schemes. What would be the incentive for a long career then a solid gold plated wrist watch DT_Xtremez_30:

Agreed...even without a change to the pensions we all know that once the recesssion is over they will be back to a critical manning situation.

 

[firestorm]

Leckie once again grabs the wrong end of the stick, which is fairly hard to do when your head is planted in the sand.

If you've missed it in any of the previous posts I'll say it again. I hope your pension remains in tact, unharmed. In fact I hope it is enhanced, as you well and truly deserve it. Now if thats clear I'll address your points.

It is news for the simple fact it was in a newspaper in the public domain.

"Reports suggested yesterday he would almost certainly recommend significant increases in contributions from public sector workers covered by pay-as-you-go pensions to make short-term savings, affecting up to six million staff." You may ask yourself reports from where? Where was this story leaked from and why?

The public groups you quoted are not all allowed to serve a full pensionable career IF they choose. The public sector have been recruiting older people for some time for the simple reason that they can't complete their entire service and gain a full (and expensive) pension. It's much cheaper on the employer this way. Many of our trainees are in their mid 40's and can't do full term for a full pension.

The entrant rate for a firefighter is £21k, deduct from this the pension contributions and its much less than you say, "greedy" (not sure why you felt the neeed for an insult there?)

So you think the forces are the only dangerous places to work? I'd hazzard a guess that the families of fallen police officers and firefighters would say different, not when we are in a war zone, just back here doing our job.

If you think for one minute that this (or any) shameful government will convert their mindless platitudes into action to protect you then I think you may have a shock to come. They don't hold you in the esteem that I do.

I remember when they started to screw about with our pension, one I pay hundreds of pounds of my own money into each month, we said the same, "mess with our pension and i'll leave!" Well they did and still are but we're still here. Do you think they'd care if you PVR? Saves on further pension payments and redundancy, doesn't it?

Now if you think I'm showing some form of schadenfreude then, again you're sadly mistaken. You just need to wake up to the fact that if your pension was sacrosanct then why lump it in with the rest for review?

 

[Realist78]

!

!

Leckie once again grabs the wrong end of the stick, which is fairly hard to do when your head is planted in the sand.

If you've missed it in any of the previous posts I'll say it again. I hope your pension remains in tact, unharmed. In fact I hope it is enhanced, as you well and truly deserve it. Now if thats clear I'll address your points.

It is news for the simple fact it was in a newspaper in the public domain.

"Reports suggested yesterday he would almost certainly recommend significant increases in contributions from public sector workers covered by pay-as-you-go pensions to make short-term savings, affecting up to six million staff." You may ask yourself reports from where? Where was this story leaked from and why?

The public groups you quoted are not all allowed to serve a full pensionable career IF they choose. The public sector have been recruiting older people for some time for the simple reason that they can't complete their entire service and gain a full (and expensive) pension. It's much cheaper on the employer this way. Many of our trainees are in their mid 40's and can't do full term for a full pension.

The entrant rate for a firefighter is £21k, deduct from this the pension contributions and its much less than you say, "greedy" (not sure why you felt the neeed for an insult there?)

So you think the forces are the only dangerous places to work? I'd hazzard a guess that the families of fallen police officers and firefighters would say different, not when we are in a war zone, just back here doing our job.

If you think for one minute that this (or any) shameful government will convert their mindless platitudes into action to protect you then I think you may have a shock to come. They don't hold you in the esteem that I do.

I remember when they started to screw about with our pension, one I pay hundreds of pounds of my own money into each month, we said the same, "mess with our pension and i'll leave!" Well they did and still are but we're still here. Do you think they'd care if you PVR? Saves on further pension payments and redundancy, doesn't it?

Now if you think I'm showing some form of schadenfreude then, again you're sadly mistaken. You just need to wake up to the fact that if your pension was sacrosanct then why lump it in with the rest for review?

Says it all IMO, we are not safe from the bean counters, end of!

 

[eugone]

Pension News

Pension News

Everyone needs to look at The Forces Pension Society. The pension calculation has now been changed. Your pension will no longer be linked to the RPI (Retail Price Index), but will now be linked to the lower CPI (Consumer Price Index). They, the government, have just done this to the teachers. A typical Seargent about to retire will loose approximately £84,000 pounds based on him/her living to 75 years of age and this difference is increased for those of higher ranks. Sorry to be a doom and gloom person, but the only reason I put up with the job was because of the pension.

 

[True Blue Jack]

I should perhaps point out that for much of 2009 the CPI was higher than the RPI.

More importantly, the fundamental difference between the 2 is that the CPI does not include mortgage payments - I suspect most of us would hope to have paid our mortgages off before we reach the ripe old age of 75.

The Forces Pension Society like to throw these kinds of figures around to scare people. Very often, their maths does not stand up to scrutiny.

 

[firestorm]

Cpi (%) rpi (%)
2000 1 - 3.3
2001 1.3- 1.7
2002 1 - 1.7
2003 1.4 - 2.8
2004 1.1 - 3.1
2005 2.5 - 2.7
2006 2.4 - 3.6
2007 1.8 - 3.9
2008 5.2 - 5
2009 1.1 - 1.4

Perhaps that puts it into perspective? They are snakes.

 

[Realist78]

Cpi (%) rpi (%)
2000 1 - 3.3
2001 1.3- 1.7
2002 1 - 1.7
2003 1.4 - 2.8
2004 1.1 - 3.1
2005 2.5 - 2.7
2006 2.4 - 3.6
2007 1.8 - 3.9
2008 5.2 - 5
2009 1.1 - 1.4

Perhaps that puts it into perspective? They are snakes.

This also subtly backs up your argument about 'don't assume that they won't change the pension etc'. I have a copy of the brochure about AFPS 05 and it specifically mentions RPI uplifting. What else can they change without parliamentary approval?

 

[I`m Ron Burgundy?]

Sorry for being thick, but does this affect service leavers straight away? I thought that the immediate pension after 22 is not index linked until you hit 55 is that right?

 

[busby1971]

Rubbish

Rubbish

I should perhaps point out that for much of 2009 the CPI was higher than the RPI.

More importantly, the fundamental difference between the 2 is that the CPI does not include mortgage payments - I suspect most of us would hope to have paid our mortgages off before we reach the ripe old age of 75.

The Forces Pension Society like to throw these kinds of figures around to scare people. Very often, their maths does not stand up to scrutiny.

Following your good comments elsewhere I'm surprised at your ill informed rubbish sprouted above.

The post above yours is also misquoting the FPS. It will hit lower ranks the hardest in the RAF, and soldiers over officers in the Army, as they have a longer period between leaving the RAF and death, the longer you live the greater the compound effect, leave at 55 as a WO/FS a smaller effect than SAC leaving at 30, an extra 25 years of compound rate rise missing, assuming they would live to the same age.

CPI is a mickey mouse rate that will generally be lower than the RPI, to be honest to maintain its true value it should be linked to the AEI. It is a well known fact that due to the spending habits of pensioners their personal inflation rates are normally much higher than even this generous index despite not having a mortgage to pay off anymore.

The FPS is here for us, to fight for our rights and highlight issues and they generally do a good job.

 

[busby1971]

No right

No right

Sorry for being thick, but does this affect service leavers straight away? I thought that the immediate pension after 22 is not index linked until you hit 55 is that right?

The rate of pension is frozen until you reach age 55, it is then raised in line with all the RPI rates for the past 15 years (assuming you left at 40), even a one percent difference per year will result in a rise reduced by about 15%.

 

[Realist78]

The rate of pension is frozen until you reach age 55, it is then raised in line with all the RPI rates for the past 15 years (assuming you left at 40), even a one percent difference per year will result in a rise reduced by about 15%.

When does the RPI/CPI 'change of conditions take' place?