AFPS 15 and Added Pension

[Vauxhall]

AFPS15 was introduced on 1 April 2015 and the majority of you were transferred to it on that date...

The post AFPS015 and Added Pension appeared first on Forces Pension Society.

 

[Dan_Brown]

I asked the FPS and read a few docs about Added Pension - it wasn't very clear.

Is Added Pension payable with your EDP? ie an 18 year old joiner leaves after 20yrs - he is now 38 years old. Is Added Pension payable at 38 years old or at SPA?

4 years left to 30 years service, if i start paying Added Pension now, is that payable immediately upon leaving along with my IP or do i have to wait until SPA for the Added Pension element?

 

[Vauxhall]

I asked the FPS and read a few docs about Added Pension - it wasn't very clear.

Is Added Pension payable with your EDP? ie an 18 year old joiner leaves after 20yrs - he is now 38 years old. Is Added Pension payable at 38 years old or at SPA?

4 years left to 30 years service, if i start paying Added Pension now, is that payable immediately upon leaving along with my IP or do i have to wait until SPA for the Added Pension element?

The AFPS 15 pension itself will not be paid until SPA (or as early as age 55 with actuarial reduction) but the amount of pension feeds through into AFPS 15 EDP benefits.

If someone had purchased £200 Added Pension his AFPS 15 EDP lump sum (which is 2.25 times the AFPS 15 pension) would be £450 higher than it would have been had he not purchased that £200 Added Pension.

 

[unruly1986]

The AFPS 15 pension itself will not be paid until SPA (or as early as age 55 with actuarial reduction) but the amount of pension feeds through into AFPS 15 EDP benefits.

If someone had purchased £200 Added Pension his AFPS 15 EDP lump sum (which is 2.25 times the AFPS 15 pension) would be £450 higher than it would have been had he not purchased that £200 Added Pension.

Sorry, one single payment of £200 equates to an increase in the EDP lump sum of £450?

 

[busby1971]

Sorry, one single payment of £200 equates to an increase in the EDP lump sum of £450?

You wish, buying £200 of pension costs a lot more than £200.


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[Vauxhall]

Busby1971 is absolutely right. Buying £200 Added Pension would cost much more than £200 and, as the article says, there are many factors which determine cost. The point is that, for those who buy Added Pension and serve to their EDP point, the benefit of that Added Pension feeds through into their EDP benefits.

 

[unruly1986]

You wish, buying £200 of pension costs a lot more than £200.


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That's the point I was making - didn't come across very clearly in the post.

 

[busby1971]

That's the point I was making - didn't come across very clearly in the post.

Not using the right tables here but you’d be looking at 15 to 20 times the pension amount, so you be paying at least £3000 and most likely more, so if you think you’re going to live 15 or 20 years as a pensioner then it’s probably worth your while.

This might sound like a bad deal, however, remember you are buying an index linked amount of income for the rest of your life, so go and speak to an IFA who knows what they are talking about.

As I was told during my Finance Brief, Lump Sums come and go, Incomes keep repeating, also since been told that I’ve got enough pension so should look elsewhere for retirement income.


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