NEM - A Personal View

[Kryten]

Hi mate. Nice summary of what state we are in right now.

Unless someone has experienced the changes going on right now, I don't believe they can understand the magnitude.

Like I said previously, 6 month DWRs, the amount of post gapping going on, sheer numbers of dissolutions staff in all ranks, trades and branches.......its totally unprecedented.

The OP was giving an overview of how NEM is affecting him and his story is one that is mimicked across the force.

And in the midst of all this, I can see no resemblance in comparing our 'lot' with those outside the 'wire' if you like.

Sorry to wade in here Ringo, but I feel the need to debate.....

I've read this thread from the beginning and your frustrations come across quite clearly - clearly the RAF has undergone / is undergoing massive change and the factors you mention (6 month DWRs, the amount of post gapping going on, sheer numbers of dissolutions staff in all ranks, trades and branches) are all going to have an effect on morale.

Where I do take issue is your statement around the premise that it's totally unprecedented. With respect to you, I would say it isn't. Some of us "old sweats" can remember things like "Options for Change" and the introduction of Pay 2000 as a couple of significant changes that massively affected the RAF - christ, I can recall whole trades disappearing as a result of Options for Change.

Like you and many others, I felt trapped - in 2005 I had just completed 16 years and was within striking distance of my full pension. I then got offered a very well paid job in defence in civvie street and I had to decide whether to stay in and continue doing a job that I loved, or jump ship into the unknown. At that time our trade was doing 4 monthers every two years, and I was on a unit that also had Sqn dets to do as well as DWRs, so I was spending more time away than I would have liked. So I took the plunge - can't say it was easy (being fired before I even started my new job was a novel experience) but 11 years later I have a good job and in addition to my RAF pension I now have a Company pension.

So all I would say to you is firstly, making the jump into civvie street isn't as difficult as you might think, and secondly (and to paraphrase one of my favourite TV shows) all of this has happened before, and it will happen again...

 

[PerArdonAdPollo]

Pension trap under AFPS 75 is 25 years of pension payments and a 40 to 50k lump sum, roughly 300k, but you'll pay a bit more tax offset from savings on your mortgage, people tend to feel trapped from about the 15 year point in.

I hadn't really thought about the idea of trying to earn more to offset my loss of pension if I PVR'd, I'm just too stubborn to give it up after all this time paying into it! I wonder at what point the trap really does become a trap in that case? I suppose it's when you *really* want to retire?

Under AFPS 05/15 (without taking promotion or the NEM Pay reform into account) I'm due the following;

[TABLE="width: 500"]
[TR]
[TD]Resettlement grant - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Lump Sum on my 40th - [/TD]
[TD]£33k[/TD]
[/TR]
[TR]
[TD]Pension from my 40th - [/TD]
[TD]£5.5k[/TD]
[/TR]
[TR]
[TD]Pension from my 55th - [/TD]
[TD]£7.5k [/TD]
[/TR]
[TR]
[TD]Lump Sum on my 65th - [/TD]
[TD]£22.5k[/TD]
[/TR]
[TR]
[TD]Pension from my 65th - [/TD]
[TD]£9k[/TD]
[/TR]
[/TABLE]

So lets say I want to retire at the current State Pension Age of 68. If I stay in to my 22 years, I'll get;
33 + (5.5 *15) + (7.5 * 10) + 22.5 + (9 * 3) =
33 + 82.5 + 75 + 27 = 217.5 (£217,500)

If I banged out tomorrow, I would get


[TABLE="width: 500"]
[TR]
[TD]Resettlement grant - [/TD]
[TD]£10.5k[/TD]
[/TR]
[TR]
[TD]Lump Sum on my 40th - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Pension from my 40th - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Pension from my 55th - [/TD]
[TD]£0k [/TD]
[/TR]
[TR]
[TD]Lump Sum on my 65th - [/TD]
[TD]£22.5k[/TD]
[/TR]
[TR]
[TD]Pension from my 65th - [/TD]
[TD]£8.5k

[/TD]
[/TR]
[/TABLE]


So;
10.5 + 22.5 + 8.5 * 3 =
10.5 + 22.5 + 25.5 = 58.5 (£58,500)

A loss of £159,000 on my earnings. With 5 years to go that would mean attempting to earn an extra £31,800 on my current £34,000 salary. So a wage of around £65,000 (ignoring variables like paying into a new pension scheme / housing / dental / medical / tax etc).

I know I'm awesome and everything, but that's pretty much a trap for me.

(Please point out any errors!)

 

[PerArdonAdPollo]

Just in case anyone was wondering what the figures would look like on 75/15 as a comparison;

Leaving at 22 year point;

[TABLE="width: 500"]
[TR]
[TD]Resettlement grant - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Lump sum on my 40th -[/TD]
[TD]£32k[/TD]
[/TR]
[TR]
[TD]Pension from my 40th - [/TD]
[TD]£8.5k[/TD]
[/TR]
[TR]
[TD]Pension from my 55th - [/TD]
[TD]£8.5k[/TD]
[/TR]
[TR]
[TD]Lump sum on my 60th - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Pension from my 60th - [/TD]
[TD]£8.5k[/TD]
[/TR]
[TR]
[TD]Lump sum on my 65th - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Pension from my 65th - [/TD]
[TD]£8.5k[/TD]
[/TR]
[/TABLE]
32 + (8.5 * 28) =
32 + 238 = 270 (£270,000)

[TABLE="width: 500"]
[TR]
[TD]Resettlement grant - [/TD]
[TD]£10.5k[/TD]
[/TR]
[TR]
[TD]Lump sum on my 40th -[/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Pension from my 40th - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Pension from my 55th - [/TD]
[TD]£0k[/TD]
[/TR]
[TR]
[TD]Lump sum on my 60th - [/TD]
[TD]£7k[/TD]
[/TR]
[TR]
[TD]Pension from my 60th - [/TD]
[TD]£2.5k[/TD]
[/TR]
[TR]
[TD]Lump sum on my 65th - [/TD]
[TD]£11k[/TD]
[/TR]
[TR]
[TD]Pension from my 65th - [/TD]
[TD]£7k
[/TD]
[/TR]
[/TABLE]
10.5 + 7 + (2.5 * 5) + 11 + (7 * 3) =
10.5 + 7 + 12.5 + 11 + 21 = 62 (£62,000)
A loss of £208,000 or £41,600 per year for 5 years.

 

[justintime129]

So it looks as though the only choice you have is to persevere for however long you've got left. It'll soon fly past. Start putting yourself first now and start planning for when you leave.

 

[PerArdonAdPollo]

So it looks as though the only choice you have is to persevere for however long you've got left. It'll soon fly past. Start putting yourself first now and start planning for when you leave.

That's the plan, thanks. I can see the light! Ha ha!

Edit: When/If they update the pension calculators to add all this NEM guff in, I'll come back and let you know how much I've lost!

 

[Ringo]

Sorry to wade in here Ringo, but I feel the need to debate.....

I've read this thread from the beginning and your frustrations come across quite clearly - clearly the RAF has undergone / is undergoing massive change and the factors you mention (6 month DWRs, the amount of post gapping going on, sheer numbers of dissolutions staff in all ranks, trades and branches) are all going to have an effect on morale.

Where I do take issue is your statement around the premise that it's totally unprecedented. With respect to you, I would say it isn't. Some of us "old sweats" can remember things like "Options for Change" and the introduction of Pay 2000 as a couple of significant changes that massively affected the RAF - christ, I can recall whole trades disappearing as a result of Options for Change.

Like you and many others, I felt trapped - in 2005 I had just completed 16 years and was within striking distance of my full pension. I then got offered a very well paid job in defence in civvie street and I had to decide whether to stay in and continue doing a job that I loved, or jump ship into the unknown. At that time our trade was doing 4 monthers every two years, and I was on a unit that also had Sqn dets to do as well as DWRs, so I was spending more time away than I would have liked. So I took the plunge - can't say it was easy (being fired before I even started my new job was a novel experience) but 11 years later I have a good job and in addition to my RAF pension I now have a Company pension.

So all I would say to you is firstly, making the jump into civvie street isn't as difficult as you might think, and secondly (and to paraphrase one of my favourite TV shows) all of this has happened before, and it will happen again...

Hi Kryton,

Nice post mate.

I think the point I was trying to make when I said it was unprecedented changes......is a valid one.

I agree that current serving guys are not unique in being shafted, and the NEM on its own or even with a couple of other shaftings, could be seen as the norm, compared to previous years.

BUT.....this is where I stand by my 'unprecedented' remark......

Being forced onto a new pension scheme (25% loss in my case) is pretty unique. Previous changes people had a choice to change.
The RAF is much smaller now than in 2000 or at anytime earlier....so impact of low morale and discontent is being felt far more harder.
Cost of service house is increasing with an aim of almost reaching private rental figures !! This is unprecedented.

I could go on, but I'll stick to the main points.

Lastly, I do agree with my civvy friends on here, that this is just the beginning of a long downward road where in 10 years, I don't believe any service person will be able to claim an IP before the age of 50/55/60, regardless of completing 20 years or not.

 

[dessp2]

Leaving before IP point.

Leaving before IP point.

I guess it is easy for me to say as I have recently left on AFPS 75 with my IP. If I was still in with 5-6 years to push there is no way I would leave. Whatever IP you do receive when you leave (not only have you earned it) it is great knowing that if the poo hits the fan (when you are a civvie) you can still cover mortgage payments if you were to lose your job.

 

[Kryten]

Hi Kryton,

Nice post mate.

I think the point I was trying to make when I said it was unprecedented changes......is a valid one.

I agree that current serving guys are not unique in being shafted, and the NEM on its own or even with a couple of other shaftings, could be seen as the norm, compared to previous years.

BUT.....this is where I stand by my 'unprecedented' remark......

Being forced onto a new pension scheme (25% loss in my case) is pretty unique. Previous changes people had a choice to change.
The RAF is much smaller now than in 2000 or at anytime earlier....so impact of low morale and discontent is being felt far more harder.
Cost of service house is increasing with an aim of almost reaching private rental figures !! This is unprecedented.

I could go on, but I'll stick to the main points.

Lastly, I do agree with my civvy friends on here, that this is just the beginning of a long downward road where in 10 years, I don't believe any service person will be able to claim an IP before the age of 50/55/60, regardless of completing 20 years or not.

Valid points there, chap - and at the end of the day no one should lose 25% of their pension; I still have a few mates left in and every time we meet they can't say why they are still in - most have reached or exceeded their 22 years, but the stories of poor morale and a feeling of neglect from superiors are widespread. You do have my sympathies (not that they will do a lot, mind)!

 

[PerArdonAdPollo]

Today I was trying to work out if the NEM Pay Reform would have more of an effect on people on 75/15 or 05/15. It dawned on me that it should affect both equally, as the 75 or 05 bit are preserved benefits.

Can anyone tell me if this is correct?

(For instance I'll have 17 years of 05 and 5 years of 15 by the time I leave. But does my 05 'bit' freeze upon the inception of 15?)

 

[Joe_90]

It sort of freezes, as you go up in rank it still changes. If you get out at 22 as a Cpl 17 years of your pension is paid at the 05 rate for Cpl. If you get to Sgt in that time that 17 years is then paid at Sgt level etc. The same is true for 75 pension scheme.

 

[Witty_Banter]

Anyone know if the Pension Calculator has been updated with the NEM data yet?

 

[1Referee]

I was advised it would be June, hopefully June 16!!!

Probably 2 days after they up the PVR wait times!!

 

[Witty_Banter]

Probably 2 days after they up the PVR wait times!!

You're too late mate, they've already upped them for most trades (was trawling the darker corners of the Manning website last week). Most trades are now 12 months, but some have gone up to 18.

 

[Dan_Brown]

But where do you stand if you have a written job offer?

I have a colleague who pvr'd Jan and his section were adamant he was not leaving before his pvr time.

Threats of MP, Gen App with written job offer attached and they are now gone in less than 3 months.

 

[Stevienics]

A lot of people I work with are openly stating that it doesn't matter as it is illegal to make them work with more than 1 month's notice, whatever the PVR time . Is this the case?

It sounds very barrack room lawyer to me

 

[busby1971]

A lot of people I work with are openly stating that it doesn't matter as it is illegal to make them work with more than 1 month's notice, whatever the PVR time . Is this the case?

It sounds very barrack room lawyer to me

Very much barrack room, even in civi street there are longer notice periods, covered by contract law, however, in civi street the losing employer has to take you to court if you stop attending, so few bother, in the mob they can pop you in Colchester very quickly.

 

[Dazzy26]

A lot of people I work with are openly stating that it doesn't matter as it is illegal to make them work with more than 1 month's notice, whatever the PVR time . Is this the case?

It sounds very barrack room lawyer to me

Just from my personal experience, I had a written job offer and looked at PVRing when it was 6 months but due to critical manning levels in my specialisation was told 6 months was minimum waiting time and I would be held to 12 months. All the JSP references where attached backing their stance. I tried the 'I'm paid monthly quote' and under employment law you can't keep me to which the written response was HM Forces are exempt certain parts of employment law and this is one. If I wanted to fight it they were happy to go down the legal route.

I will make it clear that I was (and still am) on good terms with my CM and it was a fully amicable discussion. I couldn't risk going down the route to battle and loose my job offer by being kept in for 12 months so you could say I bottled it!

 

[Dan_Brown]

I know people at all ranks between Cpl-FS who have been out in days who had job offers. All with a 12 month PVR time.

But is that with section and manning support? What if Manning/Section do not support you leaving?

 

[gray]

No idea. All I was saying is I have experience of all rank levels, in various trades, leaving at less than MWT. I personally have never encountered someone being held to MWTs, but there must be some niche specialisations that are.

I was made to wait the full 6 months by manning. Chief Clerk said there was nothing He could do.... we did have (and still do) a high rate of attrition where I worked though - and still work, but as a Civvy

 

[Witty_Banter]

Just looked, spreadsheet updated 24/2/16 and no trades or branches at 18 months....

Hmmm, I'll take another look - maybe I was looking at an old document. If I find something to the contrary I'll post it here.