Commutation of Army Pension - Is it worth it?

GordyB1956

If a serviceman is made redundant after say 20 years (age 38) and get a pension adn takes resettlement commutation, then this would be paid under the 15 year rule when he/she is 53. Is that deduction then restored at that point OR do they have to wai till age 55. A friend did that and this month was expecting to have the commutaion reduction restored but the SPVA pensions tema have told him he continues with the deducation until age 55. That cannot be right? Any ideas where I can find the rules online. I was Pers Admin in the RAF and am sure SPVA are wrong.

molerat

What is the "15 year rule" ? It is and always has been age 55, the age when a "full career pension" is payable.

If you leave the Armed Forces before reaching the
age of 55 and with an entitlement to an IP, other
than invaliding benefits, you may apply for
resettlement commutation. The Finance Act 2004
(FA 2004) stipulates that a member’s pension
may not reduce from one year to the next except in
exceptional prescribed circumstances.
Rights to commutation in respect of pension
earned before 6 April 2006, when the provisions
of FA 2004 came into force, are unchanged, you
need to apply no later than 12 months after
leaving the service but, for pension in respect of
service after that date the commutation decision
must be made before the pension comes into
payment. To maximise the amount of resettlement
commutation you can receive you need to apply
before leaving the Services otherwise only service
before 6 April 2006 can be commuted.
There will be a compensating reduction in your
pension, which will be restored to its original value
at the age of 55. There can be no restoration of
your pension to its original value before this time.
Once the completed application from has been
forwarded to SPVA Pension Division, and they
have processed it, the decision is final and
cannot be reversed.

molerat

Steveswift wrote: »

After doing a bit more reading and trying to get a more accurate figure to my likely final pension amount,i have hit a wall can you help. Am i reading it right that if you served a full 37 years ( 18-55) one would recieve 48.5 % of your final salary as a final pensionable amount. As i left at the 18 year point under Voluntary redundacy that i would receive 18/22 of the 37 year full career amount ?

Have i got that right?

Thanks in advance, i will check in a little more often

Steve

I don't think it is that simple

YOUR ACCRUED BENEFITS

Your accrued benefits do not build up at a
uniform rate. AFPS 75 accrual rates are faster up
to the IP Point, so that after 16 years’ reckonable
service as an Officer you will have accrued
28.5% of representative pay, and after 22
years’ reckonable service as an Other Rank, you
will have accrued 32% of representative pay. If you
retire at age 55, with 34 years’ reckonable service
as an Officer or 37 years’ reckonable service as
an Other Rank, you will have accrued the
maximum pension of 48.5% of representative pay
(the 48.5% excludes the terminal grant).

Slop_Jockey

Hi guys. I'm an ex WO1 and my commuted pension is currently around £620 pcm. Could anybody advise what it will be when I reach 55 in 7 years time? Very rough figures will be fine i.e. roughly double?

molerat

A good ballpark figure is roughly double the 22yr/age 40 fully commuted pension, obviously less if you came out after age 40. I set up a spreadsheet for mine and input the inflation data, it came out £16 pa wrong after 15 years.

telboyo

molerat wrote: »

A good ballpark figure is roughly double the 22yr/age 40 fully commuted pension, obviously less if you came out after age 40. I set up a spreadsheet for mine and input the inflation data, it came out £16 pa wrong after 15 years.

Molerat
Any chnce you could post a copy of the spreadsheet witg the relevant RPI figures and formulas?

moonrakerz

molerat wrote: »

A good ballpark figure is roughly double the 22yr/age 40 fully commuted pension, obviously less if you came out after age 40. I set up a spreadsheet for mine and input the inflation data, it came out £16 pa wrong after 15 years.

That is fairly accurate at present but would not have been back in the 70s with 20%+ inflation !!

I have just dug out my tablets of stone and my figs were:

Pension at 40 (Gross) £3811
With commutation £3014
At age 55 £7622
At age 65 (V Soon !) £9121

fockers

I had transfered my army pension to a civilian pension years ago and since it was so long ago, i am having no luck in finding which company my policy is now with...(lost the paperwork whilst moving).
I have asked the DOWP to try tracing this said pension but was wondering if anyone out there has any other information or help they can give me which would help?

fockers.

Andy_L

http://www.veterans-uk.info/

iansmum

I have read this thread with interest as my OH is about to receive his increased pension at age 55. He has had his 55th birthday and the first increased payment should be at the end of April. We had the letter asking about other pensions and sent that straight back but when can we expect to hear about what increase he will get? There's a new car depending on it!!