Transfer out of Armed Forces Pension

wallis873

I have just tried to transfer my Armed Forces Pension to my new employers pension scheme and have been told the following:

The Government has announced that transfers from the AFPS to a defined contribution scheme, or a scheme that offers an entitlement to flexible benefits, will not be allowed after the 5th of April 2015.

Why is this and is there a way around it?

I would like to transfer my pension not take a lump some or withdraw it as I am only 32. and only completed 7 years in the Armed Forces.

Regards

Pete

greenglide

As part of the pension changes you cannot transfer out of an un-funded pension scheme (Armed Forces, Police, Civil Service etc) unless it is to another Defined Benefit scheme.

There is no obvious way round this.

Why would you want to? It will give you an index linked deferred pension guaranteed. Your current employer does not offer this.

wallis873

By transferring my pension I can add it to my new employers pension scheme and have all my money in one pot, it could also then go up in value and I understand it may also go down but I am prepared for that risk.

leaving it where it is the sum will not change and I will also be unable to take out a lump sum at the age of 55 and I will probably be dead by 65 lol

dunstonh

I would like to transfer my pension not take a lump some or withdraw it as I am only 32. and only completed 7 years in the Armed Forces.

You cant. And it would be an extremely foolish thing to do if you could.

By transferring my pension I can add it to my new employers pension scheme and have all my money in one pot, it could also then go up in value and I understand it may also go down but I am prepared for that risk.

And lose a fortune in the process.

leaving it where it is the sum will not change and I will also be unable to take out a lump sum at the age of 55 and I will probably be dead by 65 lol

The sum will change. Its around 1 in 5 men that wont make 65. You are playing the wrong odds.

jem16

wallis873 wrote: »

leaving it where it is the sum will not change

That's not correct. Your pension grows in line with CPI each year in deferment.

and I will also be unable to take out a lump sum at the age of 55

You will have a tax-free lump sum entitlement at retirement and the rest as a guaranteed monthly pension. This is way more valuable than taking a lump sum from a DC pension and paying loads of tax on it.

and I will probably be dead by 65 lol

Statistically unlikely but if you do your Forces pension will also provide a pension for life for your spouse.

Sorry but your reasoning is all wrong and will result in you being much poorer in retirement. Fortunately the rules will stop you from being so foolish.

Andy_L

wallis873 wrote: »

The Government has announced that transfers from the AFPS to a defined contribution scheme, or a scheme that offers an entitlement to flexible benefits, will not be allowed after the 5th of April 2015.

Why is this

They are concerned that the new pensions freedoms (allowing people to take all their pot out in one go) would be enthusiastically adopted by the members of the unfunded public sector pensions (of which AFPS is one). Since there is no "pot" in the unfunded schemes they would have to find the cash out of day-to-day spending which would (near) bankrupt the country compared to paying out the pensions over 30+ years

hyubh

wallis873 wrote: »

is there a way around it?

A straight answer to a straight question (!):

1. Get a job as a teaching assistant, or if that requires some sort of relevant qualifications now, cleaner with a local school, joining the LGPS in the process

2. Transfer your armed forces benefits into the LGPS (legal because it's DB to DB)

3. After three months, quit the school job and transfer out from the LGPS to your DC scheme of choice (legal because the LGPS, while a public sector scheme, is a 'funded' one).

fordcapri2000

I looked into doing this years ago, since leaving the forces back in the late 80's I have started a decent personal pension along with a good company I had for several years to then going back to just feeding my personal pension, now have my own business.

The advice I got after asking many people was NO NO NO NO...

And just in case you never got the message there, no :-)

Everyone I asked said keep the Army pension to one side, nothing will ever beat what they are offering, so that is what I have done.

That's unless things have changed, so will keep an eye on this thread.


p.s slightly off the subject but still relevant, who or what would be the best way to find out what this pension would pay me now. Back in the late 80's I was given a bit of paper basically telling me to get in touch at 60 and at that time it was worth £1800 per year. Does not sound great, but will be a nice bonus with my other pension, and I am sure the sum would be far greater now.

greenglide

p.s slightly off the subject but still relevant, who or what would be the best way to find out what this pension would pay me now.

If it is indexed by RPI / CPI then the CPI has increased by 256.7% since 1987 (see here http://www.ons.gov.uk/ons/datasets-and-tables/data-selector.html?cdid=CHAW&dataset=mm23&table-id=2.1 )

fordcapri2000

greenglide wrote: »

If it is indexed by RPI / CPI then the CPI has increased by 256.7% since 1987 (see here http://www.ons.gov.uk/ons/datasets-and-tables/data-selector.html?cdid=CHAW&dataset=mm23&table-id=2.1 )

If that is the case I am quite chuffed, I have always thought of it as a nice little bonus on top of a substantial personal pension pot I now have. That makes it worth around £4.5k per year :-)

kangoora

fordcapri2000 wrote: »

I looked into doing this years ago, since leaving the forces back in the late 80's I have started a decent personal pension along with a good company I had for several years to then going back to just feeding my personal pension, now have my own business.

The advice I got after asking many people was NO NO NO NO...

And just in case you never got the message there, no :-)

Everyone I asked said keep the Army pension to one side, nothing will ever beat what they are offering, so that is what I have done.

That's unless things have changed, so will keep an eye on this thread.


p.s slightly off the subject but still relevant, who or what would be the best way to find out what this pension would pay me now. Back in the late 80's I was given a bit of paper basically telling me to get in touch at 60 and at that time it was worth £1800 per year. Does not sound great, but will be a nice bonus with my other pension, and I am sure the sum would be far greater now.

Contact them and ask for a benefit statement. I left in late 80's and was told it would be £1450, currently it's about £3.5k and I've taken a rough estimate that by the time I am 60 it will be around £4k per year.

Write to these below asking for one, don't phone or email or your request doesn't get dealt with. You'll need your full name, army number, DOB, probably might help to put in regiment/corps & NI number although I think the last 2 aren't strictly necessary.

For help and information on your armed forces pension please ring the Veterans UK on 0800 085 3600

or write to:

Veterans UK Pension Division
Mail Point 480
Kentigern House
65 Brown Street
Glasgow, G2 8EX