Preserved Pension Reductions

Discussion in 'Finance & Pensions' started by tufty, Jun 1, 2010.

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  1. I left the pusser in 1980 with 12 years pensionable service and was awarded a preserved pension.

    I recently turned 60, the lump sum was paid to me and I got a letter from the AFPS at Kentigern House.

    At the bottom it says:

    "Any necessary reduction, earned in respect of service given up to 31 March 1980, in consequence of retirement pension payable to you under the National Insurance Pension Schemes will be made at age 65 the age at which state retirement pensions normally become payable"

    I rang them up to sak what that meant and was told I could lose quite a lot of it when I'm 65 but he was a bit vague about how much. :evil:

    Anyone know any more about this?
  2. Nobody know then? I've sent them an email.
  3. I have just had a similar letter from the pension fund of my last company.
    I have been told that the pension I have been receiving from the time I was made redundant will be reduced when I reach the age of 65. It will be reduced by the ammount of a suppement included. Seems this supplement was a requirement by law until state pension was received. This guaranteed a minimum ammount of pension until retirement age.
    Once state pension comes into play this requirement in ended.
  4. Well got a reply from them and one paragraph says:

    "When you reach the age of 65 and your state pension commences which will reduce your Armed Forces pension due to National Insurance modifications. This was due to service persons who served between 03/04/61 and 01/04/78, the MOD paid contributions on their behalf."

    What annoys me is that I didn't know about this, and can't find any reference to it on the MOD Pensions website.

    Should have gone in to banking ....
  5. Tufty

    Is this the Graduated Pension Scheme Abatement referred to on Page 5 of this document?:

  6. It's close! I think they're talking about AFPS 05 there whereas I'm in AFPS 75 since I joined in 1967 and was still serving in 1975 when it came in - not that I noticed at the time though!

    Still you've given me another search term I can try there then - cheers
  7. BOOTWU - thanks for that - Tufty
  8. Members who are in receipt of AFP (AFPS75) should note that the forces were opted out of Nat Ins contributions for a number of years. Therefore on reaching 65 years your old age pension is reduced to take account of this. It should also be noted that this element does not figure for an increase this year (same as service pension) the increase heraded by the incoming CONDEM group stated all old age pensions would be increased by 2.5% -only part of mine was subject to the increase. BEWARE those bearing false gifts.
  9. Not pension related comment, but you have just answered a question I tried to get an answer to on google.
    I knew that during my time we never paid NI and when on leave had to pay for services that were free to civvies, get a receipt and then claim it back on board.
    I could find no mention of the system on google.
    It was relevant as when I left the mob the Job Center tried to make me buy shortfall NI stamps when I went to register there on discharge.
  10. Think you'll find that if you did the full 22 years the non payment of insurance contribution evened its self out with the RN pension .

    RN Pension being classed as a seperate scheme outwith the OAP my
    pension statement payments read
    State Pension-----------
    Pre 97 additional pension -------
    less contracted out deduction ----
    Post 97 additional state pension ------
    Graduated Retirement benefit --------

    RN pension is paid seperately and usually gets used for any tax due to be paid . The tax man cannot take any tax from OAP related payments .

  11. Greenie I do not think that is quite correct they just adjust your tax code i.e. lower it so you have less tax relief against you pension.
    That is what they did to me when I got my OAP
  12. Greenie: I served for 20 years and the NI payments started at 16 years of age (1/3 pw) and continued until I had completed 44 yeays employment. The DWP office said anyfurther contributions would not coun. I took the hint and retired TM
  13. My Service time --I did 27 years came out 1985 Joined as a junior
    so basicallydid nearer 30 years RN time
    I had a insurance number at age 13

    Worked 1985 till 2004 and like Sulzer was told I need not sign on 'cos my Insurance contributions were above the 44 yr period

    At age 65 the non taxable allowance is £9,490 so you would be allowed to
    recieve approx £200 pw and pay no tax . However My state paid OAP benefits add up to more than £9,490 pa . The amount over £9490 becomes liable for tax
    The tax due is passed to the RN Pension paying authority and added to the
    amount that is due to be deducted as a tax payment from my RN pension
    thus giving me a final tax code

    ie tax is basically 0ne fifth [20%] of all income over and above your personal tax free allowance
    If your income exceeds £24,000pa then you begin to pay more tax . So
    anyone thinking of getting a job or staying in work after 65 beware the tax rules


  14. I had a reduction of my Service pension at 65 but I was told I had received more than the basic State pension as a result.
  15. I left the mob in 89 after 27 years then joined Royal Mail, took their pension at 60, then on reaching 65 it was reduced by almost 40%. This appears to be the norm in all final salary pension schemes. Of course at 65 the state pension kicks in, but because both pusser and RM were contracted out of SERPS my state pension was reduced by about £45 a week. Such is life! Mind you with 2 indexed linked pensions I am much better off than those with a full state pension. I agree with Greenie, I still work part time at 66 but if I earn more than £25400 (ish) this year you start paying almost double the tax, so I do 1 1/2 days a week but take a month off over crimbo and a month in the summer. Works well all round.
    Last edited: Oct 1, 2013

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