Reserves integration and bounty vs pension

Discussion in 'Royal Naval Reserve (RNR)' started by dunkers, Jul 5, 2007.

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  1. So the current buzzword in the RNR is "integration"... moving the reserves closer to the regular navy. It has occurred to me that this integration might eventually have an effect on the employment status of RNR personnel.

    As I understand it, RNRs are technically regarded as casual labour - which allows us to turn up on drill nights, or not turn up, as we like; it also means we are, entirely as a perk, paid an annual bounty instead of a pension... because we have no firm "job" as it were for the basis of a pension. I am happy with this situation.

    However! since the drive is currently to make the RN and RNR seamless, could it ever happen that our terms of service will change, to make us not "casual labour" but permanently employed somehow? (Like by compulsory attendance at X many weekends per year or face disciplinary action.) This change would depend on what the projected use for the RNR is. That is, if it will remain in its current form, or become a "part time" navy where you can switch between full and part time - in which case all personnel would need to be treated the same.

    Another aspect if that happens is what would happen to bounty? Would you like it to be replaced with a pension? Personally I wouldn't, but if we're moving ever closer to a full/part time RN where all personnel (regular or reserve) would have to be on the same terms of service - maybe it is inevitable? o_O

    Any thoughts on the above??
  2. I think it's worth bearing mind the other element of this equation, employers.

    I'm not sure about yours, but my firm (boutique consultancy) is pretty supportive of my reserves commitment but don't consider it under the additional employment in the same way as other potentials which require a whole consent process round about it.

    I'll acknowledge that being an ex regular probably makes that easier, and I'm providing very similar services to my specialisation over the last ten years or so, albeit to a completely different client base.

    Clearly it depends on branch but in some cases the part time employee model doesn't match well with our mainstream existence.

    Personally I'm also quite happy with the current model; I give time when it suits and my employers are sensitive to times when I might be called on to do short jobs. The pay funds the odd nice meal out, because it can't be planned for. Psychologically I think that's probably more motivational than a more rigorous reward mechanism.
  3. Completely off topic but you are a useful person to know! Someone who is a consultant for boutiques. Do you get a discuount? Are you big on fashion?

    As to Dunkers original point, I think you are right, I would not wish to be a part time employee of the RN, they cannot get the terms and conditions right for the full timers, what do you think they would do for us?
  4. It would certainly appear the purpose of the bounty has changed over the years, in my time in the RNR, the bounty was in part to cover the unpaid time at drill nights, and in my days many did two nights a week for much of the year, and a bonus for managing to tick all the boxes in showing your committment. I think to suggest today it is in place of a pension, especially when there is the obligation for periodic deployment which was not there in my day seems to be moving the goal posts.

    It would seem reasonable for, in the present climate, that subject to the entitlement exceeding a reasonable level that the RNR get a pension based pro rata with the RN pension on the number of days actually served. This would probably mean nothing for the person who misses bounty regularly but something significant for the person who has served a good number of years and managed regular weweekends, annual training and the occasional deployment, which would to me seem fair
  5. Five minutes, quicker than I anticipated :)

    With my clients, the last thing I want is to be a customer of them, never mind getting a discount!

    Depends how you feel about business formal, all the time. The dress code is much the same as it was as a GL Orficer.....
  9. Ninja_Stoker

    Ninja_Stoker War Hero Moderator

    Back on track (sorry)

    But the pension issue for Reserves has already been taken up with gusto by the Final Examining Medical Officers, that conduct medical examination once or twice a week in the AFCO's for a few hours.

    The argument being that as they are technically employed by the MOD, then they should be entitled to a bit of pension too. The figures involved would be fairly minimal, when you consider the amount of pension I get after 22 years in full time employment compared to a couple of hours a week over a much shorter timescale.

    Using ball-park figures I'd suggest the RNR would be financially better off keeping the bounty as if the pension were calculated on the same terms as a regular pension, assuming 40+ hours per week over 20 odd years giving about £600 per month pre-tax pension, then a Reservist earning say 10% of that would get arount £720 before tax per year. Remember pensions are taxable- are bounties?
  10. ... and I bet all your socks are black, even now.

    But anyway.

    Here's a bright idea... put the "new" AWFP (former GSSR) branch under the control of the RN Warfare Branch so it becomes a warfare specialist role, ie WS(AWFP). In other words give the warfare branch a reserve specialisation. Have every AWFP dude trained in another WS role eg AWW, AWT etc. And hey presto, you have a pool of trained ops room personnell you can send off on ships with gapped billets, eg for the duration of a particular deployment. This would also open the way for regulars to be trained in AWFP and step down to an RNR committment if the Service could allow it (and return to their regular role later).

    Therefore, at a stroke, achieving an integrated regular and reserve force.

    Now doesn't that make sense :lol:

    No; they are tax free. Indeed the bounty is more attractive for a reservist than a pension but I wonder if they will eventually kill it off.
  11. Ninja_Stoker

    Ninja_Stoker War Hero Moderator

    Indeed it does make sense.

    And there lies the folly of your cunning plan!
  12. I certainly do not believe the bounty should be swapped for a pension, it was never intended to be a substitute for a pension when introduced so why make it one now, that is just the bean counters wriggling. As for only racking up say £720 a year, many would find that a worthwhile extra so don't knock it especially as you would hope to pick that up for say 20+ years
  13. Ninja_Stoker

    Ninja_Stoker War Hero Moderator

    Hello Peter,

    Quite agree that a figure such as that would indeed be most welcome, but I meant it in the context of the original post as "instead of" rather than "as well".

    I bet someone in Pensions is now bottling it! After all, the AFPS 05 pension scheme was most certainly not introduced to provide more money for the recipient. It was simply introduced in the hope that most would die before eligible, thus saving Mr Broon a few pence extra.
  14. I fear every pension provider is wrigggling as much as possible to try to ensure that they balance the books, like many my scheme was based on the premise that a significant number would snuff it in the first years of retirement, but us old farts are becoming less cooperative. Fortunately I should retire before they can change our scheme any more and I will get what I signed up for in the first place.
  15. And what we have to remember is that if a pension is introduced it WILL be at the expense of the bounty.

    Personally I would rather retain the tax free bounty. As it has been mentioned numerous times in the past if you want a pension from the RNR there is nothing to stop you investing all or part of your bounty into a personal pension.

    I suspect many of those who say they would rather have a pension are those who miss out on bounty every so often and don't get a waiver and therefore have to start again with the lower end bounty.

  16. Why not just sign on if you want a pension, do 22 years and there you go,I cannot believe the people in the RNR are serious.
  17. Ninja_Stoker

    Ninja_Stoker War Hero Moderator

    I suspect you are entirely correct!
  18. Unfortunately it's not just the RNR, I seem to recall that there were 2 TA soldiers who went to court to fight for right to receive pensions at the same rate as the regular Army. I don't know what the outcome was, maybe someone can enlighten me.

    As you say Hig, if you want a pension from the MOD sign on for the 22.

  19. LTP I do not know your personal circumstances, but I do know that Hig is retired. In case you are not aware as Dunkers says, the current buzz word is integration.

    You may be aware that the starting point for this is that RNR do not now wear 'R' in the curls or on the shoulders. We now look the same as the regulars.

    The next thing I understand is that we shall be seamless with the RN, so for instance if a serving person wishes to take time off to, say study, then they leave the RN and join the RNR, and once they are finished they transfer back. And the same with the RNR - if one wishes more permenant employment one should be able to transfer to the RN. Personally I think this is a complete pipe dream - how can it work when we do not even have the same branches? However I am a mere PO and what do I know?

    So presumeably the next thing is that our terms and conditions are aligned, and this is where Dunkers original post comes in. You may or may not be aware that wherever you find regulars you will find reservists and why should they be disadvantaged when they are putting their lives on the line with their regular colleagues?

    I have made my position clear so all this post is doing is setting out in clear terms for those who are not in the loop.
  20. I think that there is no relation between bounty and pension whatsoever. The reasons for bounty are historic (I am sure that there are plenty of people who read this forum who can comment on this) and I think that it is all too easy to say that it makes up for the lack of leave allowance, lack of pension and all the other stuff that full timers get.

    However it got me thinking - from purely financial terms which is better - bounty or pension?

    Any pension awarded would, imho, be derisory. Even if it were awarded it would be no doubt be pro rated on the minimum of 24 days per year and given that most in the RNR are not rank orientated then the amount for an AB or LH would be little. Since the RN pensions come out of the defence budget then it would be opposed at the highest level by the civil service mandarins that worry about the LSD rather than what is good for morale. Since the RNR is casual labour anyway and you get pension for mobilised service and FTRS then again it would likely to be little.

    However what of the bounty. It offers choice in that you could invest it in a personal pension if you wanted to - what would you get?

    Take a 25 year old who is on the top level of bounty of £1,500. If this was invested in a pension then you get basic tax relief (even though it was paid tax free) so the amount that was invested would be £1,920. If he was a higher rate taxpayer then he would also get another £350 back in tax relief. I have assumed that just the bounty is invested.

    If he did this until the age of 55 and he got 8% growth and 0.8% charges then his retirement fund at this age would be £215,000. If he then left it to the age of 60 with no contributions then this would grow to about £300k which would provide a pension of about £20k a year.

    Ok - it is an academic argument. However given that the bounty gives choice then IF (and it is a big if) you had a choice between bounty or pension then it surely has to be bounty.

    Any actuaries or financial advisers out there that want to verify my sums then fill your boots - I used and a spreadsheet model to do the growth.

    More importantly one of the things in terms of integration is this pay as you dine thing. Overnight I seem to be working for an organisation that charges me for the privilege of working away for them. Does anyone in the civvie world have to buy their lunch when they get sent away on business - I reckon not. Is it possible that the RN has integrated us without thought for the fact that actually we would not be paying food charges anyway since we are RNR.

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