Reserves integration and bounty vs pension

Ninja_Stoker

War Hero
Moderator
Maxi_77 said:
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

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.
 
Ninja_Stoker said:
Maxi_77 said:
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

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.

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.
 
Maxi_77 said:
Ninja_Stoker said:
Maxi_77 said:
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

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.

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.

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.

LTP
 

Ninja_Stoker

War Hero
Moderator
LostThePlot said:
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.

LTP

I suspect you are entirely correct!
 
higthepig said:
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.

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.

LTP
 
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.
 

McGrew

Midshipman
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 annuity-bureau.co.uk 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.
 

dunkers

War Hero
Nobody in their right mind in the RNR wants a pension because of how meagre it would be (unless you stayed for many years, interesting figures McGrew).
The point is that we may soon not get the choice because of the way things are going.

As for RNR paying PAYD fees, since RNR trips are duty trips you are entitled to a dutyman's meal at no cost. That's my understanding anyway.
 
McGrew said:
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 annuity-bureau.co.uk 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.
The simple answer to me is, Sign on or Shut up, you get a Bounty, you do it because you enjoy it, if you don`t agree with that statement, then sign on, its not rocket science, and for Gods sake you are RNR stop whinging or join up.
 

McGrew

Midshipman
dunkers said:
As for RNR paying PAYD fees, since RNR trips are duty trips you are entitled to a dutyman's meal at no cost. That's my understanding anyway.

Regrettably not in my Unit - we have been unequivocably told not. I am sure that there will be regional variations though - would be interested to knwo if it has been applied in different ways in different units.
 

McGrew

Midshipman
higthepig said:
The simple answer to me is, Sign on or Shut up, you get a Bounty, you do it because you enjoy it, if you don`t agree with that statement, then sign on, its not rocket science, and for Gods sake you are RNR stop whinging or join up.

A simple solution? Not really - thanks for your incisive comment though.
 
Top