Adjustments to Retirement Benefits

By PDFORRA

Formal agreement has been reached between PDFORRA and the Department of Defence in relation to certain improvements in the existing Pensions Scheme applicable to Enlisted Personnel who joined the PDF before 1 April 2004 and who were serving on 1 September 2005.

The main features are set out below. The agreed improvements are subject to the personnel concerned satisfying the relevant qualifying conditions. The main features of the agreement are set below and are as follows:

1. Increase in Retirement Gratuity (lump sum): The main improvement is an increase in the level of pay-related retirement gratuity for Enlisted Personnel on discharge with 22 years’ service or more. The new maximum gratuity payable after 31 years’ service is now 65 weeks’ pensionable pay (instead of 45 weeks’ pay previously).

2. Changes to the Method of Reflecting Technician Pay and Other Additions in Pension: Previously, pension was increased by a fixed 3% addition in respect of each pensionable payment regardless of its actual rate (e.g. whether for Technician Pay Group 1 or higher). Under the agreement, new % additions ranging from 1% to 15% apply to pension.

3. Pensionability of Certain Allowances: The following allowances will now be reckonable when calculating pension and pay-related retirement gratuity –
• NCO Account Holders Allowance
• NCO Instructors Allowance
• Mast Rigger/Erectors Allowance
• Foreign Language Proficiency Allowance (maximum rate only)

4. Changes to the operation of the 5 year rule in respect of Technician Pay: Under the agreement, Technician Pay etc. can now reckon as long as the person concerned holds the pensionable payment(s):
• For at least 1 year continuously up to and including discharge date; and
• For an aggregate of at least 5 years during the final 8 years of service.

5. The implementation date of the new arrangements: Pensionability applies from 1st September 2005 or the date the allowance was introduced, whichever is the later. The other improvements outlined above apply from 1st September 2005.

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