buydown system

[hubbahubba]

There is a possibility of buydown from FT to PT in our MC.Does anybody know the formula used to calculate what the offer will be per hours bought back?

Am I right in thinking it's still under MTSF?

[rehabron]

Buy Down is incorporated with the MTSF October 2010. Remember your transfer to P/T will effect the calculation of your pension at a later date.

[rehabron]

Appendix 4 of MTSF October 2010 Buy Down ( Hours) will give you some assistance

[hubbahubba]

Ok,thanks although I am aware it would have an impact on pension shortfalls.

[Brainache]

Up until the buydown your future pension is unaffected because it is based on full time contributions. After the buydown simply boost your pension contributions with tax free AVC payments ( working/childrens tax credits go up as a result !).

[Jefferson Starfish]

Up until the buydown your future pension is unaffected because it is based on full time contributions.

But pension upto 2008 is based on final salary, so won't your pension go down?

After the buydown simply boost your pension contributions with tax free AVC payments

That's going to be harder on reduced income.

( working/childrens tax credits go up as a result !).

Only if you qualify for them in the first place.

[Brainache]

Up until the buydown your future pension is unaffected because it is based on full time contributions.

But pension upto 2008 is based on final salary, so won't your pension go down? This part of your pension is based on your full time contributions thus far, so it is a proportion of final full time equavalent salary.

After the buydown simply boost your pension contributions with tax free AVC payments

That's going to be harder on reduced income. Five quid a week ?

( working/childrens tax credits go up as a result !).

Only if you qualify for them in the first place. Obviously - Why are you so negative ? Taking buy down was the best thing I ever did . Tax credits going up makes the difference in pay much less. There is more to life than long hours .

[hubbahubba]

Brains,I know each case is different,but can you give me a rough idea of what you got and for how many hours given back?

[RobertT]

Up until the buydown your future pension is unaffected because it is based on full time contributions.

But pension upto 2008 is based on final salary, so won't your pension go down? This part of your pension is based on your full time contributions thus far, so it is a proportion of final full time equavalent salary.

Buydown will affect your pension whether that’s pension you’ve already built up or yet to accrue. Pension built up to 2008 is based on your final salary when you take the pension. So if you reduce your pay, your pension is likely to go down aswell. You can or course get round that by taking the pension & then doing buydown.

After the buydown simply boost your pension contributions with tax free AVC payments

That's going to be harder on reduced income. Five quid a week ?

I think you’re getting slightly mixed up between contributions and benefits there! You may well only have to pay £5 per week to make up your contributions but what about the RM contribution that you’re missing out on? And I assume you’re investing in Flexiplan? Which doesn’t automatically provide the guaranteed index linked pension income that the main RM scheme does. To make up that additional RM money and benefits, your weekly AVC sum would need to be more like £25-£30 if not more.

[quote="Jefferson Starfish]

( working/childrens tax credits go up as a result !).

Only if you qualify for them in the first place. Obviously - Why are you so negative ? Taking buy down was the best thing I ever did . Tax credits going up makes the difference in pay much less. There is more to life than long hours .

Everyone will be in a slightly different position and buydown may well be good for some but there are downsides which may come back to haunt some people in the future. In my opinion relying on state benefits to make up your reduced pay is quite a dangerous strategy, but if you’re happy then that’s all that matters.