Pensions – Introduction
2007 Pension Code – Armed Forces Pension Scheme – Revised Rates of
Non-Effective Benefits for the Royal Navy, Army and Royal Air Force
1. The existing rates of Service Retired Pay and Pensions, Service Invaliding Retired Pay and Pensions, Service Attributable Retired Pay and Pensions, certain Gratuities and Resettlement Grants have been revised.
2. The revised rates, which are contained in the attached Annexes, apply to all personnel who are members of the Armed Forces Pension Scheme below the rank of OF 7 (Major General) whose last day of service is on or after 31 March 2007. The revision takes account of the 2007 pay increases.
Service Retired Pay - Officers . . . . . . . . . . . . . . . Annex A
Gratuities - Officers . . . . . . . . . . . . . . . . . . . . . . . Annex B
Pensions - Soldiers and Other Ranks . . . . . . . . . . Annex C
Gratuities - Soldiers and Other Ranks . . . . . . . . . . Annex D
Attributable Pensions and Gratuities - Widows and
Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex E
Resettlement Grants - Officers, Soldiers and
Other Ranks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex F
General Pension Information
The Armed Forces occupational pensions scheme, the AFPS, provides a valuable pension package for regular Service personnel which includes enhanced attributable death and injury benefits. Benefits can be further enhanced by members through Additional Voluntary Contributions. For further information refer to the booklet, Your Pension Scheme Explained, which was recently provided to all Service personnel. Attributable death and injury benefits are also paid to Reservists under the Reserve Forces (Attributable Benefits Etc) Regulations. Details can be found on the Ministry of Defence website
In addition the War Pension Scheme provides compensation for ex-Service personnel disabled due to service (ie a disablement pension and supplementary allowances) and to the families of those whose death is due to service. Further information is available from the Veterans Agency Help Line UK Free phone 0800 1692277 (Overseas +44 1253 866043) or visit www.veteransagency.mod.uk.
Regular personnel who are members of the AFPS can make Additional Voluntary Contributions during service (to retirement) to increase Death-In-Service benefits from one to four times salary. Details are available from relevant Service Pension Awarding branches. Death-In-Service benefits are increased if death is attributable to service. Additional benefits are payable if there is a qualifying widow/widower).
As a Regular soldier you are automatically a member of the Armed Forces’ Pension Scheme (AFPS). You do not contribute directly from your pay into a pension fund, but the AFPRB does make an adjustment to your salary to take into account the relevant benefits of the Services' scheme when compared with civilian pension arrangements. The main advantage of the Services' scheme is that you receive an immediate pension after 22 years' reckonable service (for soldiers from the age of 18) or 16 years' reckonable service (for officers from the age of 21). This variation is historical and is being reviewed.
The AFPS covers many different circumstances, from normal retirement to retirement on medical grounds, and to pensions for widows, widowers and children. All the rates are usually revised annually on 1 April. Your RAO staff will have further information, but some of the main features are:
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Immediate Pensions. Officers may receive an immediate pension on discharge once they have completed 16 years’ reckonable service from the age of 21. Soldiers may receive an immediate pension on discharge once they have completed 22 years’ reckonable service from the age of 18. The level of pension in both cases would represent approximately 30% of the salary for the rank of the individual officer or soldier. A gratuity of three times the annual rate of pension awarded is payable in all cases. If you are eligible to receive an immediate pension, you can also opt to give up a portion of your pension in return for a lump sum - this is known as resettlement commutation. Commutation is, however, a privilege and not a right and you must apply for it before you are 55.
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Preserved Pensions. If you leave the Army with insufficient service for an immediate pension, you are entitled to a ‘preserved pension’, provided that you have at least 2 years’ service (counting from the age of 21 for officers and 18 for soldiers). Preserved pensions are payable at the age of 60, or earlier in the event of permanent disablement. Gratuities are also paid at this time, again at the rate of three times the annual pension awarded.
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Resettlement Grants. In addition to a preserved pension, officers who complete at least 9 years’ service from the age of 21 and soldiers who complete at least 12 years’ service from age 18, receive a resettlement grant. Rates are held by your RAO staff and are usually revised annually on 1 April. If you receive an immediate pension, you will not be entitled to a resettlement grant as well.
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Index Linking. Immediate pensions are not increased at all until you reach the age of 55, at which time they are increased to include all pension increases that have been introduced since the pension was first paid. Rates are increased annually thereafter. When preserved pensions are issued at age 60, they are revised to take into account any increases in pension rates since the pension was earned. Rates are increased annually thereafter.
The subject of Pensions is a complex one and you are strongly advised to seek the assistance of your RAO staff if you need detailed information.
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