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FREQUENTLY ASKED QUESTIONS

OFFER TO TRANSFER

[See "OTT – A Guide to Making Your Pension Scheme Choice" Booklet]

Why does my Personal Benefit Statement (PBS) show that I will receive preserved pension benefits under AFPS 75 when I am on a 22 year engagement and was expecting to get an Immediate Pension (IP)? (updated 28/10/05)

This is because your personal record shows that, though serving on a 22-year engagement (open for the Army), you will not complete 22 years’ reckonable (counting) service which would qualify you for an IP in AFPS 75. Within the Army, you might, for example, have a period of non-reckonable service between attestation (where counted as the first day of service) and the commencement of initial training. You might also have been in detention or on unpaid leave for a period at some point in your career.

Is anything more being done to help me better understand what benefits I might get? (updated 28/10/05)

While the PBS is accurate, we have decided that it would be helpful to send individuals in these circumstances another PBS showing IP benefits rather than preserved benefits under AFPS 75. This will allow a comparison of benefits on the basis that these individuals may be able to serve additional time to complete 22 years of pensionable service before leaving the Armed Forces. The additional PBS, printed on green paper, will be sent to individuals, with a short note of explanation.

What do I do if there is something wrong with my personal details? (updated 28/10/05)

The PBS uses the pay and rank on your personal record as at 20 April 2005 (the date when data was migrated from the mainframe to the OTT computer system). Changes since then (such as promotion or increased pay) are NOT reflected and will NOT be shown on any revised PBS. You are expected to check and confirm your personal details shown on the front of the PBS are correct. Only if the details are wrong as at 20 April 2005 should you tell your unit administrator. If they agree, they will tell the OTT Service Centre, which will issue a revised PBS, and your record will be corrected. The on-line pensions calculator is available to help with comparisons in such changed circumstances, as well as ‘what if’ questions (eg if I get promoted?).

When I joined the Armed Forces I transferred in my civilian pension. Will this show on my PBS? (updated 20/10/05)

No.

Will the PBS show a comparison of benefits including any entitlement to life commutation I may have?

No. However, you can request a pension forecast, including life commutation figures, from AFPAA(G).

Am I allowed to change my election once made? (updated 28/10/05)

Yes, but your new option must be received by the AFPAA OTT Service Centre by 31 Mar 06. After that date you will only be allowed to revisit your original decision if:

  • you are made redundant during the current drawdown up to 31 Mar 08, having made your election;
  • an error comes to light on your PBS, which may mean that you took your decision on a false basis.

Will I be eligible for the full range of AFPS 05 benefits immediately after I transfer?(updated 28/10/05)

Yes, but you will need two years’ paid service to qualify for preserved pension, ill-health and dependants’ benefits.

I have more than 35 years’ service. Why can I only transfer 35 years’ service into AFPS 05? (updated 28/10/05)

This was considered to be fair. It is because the largest pension in AFPS 75 is 48.5% of representative pay after 34 years for officers and 37 years for other ranks. Under AFPS 05, 35 years’ service gives a pension worth 50% of pensionable pay. The 35 years’ limit was also part of the transfer terms agreed with the Treasury. You can continue earning pension benefits after transfer to AFPS 05 for up to 40 years.

What happens if I decide to PVR after I have received my OTT pack? (updated 28/10/05)

If you will be leaving the Armed Forces before 6 April 2006, you are not entitled to transfer to AFPS 05. You should therefore return your pack to the OTT Service Centre. If you will be leaving on or after 6 April 2006, you should ask the OTT Service Centre for a new PBS based on your revised leaving date.

What if my OTT pack gets lost or I was away on operations, and received it outside of the window for making a choice? (updated 28/10/05)

You should contact your Unit Admin Office or the OTT Service Centre and explain the circumstances. A new pack will be issued.

I have been posted since April 2005. Will this cause problems with receiving my OTT pack? (updated 28/10/05)

Your OTT pack will be delivered to your pay statement address as at April 2005. There are mechanisms in place to ensure that your OTT pack is either forwarded to you or re-issued. But you should flag this up to your unit administrator.

Is there anyone not allowed to transfer to AFPS 05? (updated 28/10/05)

All members of AFPS 75 who will be in service on 6 April 2006 and who were in service on 5 April 2005, irrespective of the length of service remaining (even if only one day), will be given the opportunity to transfer to AFPS 05. Those personnel who are at or over age 55 and who have already received their Terminal Grant under AFPS 75 will NOT be eligible to transfer, unless they refund their TG (with interest). It should be noted that there is no provision in AFPS 05 for early payment of pension lump sum in these circumstances.

If I transfer from AFPS 75 to AFPS 05, can I also transfer benefits from another pension scheme? (updated 28/10/05)

You can transfer benefits from another public sector pension scheme up to one year after joining AFPS 05. If you leave at the normal retirement age of 55, you can transfer in private pension scheme benefits up to one year before. If you leave before the normal retirement age, you must apply one year before the preserved pension is payable (ie age 64).

What if I die before 6 April 2006? Which scheme will my dependants receive benefits from? (updated 28/10/05)

There is a special arrangement in place to cover death in service from 6 April 2005 (when AFPS 05 was introduced for new entrants) to 5 April 2006 (the day before the common Member Transfer Date for serving members of AFPS 75). During this period, AFPAA will initially award death benefits under AFPS 75. A comparison table of benefits will then be provided to your dependants, along with the Family Pension Booklet for both schemes. Your dependant will then choose which scheme they would like to receive benefits from. From 6 April 2006, members will have decided which scheme they wish to belong and the special arrangement will therefore stop. See DIB 2005/19.

If I am on loan outside the MOD or on long leave (eg maternity) during the window of opportunity to transfer to AFPS 05, will I be offered the choice to transfer? (updated 28/10/05)

Yes. You will be given the opportunity to transfer to the new scheme. You will also retain the right to remain with AFPS 75.

If I extended my service after AFPS 05 was introduced, or am commissioned from the ranks, will I have to transfer to AFPS 05 at a future date?

No. An extension of service or commissioning does not count as leaving and rejoining.

If I re-engage or re-enlist after AFPS 05 was introduced, will I have to transfer to AFPS 05 at a future date? (new question 28/10/05)

Yes, if there is a break in service of more than one calendar month.

If I transfer from one Service to another will I have to join AFPS 05?

Not if the transfer to another Service is within one month of leaving. If the break in service is more than one month this is not classed as continuous service and you would have to join AFPS 05.

If I leave the Regular Armed Forces and join MPGS do I have to join AFPS 05? (new question 18/08/05)

Not if the transfer to MPGS is within one month of leaving. If the break in service is more than one month this is not classed as continuous service and you would have to join AFPS 05.

I am on a Short Service Volunteer Commission (SSVC). Will I have to join AFPS 05 if I start another SSVC? (updated 28/10/05)

Yes, you will automatically join AFPS 05. You can keep your previous service in AFPS 75-FTRS or transfer that service into AFPS 05, but the usual time limits apply for transferring in of benefits (see the booklet ‘Transferring Benefits’ MMP/129).

If my service started before reckonable service was counted in AFPS 75 will I be credited the additional years if I transfer?

Yes. Every year of paid service in the Armed Forces (including pre-18 service for other ranks and pre-age 21 service for officers) will count when transferring across to AFPS 05 as part of the OTT, up to a maximum of 35 years. If you leave AFPS 75 with preserved benefits and, later, join the armed forces again, you will not be able to count pre-age 18 or age 21 service towards benefits in AFPS 05.

Is my UOTC service reckonable for pension purposes? (new question 22/09/05)

No. UOTC Service is TA service and is therefore not reckonable for pension purposes. It is possible that some PBS’s may have included this service in error. If this is the case, please contact your Unit Admin Office, who will arrange for the OTT Service Centre to issue you a revised PBS.

Will I still retain my reserved rights to life commutation if I transfer from AFPS 75? (updated 22/09/05)

No. Life commutation is not available under AFPS 05. Reserved rights for this remain in AFPS 75 only. If you decide to transfer to AFPS 05 you cannot opt for life or resettlement commutation even if you were eligible for this in AFPS 75. If you feel you need a life commutation assessment before you make your transfer decision, you should contact AFPAA(Glasgow) and not the OTT Service Centre.

Can former members of the Services transfer their benefits to the new scheme?

No. Only those members of the Armed Forces who are serving on 6 April 2006 will have the option to transfer to AFPS 05.

I am seconded to NETMA. Are there any differences between AFPS 75 and AFPS 05 for when I return to the Armed Forces? (new question 28/10/05)

If you are a member of AFPS 05 when you return from NETMA and want to buy reckonable service for the time seconded you will have to pay the whole of your refund of contributions from the NETMA Scheme to cover it. If you are in the same circumstances but elect to stay in AFPS 75 you will only have to pay the refunded employer’s contributions.

Will there be any change in the Cash Equivalent Transfer Value (CETV) of my pension scheme benefits if I transfer to AFPS 05? (new question 28/10/05)

Yes, as the benefits paid under AFPS 05 are different from those paid under AFPS 75. You may therefore want to consider carefully how the deferred benefits of AFPS 05 compare to those in AFPS 75 when making your decision about transferring, bearing in mind the different deferred pension ages of 65 in AFPS 05 and 60 in AFPS 75 for service up to and including 5 April 2006.

Why doesn't the calculator give me the same result as my Personal Benefit Statement (PBS)? (new question 28/10/05)

The calculator will only show your pension benefits under each scheme based on whole years and will not include days of reckonable service. It also rounds down in years so, 3 years and 200 days will be calculated as 3 years. If you input the same data as on your PBS you will get similar figures, but the calculator will always be lower than the PBS.

How can I get the best out of the calculator? (new question 28/10/05)

Your PBS will show you leaving at one of three points:

  • either with a preserved pension (before the IPP),
  • an IP or
  • a normal retirement pension (from age 55).

If you are thinking of leaving at a different point from that which is shown on your PBS, or think you might get promoted before you leave, or be on a different pay level, then the calculator will allow you to input different data from your PBS.

Can everybody use the calculator? (new question 28/10/05)

No. We were unable to cater for all personnel, so for some groups, eg MPGS and Reserve Forces, the calculator is unable to do calculations.

As an officer, if I transfer to AFPS 05 my length of commission is less than 18 years. Is anything being done about this?

Yes. Officers on an Intermediate Term Commission (16 years) who transfer to AFPS 05 with a commission of less than 18 years will be able to extend in service, so as to reach the EDP 18/40 Point.

I am contributing to an AVC (other than to increase death-in-service) under AFPS 75 (or buying added years of service). If I transfer to AFPS 05, what happens to the contributions I have made?

The scheme actuary will calculate the value of your past contributions in terms of additional reckonable service and add the figure to your reckonable service to be transferred. However, you cannot transfer more than 35 years’ service into AFPS 05.

Will I be credited additional reckonable service on transfer for headroom AVCs? (new question 28/10/05)

If your pay is above the representative rate of pay on 6 Apr 06 you will be credited with additional reckonable service. However, if your pay is below this rate at the point of transfer no additional service will be credited. Rates are published annually and available on the intranet.

If I decide to stay in AFPS 75 and had a DIS AVC which was stopped, what are my choices from 6 April 2006? (updated 28/10/05)

The DIS lump sum in AFPS 75 increased to three times representative pay for deaths on or after 6 April 2005. If you decide to stay in AFPS 75 and want to continue to buy a four times DIS lump sum benefit, you will need to apply to AFPAA to start a new contract. You will pay one-third of your original payment, as you will be buying one-third of the extra benefit you originally contracted to buy. You should advise AFPAA of your decision by 1 March 2006. Exceptionally, you will also be allowed to stop the contract if you decide you do not want to continue to pay for a DIS AVC.

What if I transfer to AFPS 05? (updated 28/10/05)

If you transfer to AFPS 05 from 6 April 2006, your DIS premiums will cease, but you will not receive anything for your past premiums, as you have had the benefit of "cover" for your service, a bit like an insurance premium.

What happens to my added years contract if I decide to transfer to AFPS 05?

It will stop and you will be credited with additional reckonable service proportionate to the premiums paid. If you want to continue buying added years, you will be able to start a new contract under AFPS 05, with new premiums based on rates equivalent to those paid before transfer.

I have a partner and children. Will either pension scheme provide benefits for my partner if I die? (updated 28/10/05)

AFPS 05 gives benefits to eligible partners (ie those in a substantial relationship). No benefits are paid to partners in AFPS 75, unless the death or injury is due to service. You can find out more about partner eligibility in DCI JS 3/04.

What about children? (updated 28/10/05)

Children are covered similarly in both schemes, except that in AFPS 75 children born of post-retirement marriages are not entitled to benefits, whereas under AFPS 05 they are.

Do I have to consult my ex-spouse before making an OTT decision? (updated 28/10/05)

When a Pension Sharing Order (PSO) is made, the financial value of the order at the time of the divorce is annotated on your file and, when the pension finally becomes payable, this sum is increased in line with pension increases and deducted from the pension which would otherwise be payable. This means that there is a clean break and that you are free to opt to change schemes or opt out altogether should you so wish.

Note that your Personal Benefit Statements will not show the effect of the PSO on your final pension, so you will need to be alert to this.

Because the preserved pension age in AFPS 05 is higher than the current preserved pension age in AFPS 75, coupled with the absence of the IP in AFPS 05, there could be serious disadvantages to those with PSOs in transferring. You are strongly advised to ask the OTT Service Centre for an illustration. The amount awarded to your ex-spouse is held completely separately – indeed, he or she becomes what is called a Pension Credit Member and this means that they are a member of the pension scheme in their own right. The pension is payable when your ex-spouse is 60 or 65 depending upon when the divorce occurred and which scheme you belonged to. Pension Credit Members will not be given the OTT and they are not permitted to transfer or add to the pension held for them.

If I am half way between divorce proceedings and dealing with difficult solicitors, what approach should I take? (updated 28/10/05)

During the transitional year AFPAA have been advised to give transfer value information in the case of divorcing couples based on the scheme that the member was actually in. We would, of course, expect that you would be open about the OTT with your own representative and we would counsel caution because of the impact of AFPS 05 rules (see above).

If I am subject to a pension sharing agreement under AFPS 75, can I transfer to AFPS 05? If so, how will the percentage be deducted? (updated 28/10/05)

When a PSO is made, the agreed sum is annotated on the Pension Debit Member’s file and a new account opened for the Pension Credit Member. In other words, they become a member in their own right, and the Pension Debit Member is free to do whatever he or she likes in relation to their pension arrangements (see above).

Can you give me a forecast of my pension less my Pension Sharing Order (PSO)? (updated 05/12/05)

Not accurately, as this depends on how long after the PSO was made that your pension comes into payment. The longer the delay and therefore the shorter the period over which your pension is paid, the larger will be the reduction to the value of your pension. This is because the pension debit (that is the share of your pension given by the PSO to your ex-spouse) has to be increased in value by a formula (laid down by law) to ensure that the full amount of the sum awarded by the PSO is recovered from you before you die (assumed for this purpose to be about age 76). When the PSO was made, its value was calculated and annotated on your file. That value was credited to your ex-spouse’s account to be held until he/she is age 60 (because that was the preserved pension age for AFPS 75 at the time of your divorce). AFPAA (Glasgow) should be asked for an illustration of the impact by those affected (tel no 0141 224 3600 or 94561 3600).

What are the redundancy terms? (updated 28/10/05)

The existing terms will continue for AFPS 75 members for the duration of the current drawdown which is due to complete by 31 March 2008. These terms will then be replaced by less generous terms, which are expected to be broadly comparable with the new AFPS 05 terms up to the mid-career break point, but, generally, significantly more valuable thereafter, though the gap will narrow as the normal retirement age is approached. Those made redundant before 31 March 2008 but after they have elected to transfer will have the opportunity to revert to membership of AFPS 75 to take advantage of the existing provisions.

If I am selected for redundancy under the current round of redundancies, but have opted to transfer to AFPS 05, must I return to AFPS 75 to take advantage of the higher redundancy benefits? (updated 28/10/05)

Yes. You will need to return to AFPS 75 to take advantage of the higher redundancy benefits, but you will then not be eligible for AFPS 05 benefits. However, redundancy compensation is only one element of the range of benefits offered under the two pension schemes and therefore should not be viewed in isolation, but as part of a total package.

Why are the redundancy compensation provisions not the same for both AFPS 75 and AFPS 05? (updated 28/10/05)

The redundancy provisions are different as they are designed to support two very different pension schemes. The 2005 terms also reflect changes across the public sector on redundancy policies. The main reason for the difference is due to the lower value of EDP when compared with the IP payable under AFPS 75.

What happens if I am made redundant from April 2008?

New arrangements will be put in place for members of both schemes. AFPS 75 benefits are generally expected to remain more valuable than those relating to AFPS 05 members, particularly for those made redundant between the IP/EDP points and the mid-40s.

If I have exercised my option to transfer to AFPS 05 before I am informed that I am to be compulsorily retired on Direct Early Retirement (DER) terms, will I be given the opportunity to review my decision? (new question 28/10/05)

Senior officers of one-star above whose early exit has been agreed under DER will have access to the redundancy compensation terms as set out in DIN 02-093. DER is used in exceptional circumstances. Each case is considered on its merits by the Services’ Central Severance Panel. Anyone selected for DER after they have elected to transfer to AFPS 05 will have the opportunity to review their decision and revert back to AFPS 75 provided their last day of service is before 1 April 2008. Once someone reverts back to AFPS 75 they will only be eligible to benefits under that scheme. Senior officers whose last day of service is on or after 1 April 2008 will not be given the opportunity to revert back to AFPS 75.

The Government is consulting civil service and NHS staff about changing their pension scheme from final salary to career average earnings. What guarantee is there that the terms of AFPS 05 will not be made less generous in the future or pension age will change? (new question 28/10/05)

AFPS 05 and AFPS 75 are subject to pensions and tax legislation, and public sector pensions policy. The terms of AFPS 05 have been agreed with the Treasury and the Inland Revenue. The rules are set out in legislation which has been approved by Parliament; future changes will likewise need Parliamentary approval. In addition, the Armed Forces Pay Review Body has agreed to look critically at AFPS 05 at least every five years and to draw the MOD’s attention to areas in which it falls short of wider industry good practice. The first such review will be in 2010, with the results published in 2011.

Why doesn’t my PBS show my Regular service prior to joining MPGS?

Very often service prior to joining the MPGS is in a rank higher than the new MPGS rank. This means a straight aggregation is not possible. (If we were to do so, you would get a pension forecast which was too low). What you can do is ask for your earlier preserved service to be given a transfer value and transferred into AFPS 05, but you need to consider this option carefully before doing anything. AFPS 75 preserved awards (prior to 6 Apr 06) are payable at age 60 but if you transfer the value into AFPS 05 and leave before age 55, your pension will be preserved until age 65.

What if I signed a form to say I wanted my earlier service to be added to my MPGS service?

In these circumstances, you may ask for a new PBS which reflects your total service.

Who can I contact for further information? (new question 28/10/05)

In the first instance you should contact your unit admin office. Alternative contacts are as follows:

 

Last Updated: 6 Dec 05