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FREQUENTLY ASKED QUESTIONS (ARMY SPECIFIC)

OFFER TO TRANSFER

Why is my GREEN Personal Benefit Statement (PBS) still addressed to an Officer Cadet at RMAS when I have been commissioned from RMAS since Apr 05.

This is because the data from the Army mainframe computer was migrated to the database on 20 Apr 05 and for technical reasons it has not been possible to refresh the data. Any changes to an individuals’ status since that date could not be captured on the OTT computer. Address details were renewed for most officers and soldiers as at early Oct 05; but this failed for officers commissioned since 20 Apr 05 as the link being used was Regimental Number which during that period changed from soldiers (recognised by an eight digit number), to officers (recognised by a six digit number). All officers affected by this situation will receive PBS addressed to OCDT with pension comparisons based on the pay rate for a 2Lt (£58.36) and the appropriate length of their soldier engagement before commissioning. Officers in this situation should use the pensions calculator to show a comparison based on SSC, IRC or full career as individuals think appropriate.

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)?

This is because your personnel record shows that, though serving on a 22-year open engagement 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.

Why am I getting a Personal Benefit Statement (PBS) on green paper?

There were inconsistencies with the data used in the first issue of PBSs. These meant the PBSs may have misled, as they showed preserved benefits payable at age 60 or 65 although individuals are serving on 22 year engagements which would take them through to the Immediate Pension Point. However, you should not throw away the first issue, but use it alongside the new green PBS to help with their decision.

What should I do when I receive this PBS?

With your RAO’s help, you should immediately check through the personal details on the front page of the PBS (pay, rank, pension start date, etc). This is important as the benefit forecasts on page 2 use this information. Complete and return the green receipt form to your RAO immediately. Information was taken from your record as at 20 April 2005.

What do I do if there is something wrong with my personal details?

The PBS uses the pay and rank on your personal record as at 20 April 2005. 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 on the front of the PBS. 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 calculator is available to help with comparisons in such changed circumstances, as well as ‘what if’ questions (eg what if I get promoted?).

I have not received my Offer To Transfer (OTT) booklets and PBS and need more time to consider my decision.

The majority of the OTT information is available on the MOD intranet or internet (www.mod.uk/issues/pensions) sites. Everyone is therefore able to start thinking now about their decision and should do so. You should make every effort to return the green election form to the Service Centre by 20 January 2006. If you need more time, eg. because you are away on operations or, you may take a little longer, but you must return your form in time to reach the OTT Service Centre by 1 March 2006.

What if I have already made my election?

If your choice remains the same then you need to do nothing except return the green receipt form. However, if you decide to change your decision then it is important that you return the green election form with your revised decision.

When I joined the Armed Forces I transferred in my civilian pension. Will this show on my PBS?

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?

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?

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?

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 soldiers. 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’ service.

It should be noted that the front page of the new GREEN PBS may give the impression that more than 35 years have been used for the calculation of reckonable service for pension; but the cash values of the reverse are based on a maximum transfer of 35 years exactly.

What happens if I decide to PVR after I have received my OTT pack?

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 personal benefit statement 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?

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?

OTT packs sent in July were delivered to your pay statement address as at April 2005. The new green personal benefit statement will be sent to your pay statement address as at September 2005. There are mechanisms in place to ensure that your OTT pack is forwarded to you, or a new one issued to your latest address (see above). But you should flag this up to your RAO.

Is there anyone not allowed to transfer to AFPS 05?

No. 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 it is only one day), will be given the opportunity to transfer to AFPS 05 or RFPS as appropriate. Those personnel who are at or over age 55 and who have already received their Terminal Grant (TG) 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?

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?

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 to 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?

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?

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 (MLSE) do I have to join AFPS 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?

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.

Will I still retain my reserved rights to life commutation if I transfer from AFPS 75?

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.

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. However be aware that on your Personal Benefit Statement, the AFPS 75 value will be based on the 16 year Immediate Pension (IP) Point whereas the AFPS 05 value will be based on the 18/40 IP Point.

What are the engagements recognised by the process for producing Personal Benefit Statements?

S Type 1 YR, S Type 10 YRS, S Type 11 YRS, S Type 12 YRS, S Type 2 YRS, S Type 3 YRS, S Type 4 YRS, S Type 5 YRS, S Type 6 YRS, S Type 7 YRS, S Type 8 YRS, S Type 9 YRS, S TYPE, MLSE, MOB'D RES, MOB'D TA, NOTENG, OPEN, OVER 22 YR, SSLC, TYPE 'O'.

What are the opening times for the OTT Service Centre over the holiday period?

The OTT Service is open weekdays throughout the holiday period (0830 – 1700 hours), except for 26/27 Dec 05 and 2 Jan 06.

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?

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 Death-In-Service (DIS) AVC which was stopped, what are my choices from 6 April 2006?

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?

If you transfer to AFPS 05 from 6 April 2006, your 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. Those who wish to receive a revised PBS with their purchased added years are to contact the OTT Service Centre.

I have a partner and children. Will either pension scheme provide benefits for my partner if I die?

AFPS 05 gives benefits to eligible partners of 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?

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

Do I have to consult my ex-spouse before making an OTT decision?

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 Statement 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?

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 order under AFPS 75, can I transfer to AFPS 05? If so, how will the percentage be deducted?

When a pension sharing order 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. Please see the two questions above.

What are the redundancy terms?

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 the AFPS 05, must I return to AFPS 75 to take advantage of the higher redundancy benefits?

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.

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?

Yes, provided your last day of service is before 1 Apr 08, you will be given the opportunity to revert to AFPS 75; however, once you revert you will only be eligible for benefits under that scheme. DER only applies to officers of 1* rank and above.

Are there any specific groups who cannot revert their decision should they be forced to leave the Army early?

Yes, the following people would not be allowed to revert to AFPS 75 if selected for retirement or discharge: 1* officers and above subject to the use of Pay Warrant Article 252a; soldiers subject to Manning Control Points; or soldiers on the Long Service List who are not awarded a further period of continuance on their current engagement. All individuals must consider the impact of these manning control measures (which may apply to them in the future) when making their OTT decision.

Why are the redundancy compensation provisions not the same for both the AFPS 75 and the AFPS 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 the 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.

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.

What if I am on a Short Service Commission Late Entry (SSC (LE))?

The SSC (LE) currently offers 6 years commissioned service or such additional service required to reach Immediate Pension Point (IPP). This will now be amended to allow 6 years’ commissioned service, or such additional service required to reach IPP or Early Departure Payments (EDP). Individuals currently serving on SSC(LE) who choose to transfer to AFPS 05 will have their run out date amended to ensure that they have sufficient service to meet the EDP requirements.

What if I am on the Intermediate Regular Commission (IRC) or Medium Commission (MC) for Nursing Officers on Common Terms Of Service (CTOS)?

The IRC was designed to allow an officer sufficient time to reach the IPP. This principle will remain for those on AFPS 05 and the IRC Regulations will be amended to state that an individual will be allowed sufficient service to reach IPP or EDP. Individuals currently serving on an IRC who choose to transfer to AFPS 05 will have their run out date amended to ensure that they have sufficient service to meet the EDP requirements.

What happens if I am an Officer not achieving the rank of Major?

The regulation regarding this situation will be amended such that an officer on a Regular Commission, who would normally serve until 55, but who does not get promoted to major will, in accordance with AGAI 35, be considered for retirement as a captain by the No5 Promotion Board at the IPP/EDP point. Individuals currently serving on a Reg C who choose to transfer to AFPS 05, if selected for retirement, will have their run out date amended to ensure that they have sufficient service to meet the EDP requirements.

Will the policy for Soldier Service under 18 Years Old be amended?

There is no need to amend any soldier terms of service policy as a result of the new pension scheme. Service before the age of 18 is pensionable under AFPS 05, and will be counted, however the 22-year Service period will continue to start at age 18.

What about the Graduate Antedate Rule?

Army Commissioning Regulations and Article 249 of the Pay Warrant cover the Graduate Antedate Rule. They allow an individual in certain Arms and Services, who started their undergraduate studies in the academic years 1957 – 1986 to serve beyond compulsory retirement age by a period equal to the antedate or to a maximum of 34 years’ pensionable service, whichever is the earlier. This was to allow them a similar length of service to a non-graduate. This rule will remain extant if someone wishes to transfer to AFPS 05.

What do I do if I need further guidance regarding Terms of Service?

Specific queries regarding Terms of Service should be raised through RAOs via the SPS chain of command to DM(A) and any clarification on Conditions of Service should be raised through RAOs via the SPS chain of command to DPS(A).

Why doesn't the calculator give me the same result as my Personal Benefit Statement (PBS)?

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?

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?

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.

Where can I get more information on the OTT and new schemes?

There are a suite of booklets, JSPs and further information on both the internet and intranet at the following addresses:

www.mod.uk/issues/pensions (internet)

DefenceIntranet/Admin/FindOutAboutArmedForcesPensions (intranet)

Army Briefing Notes (ABNs) as follows:

  • 24-05: Offer To Transfer To Armed Forces Pension Scheme 2005 (AFPS 05) – Update.
  • 26-05: Amendments To Terms of Service Under Armed Forces Pension Schemes 2005.

Who can I contact for further information?

In the first instance you should contact your RAO. Alternative contacts are as follows:

 

Last Updated: 6 Dec 05