The MoD has released more details of the new service pension scheme which will operate from April 2015. The Ministry says that the scheme was designed after extensive consultation with over 17,500 personnel, and that there will now be a further period of consultation for personnel to make comments before the new scheme design is finalised.
This is the scheme advertised as "Future Armed Forces Pension Scheme" or "FAFPS 2015". According to the Ministry, the "benefits of the proposed new scheme" include:
• it creates one scheme for all - including reservists. There are currently several different Armed Forces pension schemes
• Service personnel won't have to make any personal contributions to their pension [BAFF comment: but the value of the pension is taken into account by the Armed Forces Pay Review Body when making pay recommendations.]
• Service personnel will receive a tax-free lump sum and monthly income if they leave the Armed Forces at age 40 and have served for over 20 years. No other public service makes any pension payment that early
• as recommended by Lord Hutton, the Normal Pension Age will be 60 - considerably lower than for other public service pensions
• accrued pension rights have been protected so there is no change to the age at which those currently serving can draw their accrued benefits, which are based on final rank and salary
• it is in line with Lord Hutton's recommendations and other public service schemes, moving to a pension based on career average earnings rather than final salary
• all members of the Armed Forces Pension Scheme who were within ten years of their Normal Pension Age on 1 April 2012 will receive transitional protection and see no change in their pension age or the amount they receive at retirement.