This table compares Armed Forces Pension Scheme 2015 to five other public sector schemes in four essential elements:

	Armed Forces	Civil Service	Police	Fire & Rescue	Teachers	NHS
Accrual	1/47.0	1/43.1	1/55.3	1/59.7	1/57.0	1/54.0
Increase	Earnings	Consumer Price Index (CPI)	Earnings +1.25%	Earnings	CPI +1.6%	CPI +1.5%
Direct Personal Contributions (Average)	0%	5.03%	13.11%	12.25%	9.55%	10.8%
Death-in-service (DIS) Lump Sum	4 times pensionable pay (PP)	2 times PP	3 times PP	3 times PP	3 times PP	2 times PP

The accrual rate is the rate by which the pension increases each year expressed as a fraction of PP. The AFPS 15 rate of 1/47th is bettered only by the Civil Service rate but they pay 5.03% of PP for their benefits!

Having covered the accrual rate, what about increases to pension already earned? Whilst in service, previous years’ pension earnings increase in subsequent years by Average Weekly Earnings (AWE). AWE is calculated using information based on the Monthly Wages and Salaries Survey, which samples around 9,000 employers in Great Britain. It provides estimates of monthly and annual change for the main industrial sectors. AWE has out-stripped CPI all but one of the past 5 years. Some schemes increase by more, but they pay between 9.55% and 13.11% of salary for the privilege. The Armed Forces scheme requires no direct personal contributions – although we acknowledge that the value of the pension is taken into account when the Pay Review Body makes its recommendations about Service pay. The other schemes do have direct personal contributions, and these can be changed by the scheme administrator.

Turning now to the DIS lump sum. This is the life insurance built into the pension scheme. You will notice that yours is the highest of the schemes listed and this tax-free lump sum is payable to your nominee or, if none, to your spouse, civil partner or eligible partner. If you have none of these beneficiaries, it goes to your estate and is subject to inheritance tax rules in the normal way.

Finally, and this is where the Armed Forces have had a terminal benefit which no other public sector employer replicates, the AFPS 15 Early Departure Payment (EDP) Scheme. The scheme is separate to the pension scheme, but its benefits are based on pension earnings. It provides a lump sum on discharge and an income through to State Pension Age and, should you need to, you can draw your pension early with actuarial reductions, without affecting your EDP income!

If you are a Member of the Forces Pension Society and have pensions questions, please contact us via ‘Submit a Question’ in the Members’ area on the website. If you are not a Member but would like to know more about us, visit www.forcespensionsociety.org