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The government has announced a 12-week consultation seeking views on how to remove the discrimination caused by the transitional rules which meant older Service Personnel (SP) remained in their legacy schemes when other, younger, SP were transferred to the reformed scheme in 2015. 

 

In 2015 the government implemented reforms to all the main public service pension schemes, including the Armed Forces Pension Scheme. The reforms included a policy of transitional protection that meant members closest to retirement stayed in their old schemes. The Court of Appeal later found the policy to be discriminatory, primarily against younger members, and so since then the government has been working to address the discrimination. Whilst the simplest option would be to put public service pension members back in their legacy schemes, the Government has been clear that it will not do this as a significant number of personnel will be better off in the reformed (2015) schemes. Therefore, the final policy design needs to allow members a choice of which scheme is better for them.

 

The public service pensions consultation is the next stage in the process to remove the discrimination identified by the courts in the 2015 pension reforms. The changes proposed in the consultation to remove the discrimination will apply across all of the main public service pension schemes and provide members with a choice of which scheme benefits they would like to receive for the remedy period.

 

Scheme members who will be in scope are those who had service on or before 31 March 2012 and on or after 1 April 2015. This includes any pre-31 March 2012 re-joiners with a qualifying break in Service of less than 5 years. This includes those members who are currently serving and in-scope personnel who have left the service since 1 April 2015.  Members who were originally covered by the transitional protection will also be provided with a choice of which scheme benefits they would prefer to receive for the remedy period.

 

The remedy period is the time period for which members will be able to retrospectively choose which scheme benefits they will receive. It will run from 1 April 2015 which is when the reforms were introduced, until 31 March 2022 which is the point when treatment will be equalised going forward. This is because the government also proposes that, with effect from 1 April 2022, all those who continue in service will do so as members of the AFPS 15 irrespective of whether they previously had transitional protection or not.

 

The Government and the Ministry of Defence have issued communications on the consultation, the options and impacts on pension schemes. Service Personnel and families are recommended to read these communications which can be accessed through MODNET or directly on the Government’s website.

 

Posted on: 17th July, 2020

Pensions

There are currently three Armed Forces Pension Schemes for members of the Armed Forces:

 

1. AFPS 75 (Armed Forces Pension Scheme 1975)

This scheme was introduced in 1975 and closed to new entrants on 5 April 2005.

 

2. AFPS 05 (Armed Forces Pension Scheme 2005)

This scheme was opened on 06 April 2005. From that date those joining the Regular Armed Forces were eligible to become members of the Armed Forces Pension Scheme 2005. Members of AFPS 75 were given the opportunity to transfer to the new scheme (this offer is now expired).

 

3. RFPS (Reserves Forces Pension Scheme)

Also introduced on 06 April 2005 for those joining Full Time Reserve Service was RFPS eligible for membership of the Reserve Forces Pension Scheme. Members of AFPS 75-FTRS (Full Time Reserve Scheme) were given the opportunity to transfer to RFPS from this date.

 

4. AFPS 15 (Armed Forces Pension Scheme 2015)

The new Armed Forces Pension Scheme was introduced on 1 April 2015. All service personnel who are members of an Armed Forces Pension Scheme and who will be serving beyond April 2015 will be automatically transferred to AFPS 15, unless they qualify for transitional protection.

 

Forces Pension Society

Forces Pension Society can help you through the understanding your pension and campaign against injustices in the system as they did when winning the right of all widows to retain their pension on remarriage. They also sit on the MOD Pensions Board and on the Public Sector Pensioners Council representing Armed Forces personnel’s interests.

 

Armed Forces Pension Calculator

The Pension & Annual Allowance Calculator provides a guide to the pension benefits you could expect to receive under Armed Forces Pension Schemes. Also see this step by step guide on how to use the calculator.

 

AFPS McCloud Judgment

The Independent Public Service Pensions Commission Final Report on 10 Mar 11 recommended changes to all Public Service Pension Schemes. The Government accepted the recommendations of the report and the Public Service Pensions Act 2013 was the legislation which introduced new pension schemes in April 2015, including the Armed Forces Pension Scheme 2015 (AFPS 15). Transitional Protection was given to all those who were within 10 years of their scheme’s Normal Pension Age on 1 Apr 12. For the Armed Forces this meant that Regular Service personnel who were aged 45 or over on 1 Apr 12 and Reserve personnel who were aged 50 or over on 1 Apr 12 could remain in their legacy pension scheme rather than transfer to the new scheme.

Members of the Judges’ and Firefighters’ pension schemes have since taken legal action claiming that the Transitional Protection arrangements that were applied to their scheme gave rise to unlawful discrimination. The Court of Appeal upheld their claim and the Supreme Court subsequently refused the Government permission to appeal the judgment.

The Government will remedy this unlawful element within the AFPS – exactly how is yet to be determined, however, Service Personnel will not see any reduction to the pensions they have earned/built up to date, irrespective of the pension scheme they are in. Click here to read the full Government statement. Click here to read an update on this judgement. 

 

Homeport Articles

Homeport, the NFF’s magazine for serving Royal Navy and Royal Marines families, has produced the below articles to help you understand more about all things pensions:

AFP app informational poster
Introducing the Armed Forces Pension App - Homeport Winter '17 (p.58)
AFPS informational poster
AFPS15/ Forces Pension Society - Homeport Summer '18 (p.6-7)
Pensions informational poster
Interview with Forces Pension Society - Homeport Winter '18 (p.48-49)
Thinking about the unthinkable informational poster
Thinking About the Unthinkable - Homeport Spring '19 (p.40-41)
FAR informational poster.
Financial Aspects of Resettlement (FAR) briefing - Homeport Summer '19 (p.46-47)
Pension sharing informational poster.
Pension Sharing - Homeport Autumn '19 (p.50-51)
McCloud Judgement informational poster
Impact of the McCloud judgement on Armed Forces Pension Schemes - Homeport Winter '19 (p.60)
Avoiding confusion with Pensions poster
Transfer to AFPS 15 - Homeport Spring '20 (p.60-61)
Posted on: 28th April, 2016
Updated on: 4th March, 2020