Options and Timetable
Did you know that on April 6 2005 three new schemes has been introduced – the Armed Forces Pension Scheme 2005 (AFPS 05), the Reserve Forces Pension Scheme (RFPS), and the Armed Forces Compensation Scheme (AFCS)? Now, this might not seem the most exciting news, but what could be more important than something that will have an effect on you and your family. Not only for the rest of your life (if you are serving), but even after you are no longer around?

If you are serving on 6 April 2006 you will be given the opportunity to transfer to the new pension scheme. But you can, if you choose, stay in the current scheme. You will be covered by the AFCS whichever pension scheme you are in. You may already know all about these schemes, in which case – well done! But if you think that you might need reminding, then read before checking out the MOD pension calculator.

The key features of AFPS 05 are:

• Benefits based on a final pensionable salary (instead of representative pay rates), with common terms for officers and other ranks.
• A new system of Early Departure Payments (EDPs) from age 40 for those with at least 18 years’ service, to replace the current Immediate Pension. EDPs will be payable until the preserved pension comes into payment at age 65.
• Improved dependants’ benefits: including a major increase in widows’ and widowers’ pensions, payable for life (not ceasing on remarriage or cohabitation as in the current pension scheme). The death in-Service gratuity has been increased to 4 times pensionable salary. Benefits will be extended to partners (including same sex) who can demonstrate they are in a substantial relationship.
• New three-tier, non-attributable (not due to service) ill-health arrangements. The new compensation scheme replaces provisions under the current War Pensions Scheme and the Armed Forces Pension Scheme 1975 (AFPS 75) attributable (due to service) benefits. Anyone, including retired personnel, suffering bereavement, injury, or illness due to service after 6 April 2005 will automatically be covered by the scheme, even if they have chosen to remain in AFPS 75. The current arrangements will remain in force for those already awarded a War Pension or AFPS 75 attributable benefits and for those that suffer injury, ill-health or death which is caused by service before 6 April 2005.

Some key features of the AFCS are:

• A much better focus on the most severely disabled.
• Compensation for attributable ill-health, injury or death will be paid to both ex- Service, Regular (including Gurkhas) and Reservist personnel and their dependants.
• The AFCS is based on a lump sum award for pain and suffering, within a 15 tier injury and illness tariff. For the more seriously injured, Guaranteed Income Payments (GIPs) will be available to compensate for loss of earnings, with an income stream calculated on salary, the number of years to normal retirement age of 55 and full pension. Lump sums will also be available to those who are injured or ill, but are not medically discharged. Any GIPs will not be paid until after discharge from the Service.

There is a free Veterans Agency helpline to answer queries on the AFCS: 0800 169 2277

An Offer to Transfer (OTT) information pack will be sent to eligible personnel between July and September 2005, to help them make a decision about which pension scheme to belong to. On receipt of the OTT pack, they will have three months in which to make the decision. The pack will include a booklet giving details of the new scheme, with an ‘ata- glance’ comparison of benefits, and an individual personal benefit statement showing an individual’s entitlement under both schemes. An interactive, web-based calculator is also being developed, to help personnel consider questions like ‘what if I get promoted’.

MOD staff (Service or civilian) cannot advise individuals about whether to transfer – it really is a personal decision for you and your family. If help is needed, you should seek independent financial advice (unit administration offices will have a list of possible advisers) however, this will not be arranged or paid for by the MOD.

We are planning a comprehensive programme of presentations and publicity, using a range of media – more magazine articles, booklets, roadshows, for example.There will also be a dedicated helpline - the OTT Service Centre, which will open for business in July.

Don’t forget, there is also plenty of information available, including RFPS material, on the internet sites at:
http://www.mod.uk/DefenceInternet/AboutDefence/WhatWeDo/Personnel/Pensions/ArmedForcesPensions/
www.veteransagency.mod.uk

If you have any general questions on pension policy, you can e-mail:

SPPol Pensions-NewAFPSPol-Office (using the MOD Intranet) or
SPPolPensions-NewAFPSPol-Office@mod.uk (using the internet).

Pensions Calculator
The calculator has been designed to assist all those who are eligible for the Offer to Transfer (OTT) from Armed Forces Pension Scheme 1975 (AFPS 75) to Armed Forces Pension Scheme 2005 (AFPS 05). By following a series of questions, and using drop-down menus, the calculator will allow you to compare benefits under AFPS 75 and AFPS 05 based on different views of your future rank and leaving date. Go to http://www.mod.uk/DefenceInternet/AboutDefence/Issues/Pensions/PensionsCalculator.htm

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