Armed forces pensions – pension services managed by Veterans UK

Armed forces pensions Overview

When armed force officers attain their retirement age, they get the most substantial pension structure available in the United Kingdom. This legitimately reflects an exclusive scheme for the service they have provided to their country all through their employment with the armed forces. All officers of the armed forces are automatically registered into the Armed Forces Pension scheme and unlike all other schemes, here officers pay 0% in contributions every month. The structure is also secured by regulation, so it can be banked upon. Armed force officers can estimate their final pension through an online pension calculator. The Armed Forces Pension and Annual Allowance Calculator (AFPAAC) encompasses an estimate of remunerations from the Armed Forces Pension system. The calculator is intended to be used by Military Provost Guard Service (MPGS), Regular Service, and Reserve member personnel comprising those with Transitional Protection. In order to encourage the armed forces pension scheme, Veterans UK (discussed in details later) launched a movement to inspire Veterans, Service Personnel, and their relatives to get ‘Pension Ready’

Also Read: HMRC Deploying an Army to Recoup Lost Taxes

Types of pension schemes

There are 3 amendments of the Armed Forces Pension scheme – each of the three schemes are titled after the year in which they were put into practice. Below mentioned are the three pension schemes:

• 1975 scheme
• 2005 scheme
• 2015 scheme

The first 2 i.e. 1975 scheme and 2005 scheme are locked for new recruits. The 2015 scheme was presented, post the Hutton assessment of pension schemes, as the residents life expectancy rates were increasing, hence, there was a necessity to make certain that disbursements of armed forces pensions were workable. In case the officials are not sure about the scheme they fall into, please refer the contact information below:

Also Read: Pension Tax Relief

Armed forces pensions enquiries:

Address: Joint Personnel Administration Centre (JPAC), Mail Point 480

Kentigern House, 65 Brown Street

Glasgow G2 8EX

Telephone number: 0800 085 3600

Armed Forces Pension Scheme 2005

This pension scheme is applicable for regular service recruits, for all new applicants to the United Kingdom armed forces beginning 6-Apr-2005, and also for those who were shifted from AFPS 75 on 6-Apr-2006. For the reserve forces, there is another pension scheme referred to as the Reserve Forces Pension Scheme 05 (RFPS 05).

Armed Forces Pension Scheme 2015

The latest Armed Forces Pension structure was introduced in Apr-15. According to the new scheme, all service persons who are affiliates of an Armed Forces Pension Scheme and those who will be recruited beyond Apr-15 will be, by design of the scheme, transferred to AFPS 15, unless they meet the requirements for transitional protection. Lord Hutton of Furness was asked, by the government in 2010, to chair the Independent Public Service Pensions Commission (IPSPC). The IPSPC made its ultimate report on Mar-11 and suggested modifications to the whole public service pensions, comprising those for the Armed Forces. The government set out its chosen scheme proposal for public service pension in the HM Treasury paper ‘Public service pensions: good pensions that last’.

Also Read: Workplace Pension UK

Main scheme design parameters

• An employer cost cap to offer backstop safety to the taxpayer in contradiction of unanticipated charges and risks
• A choice to transform pension income into a exempt from taxation lump sum at transfer rate of £12 for £1 per yearly pension income up to HMRC limits
• Abatement will not be applicable to provision in the new scheme. Abatement rules for the existing schemes will stay unchanged
• An Early Departure Payment (EDP) scheme is accessible to officers who leave prior to Normal Pension Age (NPA), on completing of 20 years of service. Other conditions include – an officer who has reached 40 years of age or above, annual income of a minimum of 34% of the worth of the deferred pension, and a non-taxable total of 2.25 times the worth of the deferred pension. Additionally, service personnel will have an option to transform their entire EDP into supplementary monthly income disbursements
• Normal Pension Age of 60 and a Deferred Pension Age (DPA) associated to the State Pension Age (SPA)
• An option for scheme affiliates to give Additional Voluntary Contributions computed on an actuarially reasonable basis
• Death, ill-health, and survivors’ benefits based on those presently delivered in AFPS 05
• Early retirement from age 55, with advantages to be actuarially reduced
• EDP monthly income ceases at the Deferred Pension Age, when it will be replaced by the deferred pension in full
• Members of the scheme will continue to make no contributions
• Members re-joining post a period of deferment which is not more than 5 years can link new service with previous service
• Members shifting between public service schemes to be considered as having continuous service
• No maximum provision and no upper age perimeter for receiving of benefits
• No supplementary transitional arrangements further than the Government’s 10 year promise
• Pension accrual rate of 1/47th of pension earnings each year
• Pension is computed on Career Average Revalued Earnings (CARE)
• Pension in payment and deferred benefits to rise by CPI
• Reassessment of active affiliates’ benefit to be in line with average income

Transitional protection

The United Kingdom government has provided transitional protection to members who were inside 10 years of their individual scheme’s standard pension age on 1-Apr-12. Armed forces pensions scheme (AFPS) 75, Armed forces pensions scheme (AFPS) 05, and Full Time Reserve Service (FTRS) 97 have a Normal Pension Age of 55. Reserve Forces Pension Scheme (RFPS), FTRS 97, and Non Regular Permanent Staff (NRPS) have a Normal Pension Age of 60. This means, if an individual is a member of AFPS 05, AFPS 75, or FTRS 97 (FC) and is aged 45 or above on 1-Apr-12, he/she will continue to be on their current pension scheme and benefits will be unaffected. Furthermore, if an individual is a member of the RFPS, FTRS 97 (on LC or HC) or NRPS and is aged 50 or above on 1-Apr-12, then an individual will remain in their current pension scheme and benefits will be unaffected. Approximately 7,800 officers and 7,000 supplementary ranks will benefit from transitional protection.

Veterans UK

Veterans UK is governed by the UK MoD (Ministry of Defence) and it is an out-and-out support organisation for armed forces personnel, veterans, and their relatives. Veterans UK administer the war pension, armed forces pension scheme, and armed forces compensation scheme. It also provides a fully dedicated welfare service and round-the-clock freephone helpline for veterans, and their families. Veterans UK takes accountability of the following:

• Pensions and Compensation

  There are numerous compensation schemes, controlled by Veterans UK on behalf of UK MoD, which are available to assist present and ex-armed officials who got injured during their tenure in the Armed Forces.

  • Armed Forces Compensation Scheme (AFCS)

    Under the Armed Forces Compensation Scheme (AFCS), armed personnel can claim for injury or an illness that was caused during the service tenure on or post 6-Apr-05.

  • War Disablement Pension

    Award, assessment, payment, war pensions, associated allowances, and additional payments for those bereaved or disabled during service prior to 5-Apr-05.

  • Armed Forces Pensions

    For those who have served in the Armed forces, Veterans UK controls the Armed Forces Pensions schemes. It is imperative to keep Veterans UK informed about the current address particularly when an individual reaches retirement age.

• Veterans Welfare Service (VWS)

  The Veterans Welfare Service (VWS) is dedicated towards augmenting the quality of life for veterans and all their dependants through a national network of welfare managers across the Republic of Ireland and the United Kingdom. Veterans UK provides one-to-one guidance through home visit or on telephone. Also, it provides support to facilitate the continuous transition from assisting bereaved families, or responding to life events that require welfare needs. Its helpline staff (helpline number: 0808 1914 2 18) provides detailed guidance on Armed Forces Compensation scheme and War Disablement Pension claims. Additionally, the helpline provides advice on other issues such as loans and grants, pensions, benefits, pensions, emergency accommodation, health issues, finding a job, welfare concerns, retraining, service records and medals.

• Ilford Park Polish Home

  Ilford Park Polish Home is a nursing care and residential place based in Devon for ex-Polish force members who were under British command in World War 2. It is also open for people who were moved from Poland after World War 2. Ilford Park Polish Home aims to meet a wartime commitment made by Winston Churchill.

Armed forces pensions Application form

Completed and signed Armed Forces Pension Scheme application forms must be sent to Veterans UK at the below mentioned address:

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.