The Armed Forces Pension Scheme 2015 (AFPS 15) remedy (McCloud) is due to start being implemented from 1 October 2023.
David Roberts, Head of Pensions at the Forces Pension Society, provides some background on the remedy and the Society’s understanding of how it will be implemented…
When the new public service pension schemes were introduced in 2015 (for the Armed Forces this was the introduction of AFPS 15), transitional protection rules were put in place to ‘protect’ those who were within 10 years of their normal retirement age. For AFPS members this meant that Service Personnel who were born before 1 April 1967 were allowed to remain in their ‘legacy’ scheme (e.g. AFPS 75 or AFPS 05) whilst younger members were automatically transferred to AFPS 15. This was subsequently ruled to be age discriminatory and the Government is required to address the issue.
To remedy the situation, Armed Forces personnel who were in service both on or before 31 March 2012 and on or after 1 April 2015 with any break in service of less than 5 years will have the option to elect whether they wish to receive legacy scheme benefits (e.g. AFPS 75/05) or equivalent AFPS 15 benefits for the remedy period (1 April 2015 – 31 March 2022). On 1 April 2022 all serving personnel became members of AFPS15, and all legacy schemes closed on 31 March 2022.
Remediable Service Statements
Eligible members will all receive a Remediable Service Statement (RSS) from Veterans UK by 1 April 2025. Each RSS will be tailored to individual circumstances and will outline the value of the member’s legacy and AFPS 15 scheme benefits that were accrued during the remedy period. We understand that some cohorts such as pensioner members, imminent leavers (i.e. those retiring from the Armed Forces within 9 months from 1 October 2023) and representatives of members who have died, will be prioritised. This is because their pension is (or will be) in payment on/shortly after 1 October 2023.
After the first RSS is issued, eligible serving personnel will receive one RSS per year. Those who have left or will leave the Armed Forces with a deferred pension that is not yet in payment, may also request an annual RSS for free by contacting Veterans UK.
Eligible members who have left/will leave the Armed Forces between 1 April 2015 and 1 October 2023 with a pension in payment (including Early Departure Payments (EDPs)), and eligible dependants with a pension in payment in cases where a member has died, are in the ‘Immediate Choice’ (IC) cohort.
Eligible members leaving the Armed Forces before 1 October 2023 will do so on their current pension terms. Once IC members receive their remedy choice, they will have 12 months to submit their election from the date of issue of their RSS. Once a member has made an election, their pension will be subject to retrospective adjustment if they have chosen to receive alternative benefits (i.e. they may have an underpayment or overpayment of benefits which will be paid or recovered).
For those not in the Immediate Choice cohort, there is what is known as ‘Deferred Choice’. Personnel who are in-scope will ‘rollback’ to their relevant legacy scheme for the remedy period. They will then be able to choose between their relevant legacy scheme benefits and those that would have been offered by AFPS 15 for their service in the remedy period:
- Members leaving the Armed Forces within 9 months of 1 October 2023 (known as ‘imminent leavers’) with entitlement to immediate benefits will be sent a RSS as soon as practicable after 1 September 2023. They will have 6 months to make their election. However, if they are unable to make an election prior to their final day in service, legacy benefits will be paid pending their election. If they subsequently elect to receive AFPS 15 benefits for the remedy period, they will be applied retrospectively and, where necessary, the pension/EDP will be subject to adjustment.
- Eligible members who retire from the Armed Forces from 1 July 2024 with entitlement to immediate benefits will be provided with a RSS before they leave and will have 6 months to make their election.
- Eligible members who have left/will leave the Armed Forces with deferred benefits (i.e. without entitlement to an immediate pension or EDP) will receive an initial RSS from Veterans UK by 1 April 2025. The initial RSS will not facilitate an election choice unless/until their deferred benefits are due to come into payment. Rather this RSS will simply compare the pension benefits for the remedy period for information purposes only. Thereafter, members with deferred benefits can request one RSS per year if they wish until such time as their pension benefits are payable, at which point they will be requested to make their election.
For members who do not submit an election by the end of their specified ‘election period’, the ‘default’ position is that they will receive legacy scheme benefits based on that being the rollback position. In all cases, once an election is made or the election period ends, the choice/default position is irrevocable.
Armed Forces Pension Calculator
In advance of RSS’ being issued, the MoD revised online calculator is now available which allows serving personnel to run calculations to compare their legacy scheme benefits and AFPS 15 benefits for the remedy period.
If you are a member of the Forces Pension Society and have a pensions-related question, you can contact them via ‘Submit a Question’ in their members’ area.
If you are not a member but would like to know more about the Forces Pension Society, visit their website today.
Don’t forget to join us online during Pension Awareness Week to ask your questions and understand more about your military pension.