AFPS 75/15

Ducktard

Please bear with me… I joined the UK Armed Forces in ‘97 at 22 yrs of age. I served to ‘16 and elected to remain on the ‘75 scheme throughout. This 18.5 yrs served on AFPS 75 gave me an immediate pension of £14.5K p.a. but I opted to take full commutation so my annual immediate award dropped to £12K until I reach 55 yrs of age when it will de-commute.

I rejoined the regular Service in ‘20 after 3 yrs out and about a year as a Reservist and my immediate AFPS 75 pension was fully abated as per the rules. IAW policy I began repaying my commutation element at a rate of c£200 per month from take home pay and must do so until I am 55 yrs of age (c4.5 yrs to go!). My understanding is that the payment I make each month will stop at age 55 even if I remain in the Service.

Having promoted just over a year ago my current contract is set to expire in 6 yrs when I will be 56.5 yrs of age. I intend to serve to MEOS 60.

Getting accurate and easy access to pension predictions is difficult for UK Armed Forces personnel, in my personal opinion. FPS now insist on you having a calculation from SPVA before they will assist so I have cancelled my membership. The advent of AFPS 15 and then the McCloud (?Sp) judgement have made things more complex. As a ‘complicated case’ I am still waiting for my RSS.

I would like to know what my immediate, full pension will be if I do get to serve to MEOS 60 meaning I then finish on increment 8 of the OF3 rank for Nursing Officers. Is there someone reliable and independent from SPVA and FPS that I can pay for accurate forecasting?

I know that at age 55 my AFPS 75 pension will de-commute and then rise by all inflationary rises since I left. How will the ‘75 pension be managed moving forward, in terms of inflation? I presume it will be treated as a separate pension for life and will rise by all inflationary increases from my 55th birthday even whilst I continue serving and adding to my AFPS 15 pension? This is my belief as it is still in payment but fully abated.

Grateful for all advice.

Silvertabby

Before someone says "ask Silvertabby' I regret this is out of my remit. (Ex Sgt Pers Admin, AFPS75 only).

This is one of the most complex Armed Forces pension questions I've seen seen, and it's one for the experts, (SPVA and/or FPS) I'm afraid.

BikingBud

I trust you have used the calculator:

https://www.mod-pc.co.uk/

And have you checked here:

https://discovermybenefits.mod.gov.uk/raf/your-pay-and-pension/armed-forces-pension-scheme-75/

Have you checked your entitlement statements on JPA?

You might also wish to visit this site:

https://www.gov.uk/guidance/veterans-uk-armed-forces-pensions-forms#armed-forces-pension-application-form

As I understand you are repaying all AFPS 75 so that should reset that accrued benefit which will then benefit from compounding of indexation see figures for last year relating to 2020 departure:

22-Jan-20	to	21-Feb-20	1.2414
22-Feb-20	to	21-Mar-20	1.2397
22-Mar-20	to	27-Apr-20	1.2379
28-Apr-20	to	27-May-20	1.2374
28-May-20	to	27-Jun-20	1.2369
28-Jun-20	to	27-Jul-20	1.2365
28-Jul-20	to	27-Aug-20	1.2358
28-Aug-20	to	27-Sep-20	1.2353
28-Sep-20	to	27-Oct-20	1.2349
28-Oct-20	to	27-Nov-20	1.2344
28-Nov-20	to	27-Dec-20	1.2339
28-Dec-20	to	27-Jan-21	1.2334

A similar but larger figure, given greater number of years should be applied when you finally draw the pension. In essence this is a 23% increase currently and will continue to grow @CPI every year. So your 14.5 should be worth ~£18k now so hopefully when you get the RSS all figures will be set at "Todays Figures" it should show this and you might wish to project forward at 1or 2%.

I would expect the lump sum to reflect 3* the increased annual figure also.

The fact that you are now accruing benefits under AFPS15 should not affect the indexation of the preserved pension if you leave it there. I suspect the difficulty is how the RSS comes out, how they offer you a short period on AFPS 15 or merge all service.

See MMP116 for details:

Effect of the Remedy on Rejoining

If you are eligible for the Remedy and rejoined in the Remedy period (1 April 15 to 31 March 22), you will be rolled back into your last open legacy scheme for your commitment type. This means your re-employed service will change from AFPS 15 to the last open scheme for your re-employed commitment type:

• AFPS 05 for regular service

• RFPS 05 for FTRS and ADC service

Any part time volunteer reserve service you had during this period will remain in AFPS 15 as there was no alternative scheme for this type of service. From 1 April 2022, all members are in the AFPS 15 scheme.

You might wish to review this and in consideration of your own timeline assess how the RSS decisions might benefit you. You might get good at spreadsheets to model and decide but consider carefully the indexation for life and the differing survivor rates for 75 and 15, how much will you leave for others.

All that said I am not a specialist but a member with vested interests and as @Silvertabby has recognised it is complex. Have you seen the Savvy Squaddie on youtube? Well worth spending some time on those videos.

Ducktard

Thank you for both responses. My understanding is that no further gratuity will be paid under the ‘75 scheme when I eventually leave as it has already paid (went in to mortgage) when I left in ‘16. The c£200 I re-pay each month is to pay back the commutation element I elected to take.

BikingBud

I would be interested to see how they present that lump sum retention in your RSS. I feel the rejoining and the McCloud RSS are 2 separate issues to be resolved separately hence the proclaimed complex case. The fact that you have invested both your lump sum and commutation into your house should not, to my mind, remove it from the reconciliation of your options that need to be presented. It might, or might not, be a small payment that is worthwhile considering for longer term benefit, you can only decide once you see the RSS and work through the figures

For mine I didn't commute and there is a lump sum adjustment in my favour, I was protected cohort going to AFPS15, and am getting a slight reduction as a blend of EDP and revised AFPS75 fully covered by the lump sum and with a nice kicker at SPA🤩

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/81897779#Comment_81897779

That makes sense, as there is no commutation option with AFPS75 when taken at 55+.