The Armed Forces Pension Scheme Order 2005

Entitlement to Benefits U.K.

D.1.    Retirement after reaching pension age U.K.

(1) The general rule is that a member is entitled to a pension for life and a lump sum if the member ceases to be in service by virtue of which he is eligible to be an active member of the Scheme at or after reaching pension age.

(2) The pension and the lump sum become payable immediately on the member ceasing to be in service.

(3) The amount of the annual pension payable under this rule is calculated by multiplying one seventieth of the member’s final pensionable earnings by the member’s reckonable service, expressed as a number of years.

(4) The amount of the lump sum payable under this rule is calculated by multiplying the amount of the annual pension so payable by 3.

(5) This rule does not apply to pensions derived from pension credit rights.

D.2.    Retirement before reaching pension age U.K.

(1) A member who ceases to be in service by virtue of which he is eligible to be an active member of the Scheme before reaching pension age is entitled to a pension for life and a lump sum if the member attains pension benefit age and either—

(a) he has at least two years' qualifying service, or

(b) he was formerly entitled to rights under a personal pension scheme or a retirement annuity contract in respect of which a transfer value payment has been accepted by the Scheme under Part F (transfers).

(2) The pension and the lump sum become payable immediately on the member attaining pension benefit age.

(3) The amount of the annual pension payable under this rule is calculated by multiplying one seventieth of the member’s final pensionable earnings by the member’s reckonable service, expressed as a number of years.

(4) The amount of the lump sum payable under this rule is calculated by multiplying the amount of the annual pension so payable by 3.

(5) This rule does not apply to pensions derived from pension credit rights.

D.3.    Pension credit members' pensions U.K.

(1) The general rule is that a pension credit member is entitled to a pension for life and a lump sum derived from the member’s pension credit rights.

(2) But no lump sum is payable if the pension debit member is a pensioner member when the pension sharing order under which the member is entitled to the pension credit takes effect.

(3) The pension and any lump sum become payable—

(a) immediately on the pension credit member attaining pension benefit age, or

(b) if it is later, when the pension sharing order under which the member is entitled to the pension credit takes effect.

(4) If no lump sum is payable under this rule, the pension must be of such an amount that its value is equal to the member’s pension credit, as calculated in accordance with regulations made under paragraph 5(b) of Schedule 5 to the Welfare Reform and Pensions Act 1999.

(5) If a lump sum is payable under this rule—

(a) the lump sum so payable must be equal to three times the amount of the annual pension so payable, and

(b) the pension so payable must be of such an amount that its value, when aggregated with the lump sum so payable, is equal to the member’s pension credit, as calculated in accordance with those regulations.

D.4.    Early payment of pensions with actuarial reduction U.K.

(1) A member who is not entitled to immediate payment of a pension under D.1, D.2 or D.3 apart from this rule may opt for immediate payment of a reduced pension and lump sum under rule D.2 or D.3 if the member has reached the relevant age and paragraph (2) or (3) applies.

In this paragraph “the relevant age” means—

(a) in the case of a pension credit member, 60, and

(b) otherwise, 55.

(2) This paragraph applies if the member—

(a) meets the condition in rule D.2(1)(a) or (b), and

(b) has ceased to be in service that qualifies him to belong to the Scheme.

(3) This paragraph applies if—

(a) the pension is derived from pension credit rights, and

(b) the pension sharing order from which the rights derive has taken effect.

(4) If a member exercises the option under this rule, the amount of the annual pension to which he becomes entitled is first calculated as mentioned in rule D.2(3) or, as the case may be, rule D.3(4) and then that amount is reduced by such amount as the Secretary of State determines after consulting the Scheme actuary.

This is subject to paragraph (5).

(5) If the member has a guaranteed minimum under section 14 of the Pension Schemes Act 1993 in relation to service by reference to which he is entitled to benefits under the Scheme, the weekly rate of the pension immediately payable in respect of that service (after taking into account any option exercised under rule D.10) must not be less than that guaranteed minimum, multiplied by such factor as is indicated in tables provided by the Scheme actuary for a person of the member’s age and sex at the date on which the pension becomes payable.

(6) If a member exercises the option under this rule, the amount of the lump sum to which he becomes entitled is first calculated as mentioned in rule D.2(4) or, as the case may be, rule D.3(5) and then that amount is reduced by such amount as the Secretary of State determines after consulting the Scheme actuary.

(7) The option under this rule may only be exercised by notice in writing to the Scheme administrator in such form as the Secretary of State requires.

D.5.    Early payment of benefits: active members with permanent serious ill-health U.K.

(1) An active member who ceases to be in service by virtue of which he is eligible to be an active member of the Scheme is entitled to immediate payment of a pension and a lump sum before reaching pension age if—

(a) after consultation with the Scheme medical adviser, the Secretary of State is of the opinion that the member has suffered a permanent breakdown in health involving incapacity for any full-time employment, and

(b) the member either—

(i) has at least two years' qualifying service, or

(ii) was formerly entitled to rights under a personal pension scheme or a retirement annuity contract in respect of which a transfer value payment has been accepted by the Scheme under Part F (transfers).

(2) For the purpose of these Rules a member’s breakdown in health is “permanent” if, in the opinion of the Secretary of State, after consultation with the Scheme medical adviser, it will continue at least until the member reaches pension age.

(3) For the purpose of these Rules a member’s breakdown in health involves incapacity for any full-time employment if, in the opinion of the Secretary of State, after consultation with the Scheme medical adviser, as a result of the breakdown the member is incapable of any gainful full-time employment.

(4) The amount of the annual pension payable under this rule is calculated by multiplying one seventieth of the member’s final pensionable earnings by N.

(5) For the purposes of paragraph (4), N is equal to the greater of—

(a) the sum of the member’s reckonable service and half of the further reckonable service which he would have been able to count under the Scheme if he had remained an active member from the date he ceased to be such a member until pension age (both expressed as a number of years), and

(b) 20.

(6) The amount of the lump sum payable under this rule is calculated by multiplying the amount of the annual pension so payable by 3.

D.6.    Early payment of benefits: active members with significant impairment of capacity for gainful employment U.K.

(1) An active member who ceases to be in service by virtue of which he is eligible to be an active member of the Scheme is entitled to immediate payment of a pension and a lump sum before reaching pension age if—

(a) in the opinion of the Secretary of State, after consultation with the scheme medical adviser, the member has suffered a breakdown in health as a result of which his capacity for gainful employment is significantly impaired, and

(b) the member either—

(i) has at least two years' qualifying service, or

(ii) was formerly entitled to rights under a personal pension scheme or a retirement annuity contract in respect of which a transfer value payment has been accepted by the Scheme under Part F (transfers), and

(c) the member is not entitled to a pension under rule D.5.(1).

(2) The amount of the annual pension payable under this rule is calculated by multiplying one seventieth of the member’s final pensionable earnings by N.

(3) For the purposes of paragraph (2), N is equal to the sum of the member’s reckonable service and one-third of the further reckonable service which he would have been able to count under the Scheme if he had remained an active member from the date he ceased to be such a member until pension age (both expressed as a number of years).

(4) The amount of the lump sum payable under this rule is calculated by multiplying the amount of the annual pension so payable by 3.

D.7.    Early payment of benefits: deferred members with permanent serious ill-health U.K.

(1) A former active member is entitled to immediate payment of a pension and a lump sum before reaching pension benefit age if—

(a) in the opinion of the Secretary of State, after consultation with the Scheme medical adviser and, if the Scheme medical adviser requests a further opinion, with such other person as is consulted in pursuance of that request, the member has suffered a permanent breakdown in health involving incapacity for any full-time employment (see rule D.5(2) and (3)),

(b) the member either—

(i) has at least two years' qualifying service, or

(ii) was formerly entitled to rights under a personal pension scheme or a retirement annuity contract in respect of which a transfer value payment has been accepted by the Scheme under Part F (transfers), and

(c) the member makes a claim for immediate payment of the pension and lump sum under this rule to the Scheme administrator.

(2) The amount of the annual pension payable under this rule is calculated by multiplying one seventieth of the member’s final pensionable earnings by the length of the member’s reckonable service, expressed as a number of years.

(3) The amount of the lump sum payable under this rule is calculated by multiplying the amount of the annual pension so payable by 3.

D.8.    Member’s requests for review of ill-health awards U.K.

(1) This rule applies if a member—

(a) is entitled to a pension under rule D.6, or

(b) has received a lump sum under article 16 of the Armed Forces Early Departure Payments Scheme Order 2005(1) (lump sum awards: incapacity for armed forces service) (“article 16”).

(2) The member may request a review of his condition under this rule—

(a) at any time before the fifth anniversary of the day on which the member became entitled to the pension or lump sum, or

(b) after that time if in the opinion of the Secretary of State the circumstances are exceptional.

(3) The request must be made by notice in writing in such form as the Secretary of State requires.

(4) If a member within paragraph (1)(a) requests a review of his condition under this rule, the Secretary of State must—

(a) review the question whether the member has suffered a permanent breakdown in health involving incapacity for any employment (see rule D.5(2) and (3)), and

(b) if, after consultation with the Scheme medical adviser, he is of the opinion that he has suffered such a breakdown, determine whether—

(i) the member had suffered such a breakdown at the time when he became entitled to the pension under rule D.6, or

(ii) the condition by virtue of which he became so entitled has deteriorated so that he suffered such a breakdown later.

(5) If—

(a) on any review under paragraph (4), after consultation with the Scheme medical adviser, the Secretary of State is of the opinion that the member—

(i) has suffered such a breakdown as is mentioned in paragraph (4)(a), and

(ii) had done so at the time when he became entitled to the pension under rule D.6, and

(b) the member meets the condition in rule D.5(1)(b),

then rule D.5 applies as if the conditions mentioned in that rule were met at the time the member ceased to be in service by virtue of which he was eligible to be an active member of the Scheme, and accordingly the member immediately becomes entitled to payment of such an amount as is specified in paragraph (6).

(6) The amount referred to in paragraph (5) is such an amount as represents the sum of—

(a) the difference between the pension payments that have been made to the member under rule D.6 and those to which he was actually entitled under rule D.5, and

(b) the difference between the lump sum paid to him under rule D.6 and the lump sum to which he was actually entitled under rule D.5.

(7) If—

(a) on any review under paragraph (4), after consultation with the Scheme medical adviser, the Secretary of State is of the opinion that—

(i) the member has suffered such a breakdown as is mentioned in paragraph (4)(a), but

(ii) the condition by virtue of which he became entitled to the pension under rule D.6 has deteriorated so that he suffered such a breakdown later, and

(b) the member meets the condition in rule D.5(1)(b),

then rule D.5 applies as from the date on which the review was requested, and accordingly the member is entitled to a lump sum under that rule equal to the difference between the lump sum paid to him under rule D.6 and the lump sum to which he was actually entitled under rule D.5 and to a pension under rule D.5 payable from that date.

(8) If a member within paragraph (1)(b) requests a review of his condition under this rule, the Secretary of State must—

(a) review the question whether the member has suffered a breakdown in health as a result of which his capacity for gainful employment is significantly impaired, and

(b) if, after consultation with the Scheme medical adviser, he is of the opinion that the member has suffered such a breakdown, determine whether—

(i) the member had suffered such a breakdown at the time when he became entitled to payment of the lump sum under article 16, or

(ii) the condition by virtue of which he became so entitled has deteriorated so that he suffered such a breakdown later.

(9) If—

(a) on any review under paragraph (8), after consultation with the Scheme medical adviser, the Secretary of State is of the opinion that the member—

(i) has suffered such a breakdown as is mentioned in paragraph (8)(a), and

(ii) had done so at the time when he became entitled to payment of the lump sum under article 16, and

(b) the member meets the condition in rule D.6(1)(b),

then rule D.6 applies as if the conditions mentioned in that rule were met at the time the member ceased to be in service by virtue of which he was eligible to be an active member of the Scheme, and accordingly the member is entitled to a lump sum under that rule and to a pension under that rule payable from that time (subject to paragraph (12)).

(10) If—

(a) on any review under paragraph (8), after consultation with the Scheme medical adviser, the Secretary of State is of the opinion that—

(i) the member has suffered such a breakdown as is mentioned in paragraph (8)(a), but

(ii) the condition by virtue of which he became entitled to payment of the lump sum under article 16 has deteriorated so that he suffered such a breakdown later, and

(b) the member meets the condition in rule D.6(1)(b),

then rule D.6 applies as from the date on which the review was requested, and accordingly the member is entitled to a lump sum under that rule and to a pension under that rule payable from that date (subject to paragraph (12)).

(11) If paragraph (9) or (10) applies and the lump sum paid to the member under article 16 was less than the lump sum to which he is entitled under rule D.6, the lump sum to which the member is so entitled is a lump sum equal to the difference.

(12) If paragraph (9) or (10) applies and the lump sum paid to the member under article 16 exceeded the lump sum to which he is entitled under rule D.6, then the member is not entitled to a lump sum under D.6 and the excess must be repaid.

D.9.    Secretary of State’s power to review ill-health awards U.K.

(1) This rule applies if—

(a) a member is entitled to a pension under rule D.5, D.6 or D.7, and

(b) it appears to the Secretary of State that there is evidence that he would not be of the same opinion as to the member’s condition if he reconsidered the question as the opinion by virtue of which the entitlement arose.

(2) The Secretary of State may review the member’s condition under this rule.

(3) If, on a review under this rule in the case of a member who is entitled to a pension under rule D.5, after consultation with the Scheme medical adviser, the Secretary of State is of the opinion—

(a) that the member has not suffered such a breakdown as is mentioned in D.5(1)(a), but

(b) that the member meets the condition in rule D.6(1)(a),

the Secretary of State may determine that the member is to cease to be entitled to a pension under rule D.5 and to become entitled to a pension under rule D.6 at the end of the day on which the determination is made.

(4) If, on a review under this rule in the case of a member who is entitled to a pension under rule D.6, after consultation with the Scheme medical adviser, the Secretary of State is not of the opinion mentioned in paragraph (1)(a) of that rule, the Secretary of State may determine that the member is to cease to be entitled to a pension under rule D.6 at the end of the day on which the determination is made.

(5) If, on a review under this rule in the case of a member who is entitled to a pension under rule D.7, after consultation with the Scheme medical adviser, the Secretary of State is not of the opinion mentioned in paragraph (1)(a) of that rule, the Secretary of State may determine that the member is to cease to be entitled to a pension under that rule at the end of the day on which the determination is made.

(1)

S.I. 2005/437.