The Armed Forces Pension Scheme Order 2005

Entitlement to Benefits U.K.

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

[F1 (1)  The general rule is that a member is entitled to a pension for life and a lump sum if—

(a) in the case of a member other than a fixed protection member, the member ceases to be in pensionable service at or after reaching pension age; or

(b) in the case of a fixed protection member, the member ceases to be in service 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.

Textual Amendments

F1 Rule D.1(1) substituted (10.1.2012) by The Armed Forces Redundancy Scheme 2006, the Armed Forces Redundancy Etc. Schemes 2010 and the Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/3013), arts. 1, 12

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 [F2 or, in the case of a member who is within paragraph (7) of this rule, the member attains pension age] and either—

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

(b) he [F3 is entitled to short service benefit by virtue of section 71 of the Pension Schemes Act 1993 (basic principles as to short service benefit) because of a transfer value payment having 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 [F4 or, in the case of a member who is within paragraph (7) of this rule, attaining pension 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.

[F5 (6) For the application of this rule in the case of certain Gurkha Pension Scheme transferees, see rules L.5 and L.7(1).]

[F6 (7) A member is within this paragraph if the member satisfies the following two conditions—

(a) the first condition is that the member has attained at least 54 years and 274 days of age but not yet the pension age; and

(b) the second condition is that the Scheme administrator is satisfied that the member intends either—

(i) to enter civilian employment which would not be available if the member continued in service until pension age; or

(ii) to undertake a course of full time education, or a training course, which starts before the time at which the member reaches pension age.]

Textual Amendments

F2 Words in rule D.2(1) inserted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(4)(a)

F3 Words in Sch. 1 rule D.2(1)(b) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 11(1)

F4 Words in rule D.2(2) inserted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(4)(b)

F5 Sch. 1 rule D.2(6) inserted (1.10.2007) by The Armed Forces (Gurkha Pensions) Order 2007 (S.I. 2007/2608), arts. 1(1), 3(7)

F6 Rule D.2(7) inserted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(4)(c)

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.

[F7 (3) The pension and any lump sum become payable—

(a) immediately on the pension credit member reaching 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.

[F8 (6) If a pension credit member exercises the option under rule D.4, the Secretary of State must be reasonably satisfied that the total value of the benefits payable by virtue of its exercise is at least equal to the amount described in regulation 11 of the Pension Sharing (Pension Credit Benefit) Regulations 2000 (value of alternatives to pension credit benefit).]

Textual Amendments

F7 Rule D.3(3) substituted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(5)

F8 Rule D.3(6) inserted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(6)

[F9 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 rule D.1, D.2 or [F10 D.3] may opt for immediate payment of a reduced pension and lump sum if the member has reached pension age and either paragraph (2) or paragraph (3) applies.

(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 member is a pension credit member; [F11 and]

[F12 (b) the pension sharing order from which the pension credit rights derive has taken effect.]

F13 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

(6) 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.]

Textual Amendments

F9 Sch. 1 rule D.4 substituted (6.4.2009) by The Armed Forces Pension Scheme etc. (Amendment) Order 2009 (S.I. 2009/544), arts. 1(1), 11

F10 Word in rule D.4(1) substituted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(7)

F11 Word in rule D.4(3)(a) inserted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(8)(a)

F12 Rule D.4(3)(b) substituted (27.6.2011) by The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(8)(b)

F13 Rule D.4(3)(c) omitted (27.6.2011) by virtue of The Armed Forces Pension Scheme 2005 (Amendment) Order 2011 (S.I. 2011/1364), arts. 1(1), 2(8)(c)

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—

[F14 (a) in the opinion of the Secretary of State the member has suffered a permanent breakdown in health involving incapacity for any full-time employment,

(aa) the Secretary of State has received evidence from a registered medical practitioner that the member is (and will continue to be) incapable of carrying on his occupation because of physical or mental impairment, and]

(b) the member either—

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

(ii) [F15 is entitled to short service benefit by virtue of section 71 of the Pension Schemes Act 1993 (basic principles as to short service benefit) because of a transfer value payment having been accepted] by the Scheme under Part F (transfers).

(2) [F16 For the purposes of this rule and rule D.8] a member’s breakdown in health is “permanent” if, in the opinion of the Secretary of State, F17 ... 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, F17 ... 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.

[F18 (7) For the application of this rule in the case of certain Gurkha Pension Scheme transferees, see rules L.5 and L.7(1).]

Textual Amendments

F14 Sch. 1 rules D.5(1)(a)(aa) substituted for Sch. 1 rule D.5(1)(a) (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(1)

F15 Words in Sch. 1 rule D.5(1)(b)(ii) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 11(1)

F16 Words in Sch. 1 rule D.5(2) substituted (6.4.2009) by The Armed Forces Pension Scheme etc. (Amendment) Order 2009 (S.I. 2009/544), arts. 1(1), 12(3)

F17 Words in Sch. 1 rules D.5(2), (3) revoked (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 6(3)(a), Sch.

F18 Sch. 1 rule D.5(7) inserted (1.10.2007) by The Armed Forces (Gurkha Pensions) Order 2007 (S.I. 2007/2608), arts. 1(1), 3(8)

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—

[F19 (a) in the opinion of the Secretary of State the member has suffered a breakdown in health as a result of which his capacity for gainful employment is significantly impaired,

(aa) the Secretary of State has received evidence from a registered medical practitioner that the member is (and will continue to be) incapable of carrying on his occupation because of physical or mental impairment, and]

(b) the member either—

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

(ii) [F20 is entitled to short service benefit by virtue of section 71 of the Pension Schemes Act 1993 (basic principles as to short service benefit) because of a transfer value payment having 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.

[F21 (5) For the application of this rule in the case of certain Gurkha Pension Scheme transferees, see rules L.5 and L.7(1).]

Textual Amendments

F19 Sch. 1 rules D.6(1)(a)(aa) substituted for Sch. 1 rule D.6(1)(a) (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(2)

F20 Words in Sch. 1 rule D.6(1)(b)(ii) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 11(1)

F21 Sch. 1 rule D.6(5) inserted (1.10.2007) by The Armed Forces (Gurkha Pensions) Order 2007 (S.I. 2007/2608), arts. 1(1), 3(9)

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—

[F22 (a) in the opinion of the Secretary of State the member has suffered a permanent breakdown in health involving incapacity for any full-time employment [F23 (see rule D.5(3) and paragraph (4) below),]

(aa) the Secretary of State has received evidence from a registered medical practitioner that the member is (and will continue to be) incapable of carrying on his occupation because of physical or mental impairment, and]

(b) the member either—

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

(ii) [F24 is entitled to short service benefit by virtue of section 71 of the Pension Schemes Act 1993 (basic principles as to short service benefit) because of a transfer value payment having 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.

[F25 (4) For the purposes of this Rule a member’s breakdown in health is “permanent” if, in the opinion of the Secretary of State, it will continue at least until the member reaches pension benefit age.]

Textual Amendments

F22 Sch. 1 rules D.7(1)(a)(aa) substituted for Sch. 1 rule D.7(1)(a) (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(3)

F23 Words in Sch. 1 rule D.7(1)(a) substituted (6.4.2009) by The Armed Forces Pension Scheme etc. (Amendment) Order 2009 (S.I. 2009/544), arts. 1(1), 12(4)(a)

F24 Words in Sch. 1 rule D.7(1)(b)(ii) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 11(1)

F25 Sch. 1 rule D.7(4) inserted (6.4.2009) by The Armed Forces Pension Scheme etc. (Amendment) Order 2009 (S.I. 2009/544), arts. 1(1), 12(4)(b)

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, F26 ... 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), F27 ... 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 [F28 the member’s entitlement under rule D.6 ceases and] 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.

[F29 (7) If on any review under paragraph (4), the Secretary of State is of the opinion that—

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

(b) 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,

then the member’s entitlement to a pension under rule D.6 ceases and the member is entitled to a pension calculated in accordance with paragraph (7A) from the date on which the review was requested.

(7A) The pension to which a member is entitled under paragraph (7) shall consist of—

(a) a pension calculated under rule D.5, and

(b) an increase in that pension by an amount equivalent to the amount that a pension would be increased if the option to exchange a lump sum under rule D.10 were exercised where the amount of the lump sum exchanged is the difference between the lump sum paid to the member under rule D.6 and the lump sum which the member would have received had the member been entitled to it under rule D.5.]

(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, F30 ... 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), F31 ... 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

[F32 (b) the conditions in rule D.6(1)(aa) and (b) are met,]

then rule D.6 applies [F33 from the time when the ill-health condition (as defined in paragraph 1 of Schedule 28 to the Finance Act 2004) is first met], 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), F31 ... 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

[F34 (b) the conditions in rule D.6(1)(aa) and (b) are met,]

then rule D.6 applies [F35 from the date when the ill-health condition (as defined in paragraph 1 of Schedule 28 to the Finance Act 2004) is first met], 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.

Textual Amendments

F26 Words in Sch. 1 rule D.8(4)(b) revoked (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 6(3)(b), Sch.

F27 Words in Sch. 1 rule D.8(5)(a) revoked (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 6(3)(b), Sch.

F28 Words in Sch. 1 rule D.8(5) inserted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(4)(a)

F29 Sch. 1 rules D.8(7)(7A) substituted for Sch. 1 rule D.8(7) (6.4.2009) by The Armed Forces Pension Scheme etc. (Amendment) Order 2009 (S.I. 2009/544), arts. 1(1), 12(5)

F30 Words in Sch. 1 rule D.8(8)(b) revoked (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 6(3)(b), Sch.

F31 Words in Sch. 1 rules D.8(9), (10) revoked (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 6(3)(b), Sch.

F32 Sch. 1 rule D.8(9)(b) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(4)(b)

F33 Words in Sch. 1 rule D.8(9) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(4)(c)

F34 Sch. 1 rule D.8(10)(b) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(4)(b)

F35 Words in Sch. 1 rule D.8(10) substituted (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 4(4)(d)

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, F36 ... 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, F36 ... 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, F36 ... 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.

Textual Amendments

F36 Words in Sch. 1 rules D.9(3), (4), (5) revoked (6.4.2006) by The Armed Forces Pension Scheme etc. (Amendment) Order 2006 (S.I. 2006/717), arts. 1(2), 6(3)(c), Sch.

(1)

S.I. 2005/437.