SCHEDULE 1ARRANGEMENT OF RULESTHE ARMED FORCES PENSION SCHEME 2005

PART DRETIREMENT BENEFITS

Entitlement to Benefits

Early payment of pensions with actuarial reduction

F1D.4.

(1)

A member who is not entitled to immediate payment of a pension under rule D.1, D.2 or F2D.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; F3and

F4(b)

the pension sharing order from which the pension credit rights derive has taken effect.

F5(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.