The Armed Forces Pension Scheme Order 2005

[F1 Chapter 1 U.K. Pension Credit and Debit Members

Textual Amendments

F1 Sch. 3 inserted (1.10.2023) by The Armed Forces Pensions (Remediable Service) Regulations 2023 (S.I. 2023/998), reg. 1(b), Sch. 2

Section 1 U.K. Application and Interpretation of Chapter 1

Application and interpretation of Chapter 1 U.K.

20.— (1) This Chapter applies in relation to—

(a) a pension credit member (“C”),

(b) the corresponding pension debit member (“D”), and

(c) the pension sharing order by virtue of which C became a pension credit member in relation to D’s remediable service (the “relevant pension sharing order”).

(2) In this Chapter—

“appropriate amount” means an amount calculated for the purposes of section 29(1) of WRPA 1999;

“cash equivalent” means an amount calculated in accordance with regulations made under section 30 of WRPA 1999;

“corresponding pension debit member” means a member of this Scheme with remediable service (whether or not by virtue of section 2(1) of PSPJOA 2022) whose benefits, or future benefits, under the Scheme are subject to a pension debit;

“legacy remediable appropriate amount” means the appropriate amount in relation to D’s remediable relevant benefits, determined as if those remediable relevant benefits had been secured in this Scheme immediately before the transfer day;

“pension credit account” means a pension credit member account in this Scheme or the reformed scheme by virtue of the relevant pension sharing order;

“pension credit member” means a member of this Scheme who has rights under the Scheme—

(a)

which are attributable (directly or indirectly) to a pension credit,

(b)

which arise by virtue of a pension sharing order with a transfer day on or after 1st April 2015, and

(c)

the value of which was determined (to any extent) by reference to the value of benefits payable in respect of the remediable service of another member;

“pension information” means information provided by the Scheme manager under regulations 2, 3 or 4 of the Pensions on Divorce etc. (Provision of Information) Regulations 2000;

“pension sharing order” means the order or provision by virtue of which section 29 of WRPA 1999 applies in relation to a pension credit member and the corresponding pension debit member;

“reformed remediable appropriate amount” means the appropriate amount in relation to D’s remediable relevant benefits, determined as if those remediable relevant benefits had been secured in the reformed scheme immediately before the transfer day;

“remediable relevant benefits” means the benefits or future benefits described in section 29(4) and (5) of WRPA 1999 to which D is entitled by virtue of remediable shareable rights;

“remediable shareable rights” means D’s shareable rights secured by virtue of D’s remediable service during the period beginning on 1st April 2015 and ending on the earlier of—

(a)

the day before the transfer day, or

(b)

the last day of D’s remediable service;

“shareable rights” has the meaning given in section 27(2) of WRPA 1999;

“transfer day” means the day on which the relevant pension sharing order takes effect;

“valuation day” has the meaning given in section 29(7) of WRPA 1999.

(3) In this Chapter, where the Scheme manager is required to determine an amount, this must be done—

(a) as soon as reasonably practicable, and

(b) with regard to the advice of the Scheme actuary.

(4) In this Chapter, a reference to benefits secured in “this Scheme” or the “legacy scheme”, means benefits secured under the rules in Schedules 1 and 2 to this instrument.

Section 2 U.K. Pension sharing orders: information provided before 1st October 2023

Application and interpretation of Section 2 U.K.

21.   This Section applies where the most recent pension information in respect of D’s remediable service was provided by the Scheme manager before 1st October 2023.

Information before 1st October 2023: unprotected member, AFPS 2005 only U.K.

22.— (1) This paragraph applies where—

(a) D was a transition member with continuity of service on or before 31st March 2022, and

(b) the relevant pension sharing order applies only to shareable rights under this Scheme, or to shareable rights under this Scheme and any other Chapter 1 legacy schemes.

(2) For the purposes of determining the pension debit under section 29(1)(a) of WRPA 1999 or the pension credit under section 29(1)(b) of WRPA 1999, D’s shareable rights do not include any rights secured by pensionable service on or after 1st April 2015.

Information and transfer day before 1st October 2023: protected members U.K.

23.— (1) This paragraph applies—

(a) where D was a full protection member of this Scheme before 1st April 2022,

(b) where the transfer day in relation to a relevant pension sharing order was before 1st October 2023, and

(c) whether or not C has a pension credit account in the reformed scheme under the relevant pension sharing order.

(2) The Scheme manager must determine—

(a) the initial appropriate amount;

(b) the remediable appropriate amount.

(3) The “initial appropriate amount” means the appropriate amount determined for the purposes of section 29(2) or (3) of WRPA 1999 in relation to D’s remediable shareable rights in this Scheme.

(4) The remediable appropriate amount is the greater of—

(a) the initial appropriate amount;

(b) the reformed remediable appropriate amount.

(5) Where the remediable appropriate amount is greater than the initial appropriate amount, C’s pension credit account is subject to an adjustment (a “remediable credit adjustment”) equal to the difference.

(6) The Scheme manager must, as soon as reasonably practicable, provide C with a statement setting out—

(a) the initial appropriate amount,

(b) the reformed remediable appropriate amount,

(c) the remediable appropriate amount,

(d) the remediable credit adjustment, if any, and

(e) where paragraph 26(4) applies in relation to C, an explanation of the request that may be made in accordance with paragraph 26(5) and the consequences of making, or not making, such a request.

(7) In determining the remediable appropriate amount for the purposes of sub-paragraph (4), the percentage value for the purposes of section 29(2) WRPA 1999 is the percentage specified in the relevant pension sharing order in relation to this Scheme.

(8) Where the relevant pension sharing order specifies an amount to be transferred, the Scheme manager must—

(a) calculate the percentage (the “implied percentage”) that the amount to be transferred represented of the cash equivalent, on the valuation day, of all D’s shareable rights under this Scheme immediately before the transfer day;

(b) determine the reformed remediable appropriate amount for the purposes of section 29(3) of WRPA 1999 by applying the implied percentage to the cash equivalent, on the valuation day, of the remediable relevant benefits as if they had been secured in the reformed scheme.

Information and transfer day before 1st October 2023: unprotected members U.K.

24.— (1) This paragraph applies where—

(a) D was a transition member with continuity of service before 1st April 2022,

(b) the transfer day in relation to a relevant pension sharing order was before 1st October 2023, and

(c) C has a pension credit account in the reformed scheme under the relevant pension sharing order.

(2) The Scheme manager must determine—

(a) the initial appropriate amount;

(b) the remediable appropriate amount.

(3) The “initial appropriate amount” means the appropriate amount determined, on the valuation day, for the purposes of section 29(2) or (3) of WRPA 1999 in relation to D’s remediable shareable rights on the transfer day in the reformed scheme.

(4) The remediable appropriate amount is the greater of—

(a) the legacy remediable appropriate amount;

(b) the initial appropriate amount.

(5) Where the remediable appropriate amount is greater than the initial appropriate amount, C’s pension credit account is subject to an adjustment (a “remediable credit adjustment”) equal to the difference.

(6) The Scheme manager must, as soon as reasonably practicable, provide C with a statement setting out—

(a) the initial appropriate amount,

(b) the legacy remediable appropriate amount,

(c) the remediable appropriate amount,

(d) the remediable credit adjustment, if any, and

(e) where paragraph 26(4) applies in relation to C, an explanation of the request that may be made in accordance with paragraph 26(5) and the consequences of making, or not making, such a request.

(7) In determining the legacy remediable appropriate amount for the purposes of sub-paragraph (4), the percentage value for the purposes of section 29(2) WRPA 1999 is the percentage value specified in the relevant pension sharing order in relation to the reformed scheme.

(8) Where the relevant pension sharing order specifies an amount to be transferred, the Scheme manager must—

(a) calculate the percentage (the “implied percentage”) that the amount to be transferred represented of the cash equivalent of D’s shareable rights under the reformed scheme on the valuation day;

(b) determine the legacy remediable appropriate amount for the purposes of section 29(3) of WRPA 1999 by applying the implied percentage to the cash equivalent of the remediable relevant benefits on the valuation day as if they had been secured in this Scheme.

Information before 1st October 2023: transfer day after 1st October U.K.

25.— (1) This paragraph applies—

(a) where the transfer day in relation to a relevant pension sharing order is on or after 1st October 2023, and

(b) whether or not the relevant pension sharing order also makes provision in relation to the reformed scheme for an appropriate amount to be transferred to C.

(2) The Scheme manager must determine the remediable appropriate amount.

(3) The remediable appropriate amount is the greater of the following amounts—

(a) the legacy remediable appropriate amount;

(b) the reformed remediable appropriate amount.

(4) The Scheme manager must transfer the legacy remediable appropriate amount to C’s pension credit account in this Scheme.

(5) Where the remediable appropriate amount is greater than the legacy remediable appropriate amount, C’s pension credit account is subject to an adjustment (a “remediable credit adjustment”) equal to the difference.

(6) The Scheme manager must, as soon as reasonably practicable, provide C with a statement setting out—

(a) the legacy remediable appropriate amount,

(b) the reformed remediable appropriate amount,

(c) the remediable appropriate amount,

(d) the remediable credit adjustment, if any, and

(e) where paragraph 26(4) applies in relation to C, an explanation of the request that may be made in accordance with paragraph 26(5) and the consequences of making, or not making, such a request.

(7) In determining the remediable appropriate amount for the purposes of sub-paragraph (4), the percentage value for the purposes of section 29(2) WRPA 1999 is—

(a) where the relevant pension sharing order specifies a percentage value in relation to this Scheme only, that percentage value;

(b) where the relevant pension sharing order specifies different percentage values in relation to this Scheme and the reformed scheme, the percentage value that is specified for the pension Scheme under which remediable relevant benefits were accrued, disregarding the effect of section 2(1) of PSPJOA 2022.

(8) Where the relevant pension sharing order specifies an amount to be transferred, the Scheme manager must—

(a) calculate the percentage (the “implied percentage”) that the initial appropriate amount represented of the cash equivalent of D’s shareable rights on the valuation day—

(i) as if they had been secured in this Scheme, where D was a full protection member before 1st April 2022, or

(ii) as if they had been secured in the reformed scheme, where D was a transition member with continuity of service before 1st April 2022;

(b) determine the legacy remediable appropriate amount for the purposes of section 29(3) of WRPA 1999 by applying the implied percentage to the cash equivalent of the remediable relevant benefits as if they had been secured in this Scheme on the valuation day;

(c) determine the reformed remediable appropriate amount for the purposes of section 29(3) of WRPA 1999 by applying the implied percentage to the cash equivalent of the remediable relevant benefits as if they had been secured in the reformed scheme on the valuation day.

Information provided before 1st October 2023: applying a remediable credit adjustment U.K.

26.— (1) This paragraph applies where C’s pension credit account is subject to a remediable credit adjustment in accordance with paragraphs 23(5), 24(5) or 25(5).

(2) The Scheme manager must adjust C’s pension credit account by an amount equal to the remediable credit adjustment.

(3) An adjustment made under sub-paragraph (2) has effect as if it had been made on the transfer day.

(4) Where C has a pension credit in the reformed scheme by virtue of the relevant pension sharing order, C may request that the value of the remediable credit adjustment is instead credited to C’s pension credit account in the reformed scheme.

(5) A request under sub-paragraph (4) must—

(a) be made by C in writing to the Scheme manager,

(b) be in a form determined by the Scheme manager,

(c) unambiguously identify C’s pension credit account in the reformed pension scheme, and

(d) be received by the Scheme manager by—

(i) the end of the day twelve months after the date on which the statement required by paragraphs 23(6), 24(6) or 25(6) was sent to C, or

(ii) the end of such later day that the Scheme manager considers reasonable in all the circumstances.

(6) A request made in accordance with sub-paragraph (5) is irrevocable.

(7) Section 14(3) to (6) of PSPJOA 2022 applies in relation to C as it applies in relation to a member described in section 14(1) as if—

(a) a reference to D’s remediable service in an employment or office were a reference to C’s pension credit;

(b) a reference to the effect, if any, of sections 2(1) and 6(4) were a reference to the effect, if any, of this paragraph;

(c) the term “operative time” means the time at which the adjustment mentioned in sub-paragraph (2) is made (disregarding sub-paragraph (3)).

Information provided before 1st October 2023: immediate choice – pension debit information U.K.

27.— (1) This paragraph applies where D is an immediate choice member of this Scheme or of the EDP 2005 Scheme where—

(a) D’s remediable relevant benefits under this Scheme are subject to a pension debit by virtue of a relevant pension sharing order,

(b) an immediate choice decision has not been made or treated as made under this Schedule or the Schedule to the EDP 2005 Order in relation to D’s remediable service, and

(c) paragraph 22 does not apply.

(2) The Scheme manager must determine the appropriate amount under section 29(1)(a) of WRPA 1999 in relation to D’s remediable relevant benefits—

(a) as if those remediable relevant benefits had been secured in this Scheme on the transfer day (“legacy remediable reduction amount”), and

(b) as if those remediable relevant benefits had been secured in the reformed scheme on the transfer day (“reformed remediable reduction amount”).

(3) For the purposes of sub-paragraph (2) the Scheme manager must have regard to—

(a) the remediable relevant benefits on the valuation day as if they had been remediable relevant benefits secured—

(i) in this Scheme on the transfer day, for sub-paragraph (2)(a);

(ii) in the reformed scheme on the transfer day, for sub-paragraph (2)(b),

(b) the percentage value or the amount to be transferred specified in the relevant pension sharing order in relation to the pension Scheme in which remediable relevant benefits were accrued, disregarding the effect of section 2(1) of PSPJOA 2022, and

(c) the provisions of sections 29 and 31 of WRPA 1999.

Information provided before 1st October 2023: immediate choice – pension debit adjustment U.K.

28.— (1) This paragraph applies where—

(a) D was an immediate choice member to whom paragraph 27 applied, and

(b) an immediate choice decision is subsequently made or treated as made under this Schedule or the Schedule to the EDP 2005 Order in relation to D’s remediable service.

(2) The Scheme manager must adjust D’s pension account in respect of D’s remediable relevant benefits so that it is subject to a debit of the reformed remediable reduction amount where an immediate choice decision is made or treated as having been made in relation to D’s remediable service under—

(a) paragraph 9(1)(a) of this Schedule, or

(b) paragraph 7(1)(a) of the Schedule to the EDP 2005 Order.

(3) The Scheme manager must adjust D’s pension account in respect of D’s remediable relevant benefits so that it is subject to a debit of the legacy remediable reduction amount where an immediate choice decision is made or treated as having been made in relation to D’s remediable service under—

(a) paragraph 9(1)(b) of this Schedule, or

(b) paragraph 7(1)(b) of the Schedule to the EDP 2005 Order.

Information provided before 1st October 2023: deferred choice – pension debit U.K.

29.— (1) This paragraph applies where D is a deferred choice member of this Scheme where—

(a) D’s remediable relevant benefits under this Scheme are subject to a pension debit by virtue of a relevant pension sharing order,

(b) a deferred choice decision has not been made or treated as made under this Schedule or the Schedule to the EDP 2005 Order in relation to D’s remediable service, and

(c) paragraph 22 does not apply.

(2) The Scheme manager must determine the appropriate amount under section 29(1)(a) of WRPA 1999 in relation to D’s remediable relevant benefits—

(a) as if those remediable relevant benefits had been secured in this Scheme on the transfer day (“legacy remediable reduction amount”), and

(b) as if those remediable relevant benefits had been secured in the reformed scheme on the transfer day (“reformed remediable reduction amount”).

(3) The Scheme manager must adjust D’s pension account so that it is subject to a debit of the legacy remediable reduction amount in respect of D’s remediable relevant benefits.

(4) For the purposes of sub-paragraph (2) the Scheme manager must have regard to—

(a) the remediable relevant benefits on the valuation day as if they had been remediable relevant benefits secured—

(i) in this Scheme on the transfer day, for sub-paragraph (2)(a);

(ii) in the reformed scheme on the transfer day, for sub-paragraph (2)(b),

(b) the percentage value or the amount to be transferred specified in the relevant pension sharing order in relation to the pension scheme in which remediable relevant benefits were accrued, disregarding the effect of section 2(1) of PSPJOA 2022, and

(c) the provisions of sections 29 and 31 of WRPA 1999.

Information provided before 1st October 2023: deferred choice member – pension debit adjustment U.K.

30.— (1) This paragraph applies where—

(a) D was a deferred choice member to whom paragraph 29 applied, and

(b) a deferred choice decision is subsequently made or treated as made under this Schedule or the Schedule to the EDP 2005 Order in relation to D’s remediable service.

(2) The Scheme manager must adjust D’s pension account in respect of D’s remediable relevant benefits so that it is subject to a debit of the reformed remediable reduction amount determined under paragraph 29 where a deferred choice decision is made or treated as having been made in relation to D’s remediable service under—

(a) paragraph 13(1)(a) of this Schedule;

(b) paragraph 10(1)(a) of the Schedule to the EDP 2005 Order.

(3) An adjustment under sub-paragraph (2) above takes effect as if it had been made on the transfer day.

Section 3 U.K. Information provided on or after 1st October 2023

Application and interpretation of Section 3 U.K.

31.   This Section applies where, on or after 1st October 2023, the Scheme manager provides pension information in respect of D’s remediable service.

Information provided on or after 1st October 2023: pension information U.K.

32.— (1) This paragraph applies where no immediate choice decision or deferred choice decision under the provisions of this Schedule or the Schedule to the EDP 2005 Order has been made in relation to D’s remediable service before the Scheme manager provided the pension information.

(2) For the purpose of providing the pension information, the Scheme manager must determine—

(a) the cash equivalent of D’s remediable rights as if those remediable rights were secured in this Scheme, and

(b) the cash equivalent of those rights as if they were secured in the reformed scheme.

(3) The value of D’s remediable rights for the purposes of section 23 of WRPA 1999 is the greater of those rights.

Information provided on or after 1st October 2023: calculation of pension credits U.K.

33.— (1) This paragraph applies where the Scheme manager must determine an appropriate amount for the purposes of section 29 of WRPA 1999.

(2) For the purpose of calculating the appropriate amount, the Scheme manager must determine—

(a) the cash equivalent of D’s remediable relevant benefits on the valuation day as if those remediable relevant benefits were in this Scheme (“the legacy scheme cash equivalent”), and

(b) the cash equivalent of those benefits on the valuation day as if they were in the reformed scheme (“the reformed scheme cash equivalent”).

(3) For the purpose of calculating the pension credit, the Scheme manager must use the greater of—

(a) the legacy scheme cash equivalent;

(b) the reformed scheme cash equivalent.

Information provided on or after 1st October 2023: pension debit U.K.

34.— (1) This paragraph applies where—

(a) where an appropriate amount must be determined for the purposes of section 29(1)(a) of WRPA 1999, and

(b) no immediate choice decision under paragraph 9(1)(a) or deferred choice decision under paragraph 13(1)(a) has been made or treated as being made in relation to D’s remediable service under this Schedule or similar provisions in the Schedule to the EDP 2005 Order.

(2) The Scheme manager must determine the appropriate amount in relation to D’s remediable relevant benefits—

(a) as if those remediable relevant benefits had been secured in this Scheme on the transfer day (“legacy remediable reduction amount”), and

(b) as if those remediable relevant benefits had been secured in the reformed scheme on the transfer day (“reformed remediable reduction amount”).

(3) Where D is a deferred choice member, the Scheme manager must adjust D’s remediable relevant benefits by the legacy remediable reduction amount.

(4) An adjustment under sub-paragraph (3) takes effect as if it had been on the transfer day.

Information provided on or after 1st October 2023: pension debit adjustment U.K.

35.— (1) This paragraph applies where—

(a) D’s remediable relevant benefits are subject to a pension debit by virtue of a relevant pension sharing order, and

(b) an immediate choice decision under paragraph 9(1)(a) or a deferred choice decision under paragraph 13(1)(a) is made or treated as being made under this Schedule or the relevant provisions of the Schedule to the EDP 2005 Order in relation to D’s remediable service.

(2) The Scheme manager must determine the appropriate amount under section 29(1)(a) of WRPA 1999 in relation to D’s remediable relevant benefits as if those remediable relevant benefits had been secured in the reformed scheme on the transfer day.

(3) The Scheme manager must adjust D’s pension account to reflect the appropriate amount determined under sub-paragraph (2) in respect of D’s remediable relevant benefits.

(4) An adjustment under sub-paragraph (3) takes effect as if it had been on the transfer day.

(5) For the purposes of sub-paragraph (2), the Scheme manager must have regard to—

(a) the remediable relevant benefits on the valuation day as if they had been remediable relevant benefits secured in the reformed scheme on the transfer day,

(b) the percentage value or the amount to be transferred specified in the relevant pension sharing order, and

(c) the provisions of sections 29 and 31 of WRPA 1999.]