The Armed Forces Redundancy Scheme 2006 and the Armed Forces Redundancy Etc. Schemes 2010 (Amendment) Order 2011

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends the Armed Forces Redundancy Scheme Order 2006 (“the AFRS Order 2006”)(S.I. 2006/55) and the Armed Forces (Redundancy, Resettlement and Gratuity Earnings Schemes) (No. 2) Order 2010 (“the AFRS Order 2010”) (S.I. 2010/832).

Part 2 amends the Armed Forces Redundancy Scheme 2006 (“the AFRS 2006”). This is the redundancy scheme for members of the Armed Forces Pension Scheme 2005, including those who have transferred to that pension scheme from the Armed Forces Pension Scheme 1975.

Article 3 of the AFRS Order 2006 is amended to make provision in respect of all active members of the Gurkha Pension Scheme.

Article 4(5) of the AFRS Order 2006 is amended so that redundancy compensation is not paid to anyone whose service is terminated on medical grounds.

Article 9 of the AFRS Order 2006 is amended to apply to officers holding at least the rank of Commodore, Brigadier or Air Commodore who have been notified that they are directed to take early retirement and that they are eligible for compensation under the AFRS 2006. The compensation that such officers receive will be calculated in the same way as if their service had been terminated under a redundancy programme.

Article 10 of the AFRS Order 2006 is amended so that if a service person has received redundancy compensation under the Armed Forces Redundancy Scheme 2010 (“the AFRS 2010”) or its predecessor the Armed Forces Redundancy Scheme 1975 for a previous period of service, that service is not taken into account when calculating compensation under the AFRS 2006.

Part 3 amends the AFRS Order 2010. That Order establishes the Armed Forces Redundancy Scheme 2010 which applies to members of the Armed Forces Pension Scheme 1975. It also establishes the Armed Forces Gratuity Earnings Scheme 2010.

Article 2 of the AFRS Order 2010 is amended to reflect the fact that there are now two types of paternity leave, being ordinary paternity leave and additional paternity leave. The amendment means that paid additional paternity leave counts as redundancy reckonable service under the AFRS 2010 and counts as service for the purposes of calculating a gratuity under Armed Forces Gratuity Earnings Scheme 2010.

Article 4 of the AFRS Order 2010 is amended to make provision in respect of all active members of the Gurkha Pension Scheme.

Article 6 of the AFRS Order 2010 is amended so that the service of a member of the Armed Forces Pension Scheme 1975 while on secondment to NATO or United Nations or a similar organisation counts as redundancy reckonable service, even where that person has not taken up the option of paying a lump sum at the end of the secondment to buy reckonable service within that pension scheme.

Article 8 of the AFRS Order 2010, which defines long service commitments, is amended for ranks other than officers.

An amendment to article 9 of the AFRS Order 2010 extends the AFRS 2010 to officers holding at least the rank of Commodore, Brigadier or Air Commodore who have been notified that they are directed to take early retirement and that they are eligible for compensation under the AFRS 2010. The compensation that such officers receive will be calculated in the same way as if their service had been terminated under a redundancy programme. Article 9 is also amended so that redundancy compensation is not paid to anyone whose service is terminated on medical grounds.

Article 12 of the AFRS Order 2010 determines the amount of compensation for personnel on long service commitments who have completed sufficient redundancy reckonable service to qualify for an immediate pension. Their compensation depends on the length of their uncompleted service, in other words the service they would have served had it not been for the redundancy or directed early retirement. One of the amendments means that all the days in excess of whole years of uncompleted service are taken into account in calculating redundancy compensation. The other amendment relates to the interim period for personnel on long service commitments with sufficient redundancy reckonable service for an immediate pension. Personnel leaving within the interim period may be paid compensation equivalent to up to 9 months’ pay, whereas those leaving after the interim period may be paid a maximum of 3 months’ pay. The amendment extends the interim period so that it ends on 31st December 2015.

Article 13 of the AFRS Order 2010, which determines the amount of compensation for personnel on short service commitments, is amended so that fractions of years of uncompleted service are taken into account when calculating compensation.

Article 16 of the AFRS Order 2010 is amended so that if a person received redundancy compensation under the Armed Forces Redundancy Scheme 1975 the service in respect of which that compensation was paid is not to be taken into account when calculating redundancy reckonable service.

Finally, article 21 of the AFRS Order 2010, which relates to the Armed Forces Gratuity Earnings Scheme 2010, is amended. The amendment to sub-paragraph (a) provides that paid additional paternity leave is to be counted as qualifying and reckonable service for the purposes of calculating a gratuity. The amendment to sub-paragraph (b) provides that the pro-rata calculation provision applies in respect of early departures following additional paternity leave and ordinary paternity leave.