PART 2Amendment of the Armed Forces Pension Scheme Order 2005
Amendment of the Armed Forces Pension Scheme Order 2005
2
1
Schedule 1 to the Armed Forces Pension Scheme Order 2005 (the Armed Forces Pension Scheme 2005)3 is amended as follows.
2
In rule A.1(4) (interpretation: general), insert in the appropriate places in the alphabetical order the following definitions—
“flexible service” means one or both of the following types of service—
- a
part-time service;
- b
restricted separation service,
and references to a member serving on flexible terms must be construed accordingly;
“part-time service” means—
- a
for enlisted members, a period of service where the member is serving in accordance with an arrangement provided for in regulations made under section 329(2)(ha) of the Armed Forces Act 20064;
- b
for members who are officers, a period of service on equivalent terms of service;
“restricted separation service” means—
- a
for enlisted members, a period of service where the member is serving in accordance with an arrangement which does not restrict the member’s service in a particular area but does make it subject to other geographic restrictions provided for in regulations made under section 329(2)(i) of the Armed Forces Act 20065;
- b
for members who are officers, a period of service on equivalent terms of service;
“service reduction percentage” has the meaning given in rule A.2A;
3
After rule A.2 (meaning of “pensionable earnings”), insert—
A.2AMeaning of “service reduction percentage”
1
In these Rules, the “service reduction percentage” in respect of a period of flexible service is given by the formula, expressed as a percentage—
Where—
A is the basic pay which the member would have received in respect of that period of flexible service had the member not been serving on flexible terms;
B is the basic pay received by the member in respect of that period of flexible service.
2
For the purposes of the Scheme, a period of flexible service ends and another begins when any change in the service reduction percentage occurs.
4
In rule A.4 (meaning of “final pensionable earnings”), after paragraph (1), insert—
1A
Where a member served on flexible terms during any part of the period of 3 years mentioned in paragraph (1), the member’s final pensionable earnings are calculated as though the member had not served on flexible terms for that period.
5
In rule A.8 (reckonable service)—
a
in paragraph (1), in the full out words after sub-paragraph (i), for “paragraph (2)” substitute “paragraphs (2) and (3)”;
b
after paragraph (2), insert—
3
Where a member has served on flexible terms, the reckonable service the member is entitled to count for each period of such service is reduced by the service reduction percentage applicable to that period of flexible service.
6
In rule C.1 (member’s option to pay contributions to increase service)—
a
in paragraph (5), for “If a member” substitute “Subject to paragraphs (5A) and (6), if a member”;
b
after paragraph (5), insert—
5A
Subject to paragraph (6), where a member who has exercised the option under paragraph (1) is serving on flexible terms—
a
the member may, for the period of that flexible service, pay the same amount of contributions as would be payable if the member was not serving on flexible terms; and
b
if the member does not pay the contributions under sub-paragraph (a), the member may opt, within the period of 365 days beginning with the first day after the period of flexible service has ended, to pay the difference between the amount of contributions the member would have paid under sub-paragraph (a) and the contributions actually paid—
i
by such instalments as the member may agree with the Scheme administrator; or
ii
by lump sum.
7
In rule C.3 (effect of making contributions)—
a
in paragraph (2), after sub-paragraph (b), insert—
ba
a member has served on flexible terms during any part of the contractual option period,
b
after paragraph (5), insert—
6
Where the member has served on flexible terms during the contractual option period—
a
for the purposes of paragraph (3), a contribution paid under rule C.1(5A)(a) or (b) is treated as a contribution paid at the rate originally required under the contract,
b
for the purposes of paragraph (4), a contribution paid under rule C.1(5)(a) in respect of a period of flexible service where the member has not opted to pay the difference under rule C.1(5A)(b) is treated as a contribution paid at a reduced rate.
7
In this rule, “the contractual option period” has the meaning given by rule C.1(7).
8
In rule E.3 (amount of pensions under rules E.1 and E.2: active members), omit paragraph (6)(a)6.
9
In rule E.4 (amount of pensions under rules E.1 and E.2: deferred members), omit paragraph (3)(a)7.
10
In rule E.5 (amount of pensions under rules E.1 and E.2: pensioner members), omit paragraph (3)(a)8.
11
In rule E.21 (nominations for lump sum death benefits), after paragraph (6), insert—
7
Where the member marries or enters into a civil partnership on or after 1st December 2018, any existing nomination ceases to have effect from the date of the marriage or civil partnership.
12
In rule H.2 (abatement of pensions on re-employment: general rules), after paragraph (1), insert—
1A
For the purposes of paragraph (1), where the re-employed pensioner was serving on flexible terms on the last day of the re-employed pensioner’s old service, the old rate is calculated as though the re-employed pensioner had not been serving on flexible terms on that day.
13
In rule H.3 (abatement of pensions: effect of changes after re-employment)—
a
for paragraph (1), substitute—
1
This rule applies each time one of the following events (“the re-employment event”) occurs after the re-employed pensioner enters the new service—
a
the re-employed pensioner is re-employed in another post;
b
the post in which the re-employed pensioner has been re-employed is regraded;
c
the re-employed pensioner commences a period of service on flexible terms, including where the re-employed pensioner resumes a period of such service following a period in which that service was suspended; or
d
the re-employed pensioner’s period of flexible service is varied, suspended for more than 30 consecutive days or terminated.
b
in paragraph (2), for “re-employment or regrading” substitute “re-employment event”.
14
In rule H.5 (adjustment of basic pay in old service), after paragraph (2), insert—
3
For the purposes of this rule, where the re-employed pensioner was serving on flexible terms on the last day of the re-employed pensioner’s old service, the annual rate of the basic pay payable to the re-employed pensioner is calculated as though the re-employed pensioner had not been serving on flexible terms on that day.
3
1
Schedule 2 to the Armed Forces Pension Order 2005 (transitional provision)9 is amended as follows.
2
In paragraph 1 (interpretation), insert in the appropriate places in the alphabetical order the following definitions—
“flexible service” has the meaning given in rule A.1(4) of Schedule 1;
“part-time service” has the meaning given in rule A.1(4) of Schedule 1;
“restricted separation service” has the meaning given in rule A.1(4) of Schedule 1;
“service reduction percentage” has the meaning given in rule A.2A of Schedule 1;
3
In paragraph 14 (active transition member with permanent serious ill-health who leaves service before reaching age 55)—
a
in sub-paragraph (4), after sub-paragraph (c) of the substituted rule D.5(5) insert—
d
For the purposes of calculating the member’s pensionable service in the AFPS 2015 under this rule, any period of pensionable service which is also a period when the member has served on flexible terms is reduced by the service reduction percentage applicable to that period of service.
b
in sub-paragraph (5), after sub-paragraph (d) of the substituted regulation 54(2)(b) insert—
e
For the purposes of calculating the member’s pensionable service in the AFPS 2015 under sub-paragraphs (b)(i), (c) and (d)(ii)(aa), any period of pensionable service which is also a period when the member has served on flexible terms is reduced by the service reduction percentage applicable to that period of service.
4
In paragraph 17 (active transition member with significant impairment of capacity for gainful employment who leaves service before reaching age 55)—
a
in sub-paragraph (4), after sub-paragraph (c) of the substituted rule D.6(3) insert—
d
For the purposes of calculating the member’s pensionable service in the AFPS 2015 under this rule, any period of pensionable service which is also a period when the member has served on flexible terms is reduced by the service reduction percentage applicable to that period of service.
b
in sub-paragraph (5), after sub-paragraph (d) of the substituted regulation 55(2)(b) insert—
e
For the purposes of calculating the member’s pensionable service in the AFPS 2015 under sub-paragraphs (b)(i) and (c), any period of pensionable service which is also a period when the member has served on flexible terms is reduced by the service reduction percentage applicable to that period of service.
5
In paragraph 40 (final salary link for a transition member with continuity of service), for sub-paragraph (2), substitute—
2
If a member’s final pensionable earnings on leaving service as a member of AFPS 2015 are lower than the member’s final pensionable earnings on their last day of reckonable service in the AFPS 2005, the member’s final pensionable earnings are to be determined as if paragraph (1) of rule A.4 of the AFPS 2015 were replaced by the following—
1
In these Rules, “final pensionable earnings”, in relation to a member, means the greatest amount that is the member’s total pensionable earnings for 365 consecutive days falling within the period beginning three years before their last day of reckonable service in the AFPS 2005.