What About An AFPS Pension?
By Dave Scholey, Regional Manager South East
This is one of the most frequent questions I get asked in my day to day role, so I thought it worthy of a blog. While all circumstances are different, hopefully the following information will cover the vast majority of cases. If it’s still not clear, please feel free to give us a call and we can go through your circumstances with you. I’ll try to cover those who have not yet left as well as those who may have left many years ago. You can find most of the information concerning the various Armed Forces pension schemes at AFPS Guides.
In most cases it’s usually somebody leaving the RN/RM shortly and expecting to be on immediate benefit terms. Either they are getting immediate pension from AFPS75 or they are going on EDP terms from AFPS05. However, since 2015, most people now go on a combination package with either AFPS75 or AFPS05 coupled with the new AFPS15. There is an exception for those people who were 45 years of age or older on 1st April 2012. Those people became Transition Protected Members and didn’t have to move over on to AFPS15. Nice and simple for those, they only have one scheme to worry about.
For those getting ready to leave on hopefully immediate benefits, there is a routine you have to go through. Firstly, you might want to brush up on the schemes applicable to you. Don’t forget to check the Dependants Benefits for each as well. AFPS75 is very different to AFPS05 & 15. Next you will need to apply for the pension/EDP. Two ways of doing this; apply using a downloaded hard copy Form 1. In my view, not a good idea as it’s rather cumbersome as it covers all schemes and not just yours. Veterans UK prefer you not to use that method either. The other option is to apply online via your JPA account. Log on and select ‘Self Service Employee’ In there you’ll see ‘Pension Application Form1’ as about the twelfth item in the list. You can usually do this from around 9 months prior to your TX Date. It would be a good idea to take a look at the Form 1 some time before you choose to fill it in as you’ll probably be unsure about how to answer some of the questions which come up. If you get stuck, give us a call. Other than that you can complete the form at any time before you lose access to your JPA account. After you’ve successfully submitted or amended it you will get a ‘workflow notification’ within 48 hours. Remember, if you don’t apply, you won’t get the pension/EDP.
The next step to getting your money is all on the part of Veterans UK and its private contractor Equiniti Paymaster. Veterans UK are the Pension Administrating Authority. They own it and work out all your entitlements. They are also the people your other half has to inform if you die. Equiniti Paymaster is responsible for actually getting the pension/EDP Income payments to you on behalf of Veterans UK. They deduct the tax on the regular payments and pay what’s left to your bank account. Both agencies will write to you about a week after your TX date, informing you about what they do, what you’re getting, how the tax is worked out and how to complain if it goes wrong.
Then, six weeks after your TX date you should receive a phone call from your local bank, informing you that a large sum of money has arrived at the bank and it is destined for your current account. They are complying with money laundering regulations and just want to know that you are expecting the money. The next day it will be credited to your account. Of course once they know it’s expected, they will probably try to sell you some financial products or services.
Transition Protected Members
For those slightly older who didn’t move over on to AFPS15, the procedure is the same as above, but it might be a bit quicker. You may well find your money gets to the bank four weeks after your TX date. This is because they don’t have to feature in the extra complications from the new AFPS15 scheme.
With Preserved Benefits you don’t need to apply until the time your particular scheme/s are due to pay out. You may be about to leave or indeed you may have left many years ago. The solution is the same for all. Have you left or will you leave the armed forces since 1st April 1975? If the answer is yes then you may be due an Armed Forces pension. The rules changed on 6 April 1975 to provide for pensions to be deferred for payment at age 60 for all those discharged over the age of 26 with a minimum of 5 years service. On 31 March 1978 the age criterion was dropped and on 6 April 1988, the qualifying period was reduced from 5 to 2 years. Since then it’s just 2 years Reckonable Service on any of the schemes. Now, I’ve mentioned this ‘Reckonable Service’ a few times now, so what does it mean. Well, for Ratings in AFPS75 it means the service you did after your 18th birthday or date of entry if you were already 18 on joining. For Officers in AFPS75 it means from age 21 or date of Commission. For the AFPS05 or AFPS15 schemes it was simply from the date of entry, regardless of age or Rank.
The ages the various schemes pay out are:
AFPS75 age 60 for service prior to April 2006.
AFPS75 age 65 for service since April 2006.
AFPS05 age 65.
RFPS age 65.
AFPS15 State Pension Age.
So, if you think you might be due a Preserved Pension, the first thing to do is apply for a forecast. All you have to do is complete a Form 14. If you’re unable to download any of these forms, ring them on 0800 085 3600 and they will send you one. Once they have the completed form, they will get back to you with what you will hopefully be due. You can do this every year if you like, free of charge. If you are actually already due, or when you get to that point, then you need to claim the pension. You do that by downloading and completing a Form 8. If you’ve already gone past your due date, don’t panic, they can backdate it six years. Remember, when the pension is due, there will in addition be a tax free lump sum equal to three times the value of the annual pension for AFPS75, AFPS05 and RFPS. For AFPS15, it’s different in that you have the option to take a tax free lump sum from the pension but if you do, the value of the pension is reduced for rest of life. For this scheme the amount you take is £12 lump sum for every £1 pension you give up. They will tell you the maximum you can convert. To ensure timely payment of preserved benefits you should apply around ninety days before payment is due.
Of course, it being the MoD there will always be a few exceptions. Too intricate to detail here, so if you think you might be due, apply. Veterans UK will either give you the pension or explain why if you are not eligible.
If you’re leaving soon and not eligible for any immediate Pension, EDP or Compensation benefits but have done a significant amount of Reckonable Service, there’s that term again. You might be due a Resettlement Grant. The minimum reckonable time served is:
AFPS75 Other Ranks at least 12 years.
AFPS75 Officers at least 9 years.
AFPS05 All Ranks least 12 years.
AFPS15 All Ranks least 12 years.
If you’re now on AFPS15 but have any service on AFPS75 or 05 then the rules for the old scheme applies.
To apply for this grant you need to fill in the Form 1. Unfortunately you won’t see any mention of Resettlement Grant on the form. When AFPS15 came out, they streamlined this form and took out the section about Resettlement Grants but as yet haven’t come up with an alternative means to claim. So Veterans UK still require this form. Just fill it in as best as you can. Give us a call if unsure. As with payment of other immediate benefits the rules state thirty working days (six weeks) after TX date for the money to be paid to your bank account.
What if you’re re-joining the Regulars or going to an FTRS, ADC or MPGS job? Well, now it gets quite complicated, so watch for another blog specifically covering those scenarios. Give us a call if you need to.
If you’d like further assistance on pensions, feel free to contact us using any of the details at; http://www.whiteensign.co.uk/contact-us or complete our Application For Services Form and a member of staff will be in touch.