By Dave Scholey, Regional Manager South East & 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 most 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 leaving soon as well as those who will leave further into the future.
In most cases the question usually arises for somebody leaving shortly and expecting to be on immediate benefit terms. Either they are to receive 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. The findings of the Employment Tribunal (McCloud) muddies the waters somewhat and we need to await it’s full implementation to see the full effect on individuals benefits packages. The introduction of the interim AFPS calculator sometime before October 2023 will show full details of how it affects your entitlements and choices.
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. You can find out by checking the online guides at: AFPS Guides. Next you will need to apply for the pension/EDP. Two ways of doing this; apply using a downloaded hard copy PEN 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 best option is to apply online via your JPA account. Log on and select ‘Self Service Employee’ In there you’ll see ‘Pension Application Form1’ which comes up 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 PEN Form 1 sometime 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.
With Preserved Benefits you don’t need to apply until the time your scheme/s are due to pay out. You may be about to leave or indeed you may have left many years ago. I get many enquiries from people who left back in the 1970s. The solution is the same for all. Have you or will you leave the armed forces since 1st April 1975? If the answer is yes and you served at least two years reckonable service, then you will normally be due a pension at the appropriate age. I say normally because there is an extra rule for those who left between 1975 and 1978. For those few people you had to have served at least five years reckonable service and be at least 26 years of age on discharge. 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. 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 2005.
AFPS75 age 65 for service since April 2005.
AFPS05 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 AFPS Form 14 . If you’re unable to download any of these forms, ring them on 0808 1914218 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 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 and AFPS05. 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 immediate any pension/EDP/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 Reckonable Service.
AFPS05 All Ranks least 12 years’ service.
AFPS15 All Ranks least 12 years’ service.
If you have any service on AFPS75 or 05 then the rules for that scheme apply.
You also use the PEN Form 1 for claiming a Resettlement Grant if you aren’t already entitled to any other lump sum at the time of leaving. In this case when the form asks what pension schemes you are on, just select ‘I Am Not Due Any Immediate Benefits’ from the drop-down list.
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 give us a call or register via our portal at: Home · Community Portal (whiteensign.co.uk) and a member of staff will be in touch.