Guidance for the Armed Forces Pension Scheme - 1975 and 2005 sections. Links are provided to enable you to access more detailed information on the scheme. The scheme regulations should always take precedence over third party guidance.
Which section of the Armed Forces Pension Scheme do I belong to?
There are two Armed Forces Pension Schemes, operating concurrently.
If you have service in the armed forces between 6 April 1975 and 5 April 2005 you will be contributing to the Armed Forces Pension Scheme 1975 (AFPS 1975), unless you chose to move to the Armed Forces Pension Scheme 2005 (AFPS 2005) during the ‘Offer to Transfer’. If you were serving in the armed forces between July 2005 and March 2006, and contributing to the AFPS 1975, you will have been provided with this option to transfer to the AFPS 2005.
If you joined the armed forces after 6 April 2005 you will be contributing to the Armed Forces Pension Scheme 2005 (AFPS 2005).
How much do I have to contribute to join the scheme?
The AFPS 1975 and 2005 are non-contributory. You do not have to make any contributions to join the scheme but forces pay is set taking into account the fact that contributions are not required to be made towards the pension scheme.
How does my pension accrue?
This depends on which AFPS you belong to.
In the AFPS 1975 your pension is calculated with reference to your rank and length of service.
In the AFPS 2005 your pension is calculated as 1/70th of final pensionable earnings for each year or service, up to a maximum of 40 years of reckonable service.
What is Qualifying Service?
Qualifying service includes your paid service plus certain other periods, for example service aggregated from the AFPS 1975, service transferred into the AFPS 2005 and service on secondment to NATO/UN. Qualifying service does not include added years.
What is Reckonable Service?
Reckonable service is the service which counts towards the calculation of your pension. For an Officer this starts at age 21, or date of entry if later, for a maximum of 34 years (AFPS 1975) or 40 years (AFPS 2005). Reckonable service includes service transferred from other pension schemes and added years.
How is my reckonable service calculated?
Reckonable service includes your qualifying service plus added years. This is the service used to calculate your pension.
How much service do I need to qualify for benefits?
You will need to have completed two years reckonable service to qualify for most benefits.
When can I retire?
An AFPS 1975 pension can be paid from age 55 after 34 years of reckonable service as an Officer. However, a pension can be paid immediately on leaving the armed forces after 16 years reckonable service as an Officer. This is known as the Immediate Pension (IP) point.
Only actual service in the armed forces counts towards the 16 years reckonable service required to qualify for IP. Transferred in service and added years are excluded for this purpose.
An AFPS 2005 pension can be paid from age 55. It is also possible to access benefits earlier via the payment of an Early Departure Payment (EDP) if you have at least 18 years of service and have reached age 40. Medical and Dental Officers are not normally eligible for the EDP.
What does the AFPS 1975 Immediate Payment (IP) provide?
Once you have completed at least 16 years service as an Officer you will be entitled to a pension and terminal grant on leaving service. The terminal grant is three times the pension.
What happens if I leave the AFPS 1975 after reaching the IP but before completing my commission?
If you leave the armed forces, at your own request, after reaching the IP but before completing your commission or before age 50 you will qualify for Premature Voluntary Retirement. These rates of pension are lower than the IP rates.
If I do not meet the requirements to receive an AFPS 1975 IP what are my options?
If you leave the AFPS 1975 before you reach the IP point, having completed at least two years of reckonable service you will be entitled to a preserved pension and terminal grant payable from age 60, for service before 6 April 2006, and age 65 for service after 6 April 2006. If you claim all the benefits at age 60 they will be actuarially reduced to reflect that they are being paid early.
What happens if I leave the AFPS 2005 earlier than age 55?
Providing you have completed at least two years of qualifying service you will be eligible for preserved benefits. This is a preserved pension and a preserved lump sum. These benefits are payable in full from age 65.
How is my AFPS 1975 pension calculated?
Your pension does not accrue at a uniform rate. In respect of service up to the IP, i.e. after 16 years service as an officer, you will receive a pension based on 28.5% of representative pay. If you continue to age 55, accruing maximum service of 34 years, you will have accrued a pension of 48.5% of representative pay.
How is my AFPS 2005 pension calculated?
Your pension is calculated with reference to your length of service and your pensionable earnings.
How are my AFPS 2005 pensionable earnings calculated?
This is the greatest amount of pensionable earnings you received for 365 consecutive days over the last three years of reckonable service.
Will I receive a lump sum?
The lump sum is known as a Terminal Grant and is calculated as three times the pension. The terminal grant is free of income tax.
Can I take a bigger lump sum ?
Yes, more information on Resettlement Commutation and Life Commutation for AFPS members is available in the guidance for AFPS 75 Commutation
Guidance for AFPS 75 Commutation
Can I take a smaller lump sum and bigger pension?
This is only possible for AFPS 2005 members and is known as ‘Inverse commutation’. You can give up some or all of your lump sum to provide additional pension benefits for yourself, or for yourself and your dependents.
If I am over age 55 what are the inverse commutation AFPS 2005 factors?
The factors are available in table 17 of Annex D of Chapter 4 of the pension scheme regulations.
Pension scheme regulations
If I am under age 55 what are the inverse commutation AFPS 2005 factors?
The factor will be calculated by the Government Actuary on an individual basis.
What happens if I am forced to retire on account of injury or illness (which is not my fault)?
Providing you have completed more than two years reckonable service in the AFPS 1975 you will receive an invaliding pension and terminal grant. Different arrangements apply depending on whether the injury or illness is attributable to your service.
Providing you have completed more than two years reckonable service in the AFPS 2005 the scheme provides for 3 tiers of ill health retirement.
What will I receive if my injury or illness is attributable to my service?
Attributable benefits are not paid under either the AFPS 1975 or the AFPS 2005.
If the injury or illness was caused by service before 6 April 2005 then attributable benefits are paid under the War Pension Scheme (WPS) or the Armed Forces Attributable Benefits (AFAB) Scheme.
If the injury or illness was caused by service on or after 6 April 2006 benefits may be paid under the Armed Forces Compensation Scheme (AFCS).
Where can I find out further information benefits payable as a result of an illness/injury attributable to my service?
More information on the benefits payable as a result of an attributable illness/injury can be found in the armed forces compensation guide.
Armed forces compensation guide
Who administers the AFPS 1975 and 2005?
The Service Personnel and Veterans Agency (SPVA) administer the scheme. You will need to contact them to initiate the payment of your benefits. Their contact details are:
Service Personnel and Veterans Agency
Mail Point 480
65 Brown Street
Tel: 0800 085 3600
Has the SVPA produced guidance in relation to the Annual Allowance and Lifetime Allowance?
Yes, this guidance can be found in the AFPS members guide to taxation of pension benefits.
AFPS members guide to taxation of pension benefits
What is the BMA doing on taxation of the AFPS?
The effect of the taxation of pensions on the NHS has suddenly become an issue in the press and in Parliament over the last couple of months. The Health Secretary recently told the BBC that he accepted the BMA analysis of the issue. The Chancellor told the Treasury Select Committee that greater flexibility is needed in public sector pension schemes to allow people to avoid the AA and LTA charges (as can be done in the private sector).
However, it was clear that these flexibilities will be introduced to the NHS scheme before others. The Chief of Defence People spoke at the 2019 AFC conference and indicated that greater flexibility in the AFPS will take quite some time to achieve. This is a dangerous situation in which there will be a strong incentive for people to leave the DMS if they are getting large tax bills that their civilian colleagues can avoid. The BMA is therefore working hard to ensure that pension flexibility is introduced for everyone in the public sector in a timely way, including both the Armed Forces and Civil Service Schemes.
What are the bonus arrangements which apply to doctors and dentists in the armed forces?
Information on these payments is available in chapter 7 of the supplementary information of the pension scheme regulations.
Pension scheme regulations
What changes are taking place in April 2015?
In line with most other public sector pension scheme the AFPS has been subject to a review. The outcome of the review is that a new AFPS will be introduced on 1 April 2015. More information on these changes can be found in the Armed Forces pension scheme 2015 FAQs.
Armed Forces pension scheme 2015 FAQs
I am a member of the reserve forces. Will I be a member of the AFPS (1975 or 2005)?
No. You will be contributing to the Reserve Forces Pension Scheme.
More information on the Reserve Forces Pension Scheme.
Where can I get further information on the AFPS/RFPS?
Further information on the AFPS 1975, the AFPS 2005, and the proposed changes to be introduced in April 2015 can be obtained from the government's pension for veterans website.
Pension for veterans
Can the BMA Pensions Department help me with my queries?
Yes. Please contact us on 0207 383 6138 or at [email protected].