MONEY
‘reckonable service’ for pensionable purposes. ‘Relevant service’ commences from the date of entry or re-entry, whichever is the later, whereas reckonable service for pension purposes can be an amalgamation of AFPS75 pension service and AFPS05 pension service.
Therefore, whilst aggregation of AFPS75 pensionable service into the AFPS05 pension scheme is allowed when making an award of terminal benefits under the rules of the AFPS05 pension scheme, such service in the AFPS75 pension scheme cannot count towards the ‘Relevant Service’ qualification because it will have all occurred before the individual re-entered into the Armed Forces. At this point it is worth emphasising that EDP awards are not a pension. Similarly, Resettlement Grants and Compensation Lump Sums are not a pension either, hence the term ‘pensionable service’ being irrelevant for qualification of these benefits.
It was interesting to note that when the government minister, Dr Andrew Murrison, was asked in the House of Commons by the Shadow Defence Secretary “…How many individuals had re-entered the Armed Forces since 5 Apr 05?...” he could only respond that there was no mechanism in place within
the MoD to record such a statistic and that to obtain those figure could only be done at disproportionate cost.
So what has happened since the misinterpretation was discovered? Since SPVA cannot continue knowingly to pay an award for which the qualification has not been met; payments have ceased. Not surprisingly, there is deep anger and bitterness among those affected and a number of very disappointed people have since left the Armed Forces with entitlements either very much lower than expected, or non-existent. Any financial plans that were made on the expectation of receipt of that money have effectively been blown out of the water.
There have been a number of cases where individuals were encouraged to use the Government’s online Redundancy Calculator (before it was changed to reflect the misinterpretation) to ascertain their financial position should they volunteer for redundancy. Several decided, based on the projection given by the Calculator, that they would volunteer, since it appeared to be a viable financial option. It was only after their applications were successful and they received a proper forecast of redundancy
benefits from SPVA that they realised the income streams and size of the various lump sums ‘promised’ were either not going to be paid at all, or drastically reduced from the figures on which they based their decision to leave. To the FPS’s knowledge, none of those claiming to have been caught out and who appealed to have their redundancy selection reversed on the basis of being misled by a false forecast has had their appeal upheld.
In an attempt to quantify the scale of the problem, the three Services have produced a memorandum asking those affected to make themselves known to their various Chains of Command. Once the numbers and costs involved have been identified, it is suspected that there will next be some sensitive negotiations with the Treasury to determine exactly how the matter can be satisfactorily resolved. The Forces Pension Society anticipates that the MoD will find a solution but in the meantime, it is monitoring the situation carefully.
If you would like to find out more about your Armed Forces pension you can do so by looking at the Society’s website
www.ForcesPensionSociety.org or by calling the dedicated help line on 020 7735 0110.
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Envoy Winter 2013
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