The % abatement (4%) is quoted in recent reports, including the major pension review in the 2013 AFPRB report and the in the last (published) report.
d Armed Forces pay adjusted for X-Factor (/1.14) and for pensions (x1.04) [2013 Report]
15 As for our yearly ASHE comparisons, this also uses Armed Forces’ pay adjusted down to exclude X-Factor and up to reflect the comparative value of Armed Forces’ pensions. [2017 Report]
Since 2015 the MoD has come into line with normal pension fund management, including a regulated pension board. The whole contacted out/in and NI contributions also changed after engagement with HMT; as did the whole lifetime allowance fiasco which will continue to bite more and more. That said, the Treasury is not completely tone-deaf when it comes to service pensions, especially for those injured on active duty - as a concession HMT wavies all tax on service-attributal pensions.