I did see the consultation out the other day and one bit struck me very clearly - this isn't a one way bet, tax bills loom for the unlucky few (probably including yours truly) with the consultation clearly noting that some will require an adjustment to their tax positions.
Yet this doesn't need to be the case. At the start of the year I was stung with a 5-figure tax bill for no reason other than I happened to be good at my job, and a couple of years ago I got lucky and was promoted. Yet when I did the calculations, it was clear that the pension input amounts are not linear i.e they are not in line with pension benefits as defined in the various documentation as being a function of salary, years served and accrual rates. Instead, whilst benefits acrue in a predictable manner, the underlying pension inputs are all over the place, some years decreasing from the previous year's value - something the FPS never did explain to me even though I asked..
The point I am getting to is that any compensation could well incur a signficant tax bill if thrown at the notional pension pot in one go. Yet it doesn't need to be. That the pension inputs vary so much each year begs the question why any compensation can't be fed in over time to smooth the input values thereby negating tax bills which would arise from single large inputs. That, I think, will be a service complaint if I get yet another tax bill simply because the MOD has delibertely exceeded the limits when it could smooth the input levels. Not sure who would be most likely to be at risk from this scenario, but I suspect those who have promoted during the period in question must surely be at risk.