Having read the last few posts I am kind of staggered at the lack of knowledge of the various Armed Forces’ Pension Schemes (AFPSs). The guidance booklets aren’t that hard to understand and are even hosted on the open internet here:
https://www.gov.uk/guidance/pensions...n-for-veterans These booklets were refreshed in Jul 20 to make them clearer and the same format to allow easy comparison.
If you can’t be bothered to read them, then join the Forces’ Pension Society (FPS) who will basically read the books for you. They will also answer queries for you if you want someone to mark your homework. For £40/year, for many, that is a good investment too. Especially if you struggle with the simple guides in the first link.
https://forcespensionsociety.org
So let’s have a think about what happens if you retire after age 55:
1. AFPS75 - nothing, but you will likely get the same amount as if you retire at 55. For officers the maximum you can accrue is 34 years after age 21, and for airmen it is 37 years after age 18. However, few will now be on pure 75 now and many will be on 75/15.
2. AFPS75/15 - the same applies for the 75 above, but since Apr 15 you have been accruing AFPS15 as well at Career Average rate (since 2015 - which is important, as you will be getting a better rate). You can retire at 55 and you will get your full AFPS75 pension that you earned and whatever you earned since 2015 under AFPS15 as an Early Departure Payment (EDP). That EDP will be roughly 1/3rd of your final pension at State Pension Age (SPA). If you are FTRS, ADC, VeRR, etc... you will have to serve until age 60 as there is no EDP entitlement, but you can retire at 55 and take an actuarially reduced AFPS15 (the pension calculator can help you calculate this).
2. AFPS05 - nothing changes. You can retire at 55 and get the same benefits. Maximum benefits are earned after 40 years of service. Again, few will be on AFPS05 solely and most will be on AFPS05/15. Those that were on AFPS75 before but took the Offer To Transfer (OTT) in 2004/5 will only have entitlement to AFPS05 as their service in AFPS75 was fully transferred when they took the OTT. However, they preserved AFPS05 when they were transferred under AFPS15 to get AFPS05/15.
3. AFPS05/15 - It’s the same deal as AFPS75/15 apart from the fact that you have a portion of AFPS05 instead of AFPS75. But the rules for the AFPS15 portion are the same as above.
4. AFPS15 - for those that joined from 2015 onwards then the McCloud judgement does not apply. You are stuck with AFPS15. That sounds bad, but it isn’t. Whilst it is not as good as AFPS75 or AFPS05 in many areas, it is still probably the very best public sector pension scheme out there. Actually, of you stay the full career to age 60 then you should have a better pension than either AFPS75 and AFPS05. So AFPS15 really rewards for long service and the 2 reward for mid-career breaks better.
So, you can leave between age 55 and age 60 and still get benefits. To maximise those, you need to do those last 5 years, but you can leave at 55 as before.
Get your heads in the 30(ish) page booklets in the first link. They really are easy readers! But if you can’t manage that, or if you have complex affairs then join the FPS and pay what could be the best £40 ever.
Oh, and keep playing with the calculator for various scenarios to check your understanding...
https://www.mod-pc.co.uk