The most likely upshot of this is that lawyers for families will point this out in court, stating that the MoD will reduce or remove the pension in each case (regardless of the fact that the MoD will probably have come to no decision by that point, if usual decision timelines are anything to go by) and so the courts will up any compensation payments to compensate for that loss too, thereby providing the pension effectively 'up font'. Then the MoD will figure that to continue paying the pension will be to pay twice from the public purse (on top of the compensation) and so will be forced to stop the pension payments, thereby proving the lawyers right.
In thought of cazatou's comment, is the pension an 'entitlement'? For example, even on the standard pension, it is only indexed linked as long as you reside in in UK or a non-commonwealth country. Live in Canada or any other commonwealth country and the 'entitlement' disappears. The lawyers could probably argue long and hard over this one and only they would get rich out of it. Frankly, getting the pension up front could be a more favourable option. Are compensation payments tax free? The pension isn't.