South Bound, HPT
The reduced commutation level for service after 1 Apr 06 is already in force, as it was believed to be a requirement enforced by the Finance Act 2004, which took effect in 2006. However, that interpretation has benn called into question, and MoD is now consulting urgently with HM Treasury and HMRC to clarify the requirements of the Act and whether they were intended to apply to commutation rights within the AFPS. That is the subject of the latest bulletin. Unhelpfully, it says that, pending a decision, commutation will continue under the "old rules", which I take to mean those that have been applied since 2006, rather than prior to the Finance Act coming into force - I could be wrong, as the intended meaning isn't abudantly clear. If I am right, then the best scenario is that full 50% commutation might be restored, while the worst that should happen is that the current restriction to 25% for service after Apr 06 will continue. An important point to note, regardless, is that currently you must apply to commute before leaving service in order to achieve the maximum amount. You can delay your application until after you have left, but, under the current interpretation at least, you cannot then commute any of your pension due for service after Apr 06.
Regards
Ginseng