I also confirm the tax free bit. I commuted the maximum a few months ago and it arrived smack on time thankyou very much!! (All accounted for of course!)
Also now in receipt of a nice pension too...That bit worked out nicely. However, it's all a bit confusing for the poor tax man, especially as I was on a double income for a while (you're allowed to on terminal leave and can do more with permission!). Your RAF pay / pension and new employment will be handled by different tax departments who refuse to talk to each other, so keep some aside for when they finally realise their error (despite much prompting!).