the tax-free lump sum on retirement from the CAA may have been an extention of the military gratuity to long serving military members
NO!! The tax-fee lump sum is available to
ALL pension schemes. At present, you can take up to 25% of the actuarial value of your total pot as a tax free lump sum. Foe example, if you are a 60-year-old with a possible pension of £45K, you can take about £200K as a lump sum, leaving a pension of about £34K. You will pay no tax on the lump sum. The justification for making it taxable might be that you didn't pay any tax on the money when it went into the scheme.
Most public sector schemes oblige the members to take the lump sum. In the NATS scheme, it's optional.