PA,
The one good thing about Hutton's review is that he has smashed the myth that the pension for most servicemen and woman is 'gold plated'. All that needs to happen now is to expose the rubbish that it is non contributory. I never paid much attention to 'the pension' and I wish I had done far earlier. Seeing in black and white was I really was contributing, and what was being contributed on my behalf, would have probably compelled me to investigate any shortcoming far earlier.
In response to your questions, my understanding is, if Individual A decided to see out his/her final 10 years, and if we see some form of change in 4 years, then there will be 6 years or so of service under the new scheme. Assuming its the case, there will be 6 years benefits that will be applied to whatever the new scheme dictates (ie; later taking of benefits). My instinct tells me that your first scenario is closer to the mark, with benefits being delivered in a more staggered manner. Thats not such '
so' bad; unless you need them (as many will) why have benefits delivered to you earlier, when you might be flying and taxed to buggery on it anyway? Why not wait until you stop earning and your annual allowance is higher (£8200 from next year)? If you haven't already done so, start planning now for what you want your retirement income stream to look like.. the planning process is an evolving one and you won't want to wait until the last minute because you'll have run out of time and options for (planning) change.
Your question about the bloke who waits one month too long (probably!) won't happen because he will have accrued all but one of his 432 months pensionable service under the old scheme rules. He will therefore be entitled to 431 months of benefits as he currently is, and 1 month under the new one. I imagine that there will be a few people banging out before the new scheme kicks in..? When planning retirement, fit AFPS around your life and not vice versa. If you're a woman serving, if you have a husband who is at home raising the kids and has a huge chunk of annual personal allowance that isn't being used, if you have savings currently with a bank savings account that you are being pinged for interest, fill out Form R85 and make sure the interest (ho ho) goes to him. Start getting the basics right first.
http://www.hmrc.gov.uk/forms/r85.pdf