JTO,
It's all to do with the way that your Final Salary is calculated under AFPS05. When 05 was being formulated, the FPS lobbied that it should be "dynamic" over the last 2 years. As I understand it, this principle was adopted by the MOD/government and written into AFPS05; but AFPS75 remained unchanged.
As far as I can make out, when you retire as a member of AFPS05 your pension is worked out as follows:
1. Your best consecutive 365 days of salary over the last 3 years is established.
2. That figure is then rolled back 2 years to remove military pay rises received during that period.
3. Finally, the result is increased by the famous CPI figure that all pensioners received during the last 2 years.
So anyone on AFPS05 retiring over the next couple of years will be better off than they expected.
The downside is that, if the Armed Forces were to receive an above-inflation pay rise after the pay freeze gets lifted (you can always dream - but it happened in the late 70s), then AFPS05 members retiring soon afterwards wouldn't see it reflected in their pensions.
