The Armed Forces (Transitional Provisions) Pensions Regulations 2015

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make transitional provision for members of existing armed forces final salary pension and employee retirement benefit schemes in the light of new, career average pension and retirement benefit schemes made under section 1 of the Public Service Pensions Act 2013 (c.25) (“the 2013 Act”) . These schemes are established by the Armed Forces Pension Regulations 2014 (S.I 2014/2336) and the Armed Forces Early Departure Payments Scheme Regulations 2014 (S.I 2014/2328) both of which come into force on 1st April 2015.

Part 2 of the Regulations makes transitional provision for members of the Armed Forces Pension Scheme 1975 (“the AFPS 1975”). The rules of the AFPS 1975 are set out in three prerogative instruments, one for each of the three services. This Part amends the abatement provisions of the AFPS 1975 so that where a pensioner member of the AFPS 1975 who is re-engaged in service that entitles them to membership of the Armed Forces Pension Scheme 2015 (the “AFPS 2015”), the scheme established under the Armed Forces Pensions Regulations 2014, the AFPS 1975 abatement rules apply. Where that person is also a pensioner member of the AFPS 2015, the AFPS 2015 pension is taken into account when abating the AFPS 1975 pension under the AFPS 1975 rules. This Part also inserts a new Schedule 3 into each of the three prerogative instruments that sets out the rules of the AFPS 1975, which protects the rights that have been accrued in that scheme by people who were members before 1st April 2015. Schedule 3 works by defining two groups of people (“full protection members” and “transition members”) from among the population of AFPS 1975 members who have service after 31st March 2015, and then conferring protection on each of them. Full protection members are exempted from the rules in the 2013 Act that prevent accrual in public sector final salary pension schemes after 31st March 2015. Transition members are not so exempted, but they are allowed an AFPS 1975 pension in respect of their service as a member of that scheme. In some cases (where the member has “continuity of service”) the final salary at the time of leaving service as a member of the AFPS 2015 is linked to the AFPS 1975 service. Special provision is made for ill-health and survivor benefits in respect of transition members with continuity of service.

Part 3 of the Regulations makes transitional provision for members of the Armed Forces Pension Scheme 2005. This Part amends the abatement provisions of the Scheme in a similar way to which Part 2 amends the AFPS 1975. This Part also inserts a new Schedule into the Scheme protecting accrued rights for full protection and transition members.

Part 4 of the Regulations makes transitional provision for members of the Armed Forces Early Departure Payments Scheme 2005. This Part establishes the meaning of a person with dual entitlement within the Scheme, and makes amendments to provide for the payment of early departure payments, resettlement grants and lump sums for incapacity for armed service to a person with dual entitlement.

Part 5 of the Regulations makes transitional provision for members of the Reserve Forces (Full- Time Reserve Service) Pension Scheme 1997. This Part amends the abatement provisions and inserts a new Schedule 2 into the Scheme protecting accrued rights for full protection and transition members.

Part 6 of the Regulations makes transitional provision for members of the Reserve Forces Non Regular Permanent Staff Pension Scheme. This part inserts a new Schedule 3 protecting accrued rights in that Scheme for full protection and transition members.

Part 7 of the Regulations makes transitional provision for members of the Reserve Forces Armed Forces Pension Scheme 2005. This Part amends the abatement provisions and inserts a new Schedule 2 protecting accrued rights for full protection and transition members.

Part 8 of the Regulations makes transitional provision for the Armed Forces (Redundancy, Resettlement and Gratuity Earnings Schemes) (No.2) Order 2010. This Part defines transition member and sets out the formula to be applied in respect of transition members when calculating the maximum amount of commutable pension. Additionally this Part makes amendments to the entitlement for resettlement grants.

Part 9 of the Regulations inserts a definition of “AFPS 2015” into the Armed Forces Pension Regulations 2014 and a definition of “EDP 2015” into the Armed Forces Early Departure Payments Scheme Regulations 2014, as these terms appear in several textual amendments made to these instruments by these Regulations.