The Armed Forces Pension Scheme Order 2005

D.4.    Early payment of pensions with actuarial reduction

(1) A member who is not entitled to immediate payment of a pension under D.1, D.2 or D.3 apart from this rule may opt for immediate payment of a reduced pension and lump sum under rule D.2 or D.3 if the member has reached the relevant age and paragraph (2) or (3) applies.

In this paragraph “the relevant age” means—

(a) in the case of a pension credit member, 60, and

(b) otherwise, 55.

(2) This paragraph applies if the member—

(a) meets the condition in rule D.2(1)(a) or (b), and

(b) has ceased to be in service that qualifies him to belong to the Scheme.

(3) This paragraph applies if—

(a) the pension is derived from pension credit rights, and

(b) the pension sharing order from which the rights derive has taken effect.

(4) If a member exercises the option under this rule, the amount of the annual pension to which he becomes entitled is first calculated as mentioned in rule D.2(3) or, as the case may be, rule D.3(4) and then that amount is reduced by such amount as the Secretary of State determines after consulting the Scheme actuary.

This is subject to paragraph (5).

(5) If the member has a guaranteed minimum under section 14 of the Pension Schemes Act 1993 in relation to service by reference to which he is entitled to benefits under the Scheme, the weekly rate of the pension immediately payable in respect of that service (after taking into account any option exercised under rule D.10) must not be less than that guaranteed minimum, multiplied by such factor as is indicated in tables provided by the Scheme actuary for a person of the member’s age and sex at the date on which the pension becomes payable.

(6) If a member exercises the option under this rule, the amount of the lump sum to which he becomes entitled is first calculated as mentioned in rule D.2(4) or, as the case may be, rule D.3(5) and then that amount is reduced by such amount as the Secretary of State determines after consulting the Scheme actuary.

(7) The option under this rule may only be exercised by notice in writing to the Scheme administrator in such form as the Secretary of State requires.