PART 4 Amendment of the Armed Forces Pension Regulations 2014

5 Amendment of the Armed Forces Pension Regulations 2014
1 The Armed Forces Pension Regulations 2014 are amended as follows.
S.I. 2014/2336; relevant amending instruments are S.I. 2015/466 and 2015/568.
2 In regulation 3 (interpretation), insert in the appropriate places in the alphabetical order the following definitions—

““flexible service” means one or both of the following types of service—
(a) part-time service;
(b) restricted separation service,
and references to a member serving on flexible terms must be construed accordingly;
“part-time service” means—
(a) for enlisted members, a period of service where the member is serving in accordance with an arrangement provided for in regulations made under section 329(2)(ha) of the Armed Forces Act 2006;
(b) for members who are officers, a period of service on equivalent terms of service;
“restricted separation service” means—
(a) for enlisted members, a period of service where the member is serving in accordance with an arrangement which does not restrict the member’s service in a particular area but does make it subject to other geographic restrictions provided for in regulations made under section 329(2)(i) of the Armed Forces Act 2006;
(b) for members who are officers, a period of service on equivalent terms of service;
“service reduction percentage” has the meaning given in regulation 23A;”

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3 After regulation 23 (pensionable earnings), insert—

“23A “Meaning of “service reduction percentage”
1 In these Regulations, the “service reduction percentage” in respect of a period of flexible service is given by the formula, expressed as a percentage—
(A−B)A
Where—
A is the basic pay which the member would have received in respect of that period of flexible service had the member not been serving on flexible terms;
B is the basic pay received by the member in respect of that period of flexible service.
2 For the purposes of these Regulations, a period of flexible service ends and another begins when any change in the service reduction percentage occurs.”

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4 In regulation 54 (annual rate of ill-health pension: active members with permanent serious ill-health), after paragraph (4), insert—

“5 For members who have served on flexible terms, when calculating the enhancement value, for the purposes of A and X—
(a) for all years up to the last active year, all scheme years or any parts of a scheme year (expressed as a proportion of a year) during any period of flexible service for which amounts of earned pension were specified in the members account, are reduced by the service reduction percentage applicable to that period of flexible service; and
(b) if the member was serving on flexible terms during the last active scheme year, the number of calendar days (expressed as a proportion of a year) during any period of flexible service when the member was eligible for active membership, are reduced by the service reduction percentage applicable to that period of flexible service.”

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5 In regulation 55 (annual rate of ill-health pension: active members with significant impairment of capacity for gainful employment), after paragraph (4), insert—

“5 For members who have served on flexible terms, when calculating the enhancement value, for the purposes of A and X—
(a) for all years up to the last active year, all scheme years or any parts of a scheme year (expressed as a proportion of a year) during any period of flexible service for which amounts of earned pension were specified in the members account, are reduced by the service reduction percentage applicable to that period of flexible service; and
(b) if the member was serving on flexible terms during the last active scheme year, the number of calendar days (expressed as a proportion of a year) during any period of flexible service when the member was eligible for active membership, are reduced by the service reduction percentage applicable to that period of flexible service.”

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6 In regulation 76 (meaning of “final pensionable earnings”), after paragraph (4), insert—

“5 Where a member served on flexible terms during any part of the period of 3 years mentioned in paragraph (1), the member’s final pensionable earnings are calculated as though the member had not served on flexible terms for that period.”

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7 In regulation 84 (nominations for lump sum death benefits), after paragraph (4), insert—

“4A Where the member marries or enters into a civil partnership on or after 1st December 2018, any existing nomination ceases to have effect from the date of the marriage or civil partnership.”

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8 In regulation 94 (periodical contributions: special cases)—
(a) after “a period of absence from work”, insert “, serves on flexible terms”; and
(b) in paragraph (c), after “the scheme year after the absence”, insert “or service on flexible terms”.
9 In regulation 121(1) (forfeiture of benefits), for “paragraph (2) of regulation 132 (information and evidence)”, substitute “paragraph (1) of regulation 122 (events enabling forfeiture)”.