Key Points
Service personnel who were in service on or before 31 Mar 12 and on or after 1 Apr 15 (including those with a break in service of less than 5 years) are in scope for the remedy.
As of 1 Apr 22, all serving personnel will only accrue pension benefits in AFPS 15. All legacy schemes will be closed.
The McCloud remedy calculator is due for release in late Autumn, exact date to be confirmed.
No action is required from any service personnel at this stage. You will only need to make a decision on which scheme you’d like to be a part of for the remedy period when you draw your pension benefits (EDP, IP etc.).
All policy legislation and process must be implemented by October 23.
Background
In 2015 the Government reformed public service pensions, moving most public sector workers to new pension schemes on 1 Apr 15. In the Armed Forces most of our people moved to AFPS 15, but those within 10 years of their Normal Retirement Age (55) were given ‘transitional protection’ from the reform and remained in their existing pension scheme. In Dec 18, the Court of Appeal found that the transitional protection offered to some members of the judges’ and firefighters’ schemes was discriminatory against younger members. The Government confirmed that the difference in treatment would need to be addressed across all public service schemes. This ruling affects any Service Person who was serving both on or before 31 Mar 12 and on or after 1 Apr 15 (including those with a break in service of less than 5 years).
In Feb 21 the Government announced how it would remove the discrimination identified by the courts. For the Armed Forces:
•A person who was, on 31 March 2012 or earlier, in service in any employment or office that was pensionable service and was compulsorily transferred to AFPS 15 on 1 Apr 15 will return to their previous pension scheme for their service between 1 Apr 15 –31 Mar 22 (this is known as the remedy). This will happen by Oct 23.
•Legacy pension schemes (AFPS 75, AFPS 05, RFPS 05, FTRS 97, NRPS) will become closed schemes and no further accrual may occur beyond 31 Mar 22.
•Everyone who continues in Service from 1 Apr 22 will do so as members of AFPS 15.
•Those affected will be able tochoose which pension scheme benefits, including Early Departure Payments (EDP), they wish to receive for their period of service between 1 Apr 15 –31 Mar 22. This choice is made at the point when pension benefits, or EDP, becomes payable.
Current Position
Delivering this remedy will take time as legislation must be passed, policies need to be developed and complex IT changes are required. This means that some people could leave the Service before the remedy is fully implemented in 2023. Anyone who leaves before this date will have the opportunity to have their pension benefits, including EDP, reassessed and, if necessary, monies will be backdated. No-one needs to make a choice about their pension yet and will only need to do at the point of retirement. An online calculator with remedy options will be rolled out by the end of 2021.
Additional Information
Regular updates on McCloud will be posted at:
www.gov.uk/guidance/pensions-and-compensation-for-veterans
The RAF Reward Sharepoint site is here (internal users only)