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The Armed Forces Pension Scheme Order 2005

Type Statutory-Instrument

Publication 2005-03-08

Last updated 2025-03-19

State In force

Department King's Printer of Acts of Parliament

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the annual amount of each pension is equal to—

$$100-SA100×DPN$ where— SA is the amount of the pension payable under rule E.1 or E.2 (disregarding rules D.10, E.6 and E.7), expressed as a percentage of the member’s deferred pension, DP is the member’s deferred pension, and N is the number of pensions payable under rule E.8(1).$

(5) If—

(a) no pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

(b) one, two or three pensions are payable at that time under rule E.8(1),

the annual amount of each pension is equal to one third of the member’s deferred pension.

(6) If—

(a) no pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

(b) four or more pensions are payable at that time under rule E.8(1),

the annual amount of each pension is equal to the member’s deferred pension, divided by the number of pensions payable under rule E.8(1).

(7) If—

(a) a pension is payable under rule E.8(1) in respect of a child,

(b) the annual amount of the pension is calculated under this rule on the basis that a pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

the annual amount of the pension payable under rule E.8(1) in respect of the child for any period after the date on which the pension under rule E.1 or E.2 ceases to be payable is calculated in accordance with paragraph (5) or (6) as if no pension had been payable under rule E.1 or E.2 immediately after the date of the member’s death.

Amount of children’s pension under rule E.8: pensioner members

E.12

(1) This rule applies for determining in the case of a deceased pensioner member the annual amount of a pension payable under rule E.8(1) (surviving children’s pensions).

(2) The amount of such a pension is determined by reference to the annual pension to which the member was entitled on the date of death (“the member’s pension”), except that—

(a) in a case where the member’s pension was increased under rule D.10 (option to exchange lump sum for pension), the member’s pension is taken for this purpose to exclude so much of the pension as is attributable to that increase, and

(b) where that option was exercised so as to increase the pension under rule E.8(1), this rule is without prejudice to that increase.

(3) If—

(a) a pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

(b) one pension is payable at that time under rule E.8(1),

the annual amount of that pension is equal to one quarter of the member’s pension.

(4) If—

(a) a pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

(b) two or more pensions are payable at that time under rule E.8(1),

the annual amount of each pension is equal to—

$$100-SA100×PN$ where— SA is the amount of the pension payable under rule E.1 or E.2 (disregarding rules D.10, E.6 and E.7), expressed as a percentage of the member’s pension, P is the member’s pension, and N is the number of pensions payable under rule E.8(1).$

(5) If—

(a) no pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

(b) one, two or three pensions are payable at that time under rule E.8(1),

the annual amount of each pension is equal to the one third of the member’s pension.

(6) If—

(a) no pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

(b) four or more pensions are payable at that time under rule E.8(1),

the annual amount of each pension is equal to the member’s pension, divided by the number of pensions payable under rule E.8(1).

(7) If—

(a) a pension is payable under rule E.8(1) in respect of a child,

(b) the annual amount of the pension is calculated under this rule on the basis that a pension is payable under rule E.1 or E.2 immediately after the date of the member’s death, and

Children born after the member’s death

E.13

(1) For the purposes of rule E.8(1), a member is only treated as leaving a child who is born after the member’s death if the child is born before the first anniversary of the member’s death.

(2) No pension is payable under that rule in respect of any period before the child’s birth.

(3) But a pension in respect of a child born after the member’s death is treated as payable in respect of that period in determining the number of pensions payable immediately after the date of the member’s death for the purposes of rules E.10(3), (4), (5) and (6), E.11(3), (4), (5) and (6) and E.12(3), (4), (5) and (6) (amount of children’s pensions).

Children entitled to three or more pensions

E.14

(1) This rule applies if, apart from this rule, pensions would be payable in respect of the same child under rule E.8 as a result of the death of more than two members.

(2) Only the pensions payable as a result of the death of two of the members and which together result in the payment of the greatest annual amount in respect of the child are payable.

(3) Rule E.27(3) (under which benefits are payable in respect of dual capacity members under this Part as if two or more members of the kinds in question had died and the amounts payable are determined accordingly) does not apply for the purpose of determining for this rule the number of members as a result of whose deaths pensions are payable.

(4) But the amount of the pensions payable as the result of the death of any member to whom that rule applies are calculated in accordance with rule E.27 before applying paragraph (2).

Lump Sum Death Benefits

Death of a member: lump sum benefit

E.15

(1) If a member dies before reaching the age of 75, the Secretary of State may pay a lump sum to any of the following—

(a) the person or persons nominated by the member in accordance with rule E.21,

(b) any person who is entitled to a pension under rule E.1 or to whom a pension may be awarded under rule E.2, or

(2) If two or more persons have been so nominated and the Secretary of State decides to pay the lump sum to them—

(a) the payment is to be made to them in such proportions as the member has specified in the nomination, or

(b) if no proportions are so specified, in such proportions as the Secretary of State considers appropriate.

(3) This rule does not apply if—

(a) the member is—

(i) a pensioner member, or

(ii) a pension credit member who dies after any benefits attributable to his pension credit have become payable, and

(b) the death takes place—

(i) more than five years after the member’s pension becomes payable, or

(ii) after the member’s pension has been commuted under rule J.8 (commutation of small pensions).

(4) Any lump sum that is paid under this rule must be paid before the end of the period of two years beginning with the day on which the member died.

Amount of lump sum benefit under rule E.15: active members

E.16

(1) In the case of an active member, the amount of the lump sum payable under rule E.15 (death of a member: lump sum benefit) is equal to the member’s final pensionable earnings, multiplied by four.

Amount of lump sum benefit under rule E.15: deferred members

E.17

(1) In the case of a deceased deferred member, the amount of the lump sum payable under rule E.15 (death of a member: lump sum benefit) is equal to the amount of the lump sum to which the member would have become entitled under rule D.2 if the member had become entitled to a lump sum under that rule on the date of death.

Amount of lump sum benefit under rule E.15: pensioner members

E.18

(1) In the case of a deceased pensioner member, the amount of the lump sum payable under rule E.15 (death of a member: lump sum benefit) is equal to—

$$A-B$ where— A is the amount of the pension that would have been payable to the member during so much of the period of five years beginning with the date on which the pension became payable as falls after the date of death, and B is the amount of any lump sum paid to the member under rule D.1, D.2, D.4, D.5, D.6 or D.7.$

(2) Any increases in the pension which might have become payable after the date of death are disregarded for the purposes of paragraph (1).

(3) If the member was both a pensioner member and an active member, the amount payable under rule E.16 is payable instead of the amount under paragraph (1).

Amount of lump sum benefit under rule E.15: pension credit members

E.19

(1) In the case of a pension credit member who dies before any benefits derived from his pension credit have become payable, the amount of the lump sum payable under rule E.15 (death of a member: lump sum benefit) is calculated by multiplying by 3 the amount of the annual pension that would have been payable to him under rule D.3 if that pension had become payable to him on the date of his death.

(2) In the case of a pension credit member who dies after the pension under rule D.3 becomes payable, the amount of the lump sum payable under rule E.15 (death of a member: lump sum benefit) is equal to—

$$A-Bwhere—$ where— A is the amount of the pension that would have been payable to the member during so much of the period of five years beginning with the date on which the pension became payable as falls after the date of death, and B is the amount of any lump sum paid to the member under rule D.3 or D.4.$

(3) Any increases in the pension which might have become payable after the date of death are disregarded for the purposes of paragraph (2).

Members affected by court orders to former spouses and civil partners on death

E.20

(1) This rule applies where on a member’s death the Secretary of State is required under a court order to pay any part of any amount payable under rule E.15 to the member’s former spouse or civil partner.

(2) Where this rule applies the amount payable under that rule is determined as if no such order had been made, and then this Part applies as if the amount payable under rule E.15 were reduced by the amount payable under the court order.

Nominations for lump sum death benefits

E.21

(1) For the purposes of rule E.15 (death of a member: lump sum benefits)—

(a) a member may nominate one or more persons, and

(b) if he nominates two or more persons, he may specify in the nomination the proportions of the payment he wishes each of them to receive.

(2) The member must make his nomination by notice in writing to the Scheme administrator in such form as the Secretary of State may require or is willing to accept.

(3) A member may revoke or alter a nomination by a further notice in writing to the Scheme administrator in such form as the Secretary of State may require or is willing to accept.

(4) The nomination of a person is invalid—

(a) if—

(i) the person nominated is an individual who was the spouse or civil partner of the member at the date the nomination was made and is not the spouse or civil partner of the member immediately before the member’s death, and

(ii) the member did not confirm the nomination by notice in writing to the Scheme administrator after the marriage or civil partnership ended, or

(b) if the person nominated is an individual who predeceases the member.

(5) If a person nominated is convicted of the offence of murder or manslaughter of the member, the person’s nomination is to be treated as invalid from the member’s death.

(6) If a person nominated is convicted of any other offence of which the unlawful killing or wounding of the member is an element, the Secretary of State may determine that the nomination is to be treated as invalid from the member’s death.

General Provisions

Pension debit members

E.22

(1) This rule applies where the deceased member was a pension debit member.

(2) If the member was an active member—

(a) the pension payable under rule E.1 (surviving spouses' and civil partners' pensions) or rule E.2 (other adult dependants' pensions) is calculated as mentioned in paragraph (3),

(b) the amount payable under rule E.8(1) by virtue of rule E.10 (surviving children’s pensions)—

(i) is first calculated as if the member were not a pension debit member (in particular, in determining the amount of the member’s assumed pension or annual pension for the purposes of rule E.10(2)), and

(ii) is then subject to any reduction required under section 31 of the Welfare Reform and Pensions Act 1999 (“section 31”), and

(3) The pension is first calculated under rule E.3 as if the member were not a pension debit member, and then it is reduced in the same proportion as the member’s assumed pension would have been reduced under that section if he had been entitled to it on the date of death.

(4) If the member was a deferred member—

(a) the amount of the pension payable under rule E.1 or E.2 is calculated by reference to the amount of the pension to which the member would have been entitled after any reduction under section 31, and

(b) the amount payable under rule E.8(1) by virtue of rule E.11—

(i) is first calculated as if the member were not a pension debit member (in particular, in determining the amount of the annual pension referred to in rule E.11(2)), and

(ii) is then subject to any reduction required under section 31.

(5) If the member was a pensioner member—

(a) the amount of the pension payable under rule E.1 or E.2 is calculated by reference to the amount of the pension to which the member was entitled (after the reduction under section 31), and

(b) the amount payable under rule E.8(1) by virtue of rule E.12—

(i) is first calculated as if the member were not a pension debit member (in particular, in determining the amount of the annual pension referred to in rule E.12(2) to which the member was entitled), and

(ii) is then subject to any reduction required under section 31.

(6) The effect of any option under rule D.10 (option to exchange lump sum for pension) to increase any pension is to be disregarded in determining the amount payable under paragraph (5) in the first instance; then the option is to be taken into account so far as it increases the amount of the pension so payable.

Dependants' pensions: suspension and recovery

E.23

(1) This rule applies where—

(a) on a member’s death a pension has been awarded and paid under this Part, and

(b) subsequently it appears to the Secretary of State that the member or the person to whom the pension has been paid made a false declaration or deliberately suppressed a material fact in connection with the award.

(2) The Secretary of State may—

(a) cease paying the pension, and

(b) recover any payment made under the award.

(3) Paragraph (2) does not affect the Secretary of State’s right to recover a payment or overpayment in any case where he considers it appropriate to do so.

Recovery of lump sum payments made to nominee

E.24

(1) Where—

(a) payment is made to a person under rule E.15 (death of a member: lump sum benefit) because of the person’s nomination by a member, and

(b) the person’s nomination is subsequently found to be invalid under rule E.21(4) or (5),

the Secretary of State may recover the payment.

(2) Paragraph (1) does not affect the Secretary of State’s right to recover a payment or overpayment in any case where he considers it appropriate to do so.

Provisional awards of children’s pensions: later adjustments

E.25

(1) This rule applies where after the death of an active member, a deferred member or a pensioner member—

(a) a pension is paid in respect of one or more persons under this Part on the basis that they were eligible children at the date of the member’s death and that there were then no other eligible children, and

(b) subsequently it appears—

(i) that a person in respect of whom such a pension has been paid was not then an eligible child, or

(ii) that a further person was then an eligible child, or

(iii) that a child who was born after the member’s death is an eligible child.

(2) The Secretary of State may make such adjustments in the amount of the pensions payable in respect of the children in question as are required in view of the facts as they subsequently appear.

(3) Paragraph (2) does not affect the Secretary of State’s right to recover a payment or overpayment in any case where he considers it appropriate to do so.

Payments under this Part

E.26

(1) A pension under this Part is payable from the day after the date of the death of the member.

(2) Payment of a lump sum payable under this Part must be made before the expiry of the period of two years beginning with that date.

(3) A pension payable under this Part in respect of an eligible child aged under 18 must be paid—

(a) if the child is in the care of the member’s surviving spouse or civil partner or a person who is the member’s surviving adult dependant for the purposes of rule E.2, to the surviving spouse or civil partner or the adult dependant, and

(b) in any other case, to the child’s guardian,

unless the Secretary of State directs otherwise.

Dual capacity membership

E.27

(1) This rule applies where the deceased member was—

(a) a member of the Scheme of two or more of the kinds specified in paragraph (2), or

(b) a member of the Scheme and a member of the AFPS 1975.

(2) They are—

(a) an active member,

(b) a deferred member,

(d) a pension credit member.

(3) Where paragraph (1)(a) applies, the general rule is that—

(a) benefits are payable in respect of the member under this Part as if two or more members of the kinds in question had died (so that two or more pensions or lump sums are payable in respect of the one deceased member), and

(b) the amounts payable are determined accordingly.

(4) But that general rule is subject to—

(a) rule E.3(4) and E.4(4) (adult dependants' pension where the member was both an active member and a deferred member),

(b) rule E.14(3) and (4) (children entitled to three or more pensions),

(d) rule E.16(3) and E.18(3) (amount of lump sum where the member was both an active member and a pensioner member).

(5) Where paragraph (1)(b) applies, the general rule is that benefits are payable in respect of the member under this Part regardless of the member’s membership of the AFPS 1975.

(6) But that general rule is subject to rules E.16(4) and (5) and E.17(3) (amount of lump sum where member was both a member of the Scheme and a member of the AFPS 1975).

Guaranteed minimum pensions for surviving spouses

E.28

(1) This rule applies where the surviving spouse of a deceased active, deferred or pensioner member has a guaranteed minimum under section 17 of the Pension Schemes Act 1993 in relation to benefits in respect of the deceased member under the Scheme.

(2) If apart from this rule—

(a) no pension would be payable to the surviving spouse under this Part, or

(b) the weekly rate of the pension payable would be less than the guaranteed minimum,

a pension the weekly rate of which is equal to the guaranteed minimum is payable to the surviving spouse for life.

(3) Paragraph (2) does not apply if the pension is forfeited in a case where rule J.6(1)(a) (conviction of treason or Official Secrets Acts offences) applies.

PART F — TRANSFERS

Transfers Out

Right to transfer value payment

F.1

(1) This Part supplements the rights conferred under Chapter 4 of Part 4 of the Pension Schemes Act 1993 (transfer values).

(2) This Part is without prejudice to that Chapter or Chapter 5 of that Part[^f00035] (early leavers: cash transfer sums and contribution refunds).

(3) Accordingly—

(a) a member to whom Chapter 4 of that Part applies (see section 93(1)(a) of that Act) is entitled to require the payment of a transfer value in respect of the rights to benefit that have accrued to or in respect of him under the Scheme, and

(b) a member to whom Chapter 5 of that Part applies (see section 101AA(1) of that Act) is entitled to a cash transfer sum or a contribution refund in accordance with that Chapter.

(4) Subject to the provisions of this Part, any other former active member, other than a pensioner member, is entitled to require such a payment as if rights under Chapter 4 of Part 4 of the Pension Schemes Act 1993 had accrued to or in respect of him by reference to the reckonable service he is entitled to count under the Scheme (and references in this Part to his accrued rights or benefits are to be read accordingly).

(5) Paragraph (4) does not apply if the former member is entitled under rule C.7 to repayment of the contributions he has paid during the period of service ending with his ceasing to be an active member or acquires a right to a contribution refund under Chapter 5 of Part 4 of the Pension Schemes Act 1993.

(6) Paragraphs (3) and (4) do not apply to rights that are directly attributable to a pension credit.

Applications for statements of entitlement

F.2

(1) A member who requires a transfer value payment to be made must apply in writing to the Scheme administrator for a statement of the amount of the cash equivalent of the member’s accrued benefits under the Scheme at the guarantee date (“a statement of entitlement”).

(2) In these Rules, “the guarantee date” means any date that—

(a) falls within the required period,

(b) is chosen by the Scheme administrator,

(d) is within the period of 10 days ending with the date on which the member is provided with the statement of entitlement.

Applications for transfer value payments

F.3

(1) A member who has applied for and received a statement of entitlement under rule F.2 may apply in writing to the Scheme administrator for a transfer value payment to be made.

(2) On making such an application a member becomes entitled to a payment of an amount equal, or amounts equal in aggregate, to the amount specified in the statement of entitlement (or such other amount as may be payable by virtue of paragraph (10)).

Ways in which transfer value payments may be applied

F.4

(1) A member may only require the Secretary of State to apply the guaranteed cash equivalent transfer value payment in one or more of the ways permitted under section 95 of the Pension Schemes Act 1993 (whether or not he is entitled to a guaranteed cash equivalent transfer value payment under that Act).

(2) The whole of the guaranteed cash equivalent transfer value payment must be applied, unless paragraph (3) applies.

(3) The benefits attributable to—

(a) the member’s accrued rights to a guaranteed minimum pension, or

(b) the member’s accrued rights attributable to service in contracted-out employment on or after 6th April 1997,

may be excluded from the guaranteed cash equivalent transfer value payment if section 96(2) of the Pension Schemes Act 1993 applies (trustees or managers of certain receiving schemes or arrangements able and willing to accept a transfer payment only in respect of the member’s other rights).

Calculating amounts of transfer value payments

F.5

(1) The amount of the guaranteed cash equivalent transfer value payment is to be calculated in accordance with guidance and tables provided by the Scheme actuary to the Secretary of State for use at the guarantee date.

Effect of transfers-out

F.6

Where a transfer value payment is made under this Part in respect of a person’s rights under the Scheme, those rights are extinguished.

Transfers In

Right to apply for acceptance of transfer value payment from another scheme

F.7

(1) Subject to the provisions of this Part, an active member may apply for a transfer value payment in respect of some or all of the rights that have accrued to or in respect of him under any of the following kinds of scheme or arrangement to be accepted by the Scheme.

(2) They are—

(a) another occupational pension scheme,

(b) a personal pension scheme,

(d) the Armed Forces Additional Voluntary Contributions Scheme.

(3) Paragraph (1) does not apply to rights that are directly attributable to a pension credit.

(4) Paragraph (1) only applies in the case of a transfer from the Armed Forces Additional Voluntary Contributions Scheme if the Secretary of State considers that the amount to which the member is entitled under that Scheme is insufficient for the purchase of an annuity for the member.

(5) Paragraph (1) does not apply if the member is on unpaid leave that does not count as reckonable service.

Procedure for applications under rule F.7

F.8

(1) An application under rule F.7—

(a) must be made in writing,

(b) must specify the scheme or arrangement from which the transfer value payment is to be made and the anticipated amount of the payment, and

(c) must be made before the beginning of the period of one year ending with the date on which the member reaches pension benefit age.

Acceptance of transfer value payments

F.9

(1) Where an application is duly made by a member under rule F.7, the Scheme administrator may accept the transfer value payment if such conditions as the Secretary of State may require are met, unless paragraph (4) applies.

(2) If the Scheme administrator accepts the payment, the member is entitled to count the appropriate period of reckonable service for the purposes of the Scheme.

(3) In paragraph (2) “the appropriate period” means the period calculated in accordance with rule F.10.

(4) The Scheme administrator may not accept a transfer value payment if—

(a) it would be applied in whole or in part in respect of the member’s or the member’s spouse’s entitlement to a guaranteed minimum pension, and

(b) it is less than the amount required for that purpose, as calculated in accordance with guidance and tables prepared by the Scheme actuary for the purposes of this paragraph.

(5) Paragraph (4) does not apply if the payment is made under the public sector transfer arrangements.

Calculation of transferred-in reckonable service

F.10

(1) The period of reckonable service that a member is entitled to count under rule F.9(2) is calculated as at the date on which the transfer payment is received by the Scheme and in accordance with guidance and tables provided by the Scheme actuary for the purpose.

Miscellaneous Provisions

Public sector transfer arrangements

F.11

This Part applies in the case of a transfer to which the public sector transfer arrangements apply as it applies in other cases, except to the extent that—

(a) any provision in this Part provides otherwise, or

(b) the arrangements themselves make different provision.

PART G — RE-EMPLOYMENT

Preliminary

Application of Part G

G.1

(1) This Part applies to persons who—

(a) have been active members of the AFPS 1975 or the Scheme,

(b) have ceased to be in service by virtue of which they are eligible to belong to the Scheme, and

(2) But paragraph (1) does not apply where rule A.10(1) (disregard of short breaks in service) applies.

(3) In these Rules an active member of the Scheme to whom this Part applies is referred to as a “a re-employed active member”.

(4) In this Part, in relation to any re-employed active member—

(a) the service referred to in paragraph (1)(b) is referred to as “the earlier service”, and

(b) the service referred to in paragraph (1)(c) is referred to as “the current service”.

(5) Certain rules in this Part also apply to members who opted to cease to be active members and then became such members again (see rule G.6: application of rule G.3 to members who opted to leave the Scheme).

Treatment of Separate Periods of Service: Options to Aggregate

General rule: periods of service treated separately

G.2

(1) The general rule is that—

(a) the reckonable service and qualifying service that a re-employed active member was entitled to count immediately before becoming an active member in the current service are disregarded in determining rights in respect of his current service, and

(b) the reckonable service and qualifying service that a re-employed active member is entitled to count as a result of his membership in the current service are disregarded in determining rights in respect of his earlier service.

(2) That general rule is subject to the following provisions of this Part (and see also rule A.10: disregard of short breaks in service).

Option to aggregate earlier membership: previous members of the Scheme

G.3

(1) This rule applies in the case of a re-employed active member who immediately before becoming an active member in the current service was entitled under these Rules to count reckonable service and qualifying service.

(2) The member may opt for that service—

(a) to be aggregated with the reckonable service and qualifying service that he is entitled to count as a result of his membership of the Scheme in the current service for the purpose of determining rights under the Scheme in respect of that membership, and

(b) to be disregarded for all other purposes of the Scheme.

Option to aggregate earlier membership: previous members of the AFPS 1975

G.4

(1) This rule applies in the case of a re-employed active member to whom rule G.3 does not apply who was awarded a preserved pension and lump sum under the AFPS 1975 in respect of qualifying and reckonable service which ended before 6th April 2005.

(2) The member may opt for the qualifying and reckonable service in respect of which the member was awarded the preserved pension—

(a) to be aggregated with the reckonable service and qualifying service that he is entitled to count as a result of his membership of the Scheme in the current service for the purpose of determining rights under the Scheme in respect of that membership, and

(b) to be disregarded for all other purposes.

Procedure for exercising options under rules G.3 and G.4

G.5

(1) An option under rule G.3(2) may only be exercised before the end of the current service.

(2) An option under rule G.3(2) or rule G.4(2) may only be exercised by notice in writing to the Scheme administrator in such form as the Secretary of State requires.

Application of rule G.3 to members who opted to leave Scheme

G.6

(1) Rule G.3 applies to a member who, having been an active member of the Scheme, opted to cease to be such a member whilst continuing to be in service by virtue of which he is eligible to belong to the Scheme as it applies to a member who ceases to be in such service.

(2) In relation to such a person this Part applies as if the member—

(a) had ceased to be in such service when he ceased to be an active member by virtue of the option, and

(b) had begun to be in such service again at the time when he becomes an active member again;

and references to a re-employed active member, the earlier service and the current service are to be read accordingly.

(3) This rule applies subject to rule A.10(2) (disregard of short breaks in service).

Re-employment after ill-health awards

G.7

(1) This rule applies if—

(a) a re-employed active member has received benefits under rule D.5 or D.6, and

(b) the enhancement period exceeds the period beginning with the day on which his early retirement began (“the first retirement day”) and ending with the day before his current service began.

(2) In this rule “the enhancement period” means—

(a) in the case of a member who has received a pension under rule D.5, the amount by which N years exceeds the reckonable service he was entitled to count when he became entitled to the pension under that rule, where N has the meaning given in rule D.5(5), and

(b) in the case of a member who has received a pension under rule D.6, one-third of the further reckonable service referred to in rule D.6(3).

(3) The re-employed member’s current service counts as reckonable service for the purposes of the Scheme only in so far as it is service after the time when the period since the beginning of the first retirement day equals the enhancement period.

PART H — ABATEMENT

Application of Part H

H.1

(1) This Part applies where a person who is a pensioner member or a deferred member of the Scheme—

(a) is re-engaged in service by virtue of which he is eligible to belong to the Scheme, or

(b) is re-engaged in service by virtue of which he is eligible for membership of the Reserve Forces Pension Scheme

(whether or not he is an active member in that service).

(2) In this Part—

(a) a person to whom this Part applies is referred to as a “re-employed pensioner”,

(b) the service that has terminated and in respect of which the pension is or will be payable and the service that he enters on re-employment are referred to respectively as the “old service” and “new service”, and

(c) the pension to which he is or will become entitled in respect of the old service is referred to as the “old service pension”.

Abatement of pensions on re-employment: general rules

H.2

(1) If—

(a) the annual rate of the basic pay payable to the re-employed pensioner as at the last day of his old service (“the old rate”), exceeds the amount of the annual rate of the basic pay payable to him at the time he enters the new service (“the new rate”), and

(b) the annual rate of the old service pension to which he is entitled at the time of entering the new service or, if he is a deferred member, at the time when he becomes entitled to payment of the pension, is greater than the amount of that excess,

the annual rate of the old service pension as at that time is reduced by such amount (“the reduction amount”) as is necessary so that it is equal to the amount of that excess as at that time.

(2) If the new rate equals or exceeds the old rate, the re-employed pensioner is not entitled to payment of the old service pension during the new service.

(3) Where paragraph (1) applies, the annual rate of the old service pension continues to be reduced during the new service by the reduction amount regardless of any increase in the annual rate of the old service pension made after the time when the member is re-employed, or, if he is a deferred member, after the time he becomes entitled to payment of the pension.

(4) In the case of a re-employed pensioner who exercises the option under rule D.10 (option to exchange lump sum for pension) in relation to the old service pension, any increase of the pension as a result of the exercise of the option is disregarded for the purposes of this Part.

Abatement of pensions: effect of changes after re-employment

H.3

(1) This rule applies where after the re-employed pensioner enters the new service the re-employed pensioner is re-employed in another post or his post is regraded.

(2) Rule H.2 applies from the time of the re-employment or regrading as if the re-employed pensioner were entering the new service at that time, and the service before that time is disregarded.

Special rule about annual rate of pay in old service in cases of entitlement to two or more pensions

H.4

(1) This rule applies where the re-employed pensioner is entitled, or apart from this Part would be entitled, to the payment of two or more pensions in respect of old service, (including cases where, in addition to being entitled to one or more pensions under the Scheme, the re-employed pensioner is entitled to one or more pensions under the AFPS 1975).

(2) If two or more of the pensions relate to service that ended before the re-employed pensioner’s pension age, in the application of rules H.2 and H.3 to each of those pensions the annual rate of the basic pay payable to the re-employed pensioner at the time he left his old service is taken to be whichever of those annual rates is the greater or greatest.

Adjustment of basic pay in old service

H.5

(1) If the re-employed pensioner’s new service does not begin immediately after the old service ceases, for the purposes of this Part the annual rate of the basic pay payable to the re-employed pensioner at the time he left his old service is taken to be the adjusted annual rate.

(2) In paragraph (1) “the adjusted annual rate” means the actual annual rate of the basic pay so payable, increased by the same amount, if any, as a pension would have been increased under the Pensions (Increase) Act 1971 by the day on which the new service began if—

(a) it came into payment on the day after the old service ceased, and

(b) it was payable at an annual rate equal to that actual annual rate,

General disregard of effect of abatement

H.6

In Part E of these Rules references to the amount of the pension payable to a person are to be taken as references to the amount so payable apart from any reduction falling to be made under this Part.

PART J — MISCELLANEOUS AND SUPPLEMENTARY PROVISIONS

Claims for and Payment of Benefits

Claims for and payment of benefits

J.1

(1) Notwithstanding any rule of this Scheme according to which any benefit becomes payable at any specified time, no benefit becomes payable under the Scheme unless the person to whom it would be payable has declared—

(a) that he is entitled to it, or

(b) in the case of a benefit under rule E.8, that the person on whose behalf it is payable to him is so entitled.

(2) If a declaration under paragraph (1) in respect of a pension is made after such a specified time, the person is only entitled to payment of the pension in respect of the period beginning with that time and ending with the date on which he makes the declaration if—

(a) in a case where that period does not exceed one year, the Scheme administrator consents, and

(b) in a case where that period exceeds one year, the Secretary of State consents.

(3) A declaration under paragraph (1) must be made in writing in such form as the Secretary of State requires and submitted to the Scheme administrator.

(4) Pensions payable under the Scheme are payable by monthly instalments in arrears.

(5) If—

(a) according to any rule of the Scheme a benefit becomes payable at a specified time, but

(b) as a result of paragraph (1) it becomes payable at a later time, being a time more than one month after that specified time,

the person to whom it is payable is entitled to interest on the amount that becomes so payable.

(6) The interest is payable in respect of the period beginning with the specified time and ending with that later time, at the sterling 3 month London interbank offered rate, with yearly rests.

(7) This rule is disregarded in determining for the purposes of any other provision of these Rules whether a person is entitled to a pension at any time or whether a pension becomes payable immediately.

False statements etc. about ill-health

J.2

(1) This rule applies where—

(a) a pension under D.5, D.6 or D.7 has been awarded to a member, and

(b) subsequently it appears to the Secretary of State that the member made a false declaration about his health or deliberately suppressed a material fact that was relevant to the award.

(2) The Secretary of State may—

(a) cease paying the pension,

(b) withhold the whole or part of the pension, or

Non-assignability

J.3

(1) Every benefit to which a person is entitled under the Scheme is payable to or for his benefit.

Pension Credit Members with two or more Pension Credits

Pension credit members with two or more entitlements

J.4

(1) If a pension credit member is entitled to two or more pension credits—

(a) benefits are payable to or in respect of the member under the Scheme as if he were two or more pension credit members, each being entitled to one of the pension credits (so that two or more pensions or lump sums are payable in respect of the one pension credit member), and

(b) the amounts of those benefits are determined accordingly.

(2) If a pension credit member is also an active member, a deferred member or a pensioner member—

(a) benefits are payable to or in respect of the member under the Scheme as if he were two or more members (so that two or more pensions are payable to or in respect of the one member), and

(b) the amounts of those benefits are determined accordingly.

Forfeiture

Forfeiture of benefits

J.5

(1) The Secretary of State may withhold benefits payable under the Scheme in respect of a member to whom paragraph (1) of rule J.6 applies to such extent as the Secretary of State considers appropriate.

Events enabling forfeiture

J.6

(1) This paragraph applies to a member who is an active member, a deferred member or a pensioner member if he—

(a) is convicted of treason or of one or more offences under the Official Secrets Acts 1911 to 1989 for which the member has been sentenced on the same occasion—

(i) to a term of imprisonment of at least 10 years, or

(ii) to two or more consecutive terms amounting in the aggregate to at least 10 years,

(b) is convicted of an offence in connection with the service that qualifies the member to belong to the Scheme which the Secretary of State considers to have been gravely injurious to the defence, security or other interests of the State, or

(i) arises out of a criminal, negligent or fraudulent act or omission by the member, and

(ii) arises out of or in connection with his service in the armed forces.

(2) This paragraph applies to a person who is convicted of the murder or manslaughter of the member or any other offence which involves the unlawful killing of the member.

(3) In paragraph (2) “unlawful killing” includes unlawfully aiding, abetting, counselling or procuring the death.

Procedure, references etc

J.7

(1) If the Secretary of State proposes to withhold a person’s benefits under rule J.5, he must notify the person in writing that he proposes to do so.

(2) Such a notification must give the person information about rights under—

(a) the arrangements established by the Secretary of State for the resolution of disputes relating to the Scheme that are in force at the time the notification is given, and

(b) Part 10 of the Pension Schemes Act 1993[^f00039] (investigations: the Pensions Ombudsman), in respect of any decision made under rule J.5.

(3) If the Secretary of State withholds benefits under rule J.5 in a case where rule J.6(1)(c) (monetary obligations) applies, the member must be given a certificate showing any amount withheld and the effect of its being withheld on his benefits under the Scheme.

(4) The Secretary of State—

(a) may refer the question whether benefits of a person to whom rule J.6(2) applies should be withheld to the Social Security Commissioner, and

(b) must refer that question if the person to whom that rule applies or an eligible child of the member requests him to do so.

Commutation of Small Pensions

Commutation of small pensions

J.8

(1) Where the annual rate of any of the pensions specified in paragraph (2) does not exceed the small pensions commutation maximum, the Scheme administrator may pay the person entitled to the pension a lump sum of such an amount as the Scheme actuary advises represents the capital value of the pension if—

(a) that person consents, and

(b) in a case where that person is a member and the pension is one which may not be less than his guaranteed minimum, he has reached state pension age.

(2) The pensions are—

(a) a pension to which a member is entitled under Part D,

(b) a pension payable to any person under Part E (death benefits) in respect of a particular member.

(3) If—

(a) a member is entitled to more than one pension in respect of the service by virtue of which he is eligible for membership of the Scheme, or

(b) a person is entitled to more than one pension in respect of the same member and the same service of the member, or

(i) to more than one pension under rule D.3, or

(ii) to one or more pensions within sub-paragraph (a) in addition to one or more pensions under rule D.3,

those pensions may only be commuted under this rule if they do not in aggregate exceed the amount that is permitted to be commuted under all the commutation requirements that apply in the circumstances in question.

(4) The payment of a lump sum under this rule in respect of a pension discharges all liabilities under these Rules in respect of that pension.

(5) In this rule—

“the small pensions commutation maximum” means the amount that is permitted to be commuted, having regard to all the commutation requirements that apply in the circumstances in question, and

“the commutation requirements” means requirements permitting the commutation of small pensions that are imposed— by regulation 19, 20 or 60 of the Occupational Pension Schemes (Contracting-out) Regulations 1996[^f00040], by regulation 2 of the Occupational Pension Scheme (Assignment, Forfeiture, Bankruptcy etc.) Regulations 1997[^f00041], by regulation 3(2)(b) of the Pension Sharing (Pension Credit Benefit) Regulations 2000[^f00042], or by paragraph 7 of Schedule 29 to the Finance Act 2004[^f00043] (which defines trivial commutation lump sums for the purposes of Part 1 of that Schedule).

Determination of Questions

Determination of questions

J.9

Except as otherwise provided by these Rules, any question arising under the Scheme is to be determined by the Secretary of State.

Information, Evidence, Suspension etc.

Information and evidence

J.10

(1) The Secretary of State may require any person who is receiving a pension under the Scheme to provide him with evidence to establish—

(a) the person’s identity, and

(b) his continuing entitlement to payment of any amount.

(2) If such evidence is not provided, the Secretary of State may withhold the whole or any part of any benefits payable under the Scheme in respect of the person.

PART K — AFPS 1975 TRANSFEREES

Preliminary

Application of Part K: meaning of “AFPS 1975 transferee”

K.1

(1) This Part makes provision in relation to persons who—

(a) are active members of the AFPS 1975 immediately before 6th April 2005, and

(b) opt to become members of the Scheme on the basis set out in this Part.

(2) In these Rules a member of the Scheme to whom this Part applies is referred to as an “AFPS 1975 transferee”.

(3) If an AFPS 1975 transferee becomes a re-employed active member, this Part does not apply in relation to his service after he does so unless the break in service immediately before such re-employment does not exceed six months.

Options for AFPS 1975 members to join the Scheme under Part K

K.2

(1) A person who—

(a) would be eligible to join the Scheme by virtue of his service if he met the condition in rule B.1(b)(i) (which requires that the person’s service begins on or after 6th April 2005), and

(b) immediately before that date was an active member of the AFPS 1975 by virtue of that service,

may opt to join the Scheme under the terms of this Part, unless he has been re-employed in the service by virtue of which he is eligible to belong to the Scheme on or after reaching pension age.

(2) The option may only be exercised by giving notice in writing to the Scheme administrator in such form as the Secretary of State requires on or before 31st March 2006 or such later date as the Secretary of State may determine is appropriate in the case of any particular member.

(3) For this purpose the notice is treated as having been given on the date on which it is received by the Scheme administrator.

(4) The option has effect on 6th April 2006 and is irrevocable unless paragraph (5) applies.

(5) This paragraph applies if the Secretary of State gives notice in writing to the person stating that the person may revoke his option by giving notice in writing that he wishes to do so to the Secretary of State before the expiry of the period of 3 months beginning with the date on which the notice is given by the Secretary of State.

(6) Where a person revokes his option in accordance with paragraph (5), these Rules apply as if he had never opted to join the Scheme.

Transfer of Service from the AFPS 1975

Service credited from the AFPS 1975

K.3

(1) On becoming an AFPS 1975 transferee, a member becomes entitled to count under the Scheme—

(a) a period of qualifying service equal in length to the period of qualifying service which the member was entitled to count under the AFPS 1975 (but not exceeding 35 years), and

(b) a period of reckonable service equal in length to the period of reckonable service which the member was entitled to count under the AFPS 1975 (but not exceeding 35 years).

Treatment of added years: contributions paid before 6th April 2006

K.4

For the purposes of rule K.3, the reckonable service of a member who—

(a) has bought added years of pension credit under the AFPS 1975, or

(b) is buying them under a contract which is in force on 5th April 2006,

is calculated as if he were leaving the AFPS 1975 on that date.

Treatment of preserved awards

K.5

(1) This rule applies where a member who is an AFPS 1975 transferee—

(a) has been awarded a preserved pension and lump sum under the terms of the AFPS 1975 in respect of service which ended before the beginning of the service which is current on 5th April 2006, and

(b) neither the pension nor the lump sum has been brought into payment by that date.

Transfers in: transitional provision

K.6

(1) This rule applies where—

(a) a member applied in writing for the AFPS 1975 to accept a transfer value payment in respect of him,

(b) the member is an AFPS 1975 transferee, and

(2) Part F applies as if the member had applied under rule F.7 for the Scheme to accept the payment.

Pension debit members

K.7

(1) This rule applies where—

(a) on becoming a member of the Scheme an AFPS 1975 transferee is a pension debit member, and

(b) in the opinion of the Scheme administrator it is necessary for the purpose of giving effect to the pension sharing order to which the member’s rights are subject for some or all of the benefits to which the pension member is entitled under the Scheme to be taken in a different form from that in which he would otherwise be entitled to take them.

(2) The Scheme administrator may, after taking advice from the Scheme actuary, make such modifications to the member’s rights as to the form of those benefits as he considers necessary for that purpose.

Disapplication of rule E.6

K.8

Rule E.6 (reduction in pensions under rules E.1 and E.2 in cases of wide age disparity) does not apply to a pension payable under rule E.1 in the case of a member who was an AFPS 1975 transferee if the member had been the spouse or civil partner of the person to whom the pension is payable continuously since before 6th April 2006 until the member’s death.

SCHEDULE 2 — TEMPORARY MODIFICATIONS OF THE ARMED FORCES PENSION SCHEME 2005

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Signed

Signed by authority of the Secretary of State for Defence

Ivor Caplin — Under Secretary of State Ministry of Defence — 8th March 2005

Explanatory note

(This note is not part of the Order)

This Order is made under the Armed Forces (Pensions and Compensation) Act 2004 (c. 32) and establishes a new pension scheme for the armed forces (“the Scheme”) for persons joining the armed forces on or after 6th April 2005 or in service immediately before that date and wishing to join the scheme.

Article 1 provides that the Order comes into force on 6th April 2005.

Article 2 establishes the Scheme and provides that it is to be known as “the Armed Forces Pension Scheme 2005”. It introduces Schedule 1 to the Order where the rules of the Scheme are set out.

The rules are divided into lettered Parts dealing with different aspects of the scheme.

Part A sets out definitional matters and, in particular, gives the meaning of expressions like “final pensionable earnings” and “reckonable service” that are used in the provisions relating to entitlement to and calculation of benefits under the Scheme. It provides for a “pension age” of 55 (which is the age at which members still in service in the armed forces are entitled to a retirement pension) and a “pension benefit age” of 65 (which is the age at which members who left service before 55 become entitled to a retirement pension that has been preserved for them in the Scheme).

Part B sets out the conditions that must be met for a person to be eligible to join the Scheme, and also deals with leaving and rejoining it.

Part C enables members of the Scheme to make voluntary contributions to buy further reckonable service. (There is no obligation for members to make contributions under the Scheme.)

Part D deals with the pensions and lump sum benefits to which members become entitled on retirement. The rules in Part D set out different entitlements for those who retire on or after reaching 55, those who retire earlier, those who want earlier payment with actuarial reduction, those who retire with permanent serious ill-health or significant impairment of capacity for gainful employment, and pension credit members. They also enable ill-health pensions to be reviewed and members to exchange lump sums for higher pensions or allocate part of their pension to others.

Part E sets out the benefits that are payable on the death of a member. It provides for pensions to be payable to surviving spouses, civil partners and other adult dependants and eligible children. It also provides for lump sums to be paid to nominees, adults to whom a pension is payable or personal representatives.

Part F deals with members' rights under the Scheme to have a transfer payment paid by the Scheme into another scheme, and the right of a member to have a transfer payment from another scheme accepted by the Scheme so that he is entitled to count further reckonable service in the Scheme. (The rights to transfers out supplement the members' rights under the Pension Schemes Act 1993 (c. 48).) There are special arrangements for those going to or from other public sector schemes.

Part G deals with members who have more than one period of service that counts for the Scheme because they are re-employed. As a general rule the rights relating to such separate periods of service are dealt with separately, but the member is given the option to aggregate earlier periods.

Part H deals with the abatement of pensions in certain circumstances where pensioners are re-engaged in service that entitles them to belong to the Scheme or the Reserve Forces Pension Scheme.

Part J contains miscellaneous and supplementary provisions, for example, relating to claims for and payment of benefits, the forfeiture of benefits in certain circumstances, the commutation of small pensions and the information and evidence that may be required by the Scheme.

Part K provides for the transfer of persons who belong to the pension arrangements applicable to regulars in the armed forces immediately before 6th April 2005 and opt on or before 31st March 2006 to join the Scheme on 6th April 2006. Such transferees can count all the reckonable service that was counted under the old arrangements as reckonable service in the Scheme. They can also count added years of reckonable service that they have bought under the old arrangements before 6th April 2006.

Article 2 also introduces Schedule 2 which makes modifications of the Scheme’s rules for the period until 6th April 2006 when the arrangements relating to the approval of pension schemes for tax purposes change as a result of the coming into force of the relevant provisions of the Finance Act [2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12). Article 2 provides for the Scheme’s rules to be read as if references to civil partners and civil partnerships were omitted until section 1 of the Civil Partnership Act [2004 (c. 33)](https://www.legislation.gov.uk/ukpga/2004/33) comes into force in England and Wales. It also provides for the Scheme’s rules to be read with the omission of references to Chapter 5 of Part 4 of the Pension Schemes Act 1993 (early leavers: cash transfer sums and contributions refunds) until that Chapter comes into force.

Article 3 sets out the consent requirements for the Scheme for the purposes of section 3(2) of the Armed Forces (Pensions and Compensation) Act 2004. These are the requirements that must be met before the Scheme may be modified in a way that would or might adversely affect any member’s rights. It provides for notices to be given to members about proposals to make such modifications and for the modifications not to affect members unless they have consented or have not responded.

Article 4 makes a small consequential amendment in the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations 1997 (S.I. [1997/785](https://www.legislation.gov.uk/uksi/1997/785)).

A full regulatory impact assessment has not been produced on this instrument as it has no impact on the costs of business, charities or the voluntary sector.

Footnotes

[^f00001]: 2004 c. 32.

[^f00004]: 1995 c. 26. The definition of “pension credit rights” in subsection (1) of section 124 and subsection (2A) of that section were inserted by paragraph 61 of Schedule 12 to the Welfare Reform and Pensions Act 1999 (c. 30).

[^f00005]: S.I. 1997/785.

[^f00006]: 1978 c. 30.

[^f00007]: 1865 c. 73; section 3 was amended by the Armed Forces (Pensions and Compensation) Act 2004, section 4.

[^f00008]: which is available from Her Majesty’s Stationery Office.

[^f00009]: 1917 c. 51.

[^f00010]: Subsection (2) was inserted in section 55 by section 141(1) of the Pensions Act 1995 (c. 26).

[^f00011]: 1993 c. 48. Section 17 is amended by paragraph 1 of Schedule 5 to the Child Support, Pensions and Social Security Act 2000 (c. 19).

[^f00012]: Section 109 is amended by section 55 of the Pensions Act 1995 (c. 26).

[^f00013]: Section 15A is inserted by section 32(3) of the Welfare Reform and Pensions Act 1999 (c. 30).

[^f00014]: 1996 c. 18. Section 75A is inserted by section 3 of the Employment Act 2002 (c. 22).

[^f00015]: 1978 c. 44.

[^f00017]: The definition of “pension credit” was inserted in section 124(1) by paragraph 61 of Schedule 12 to the Welfare Reform and Pensions Act 1999 (c. 30).

[^f00018]: The definition of “pension credit member” was inserted in section 124(1) by paragraph 61 of Schedule 12 to the Welfare Reform and Pensions Act 1999 (c. 30).

[^f00019]: The definition of “pension credit rights” was inserted in section 124(1) by paragraph 61 of Schedule 12 to the Welfare Reform and Pensions Act 1999 (c. 30).

[^f00020]: 1999 c. 30.

[^f00022]: 1996 c. 14.

[^f00023]: Section 1 is amended by section 285 of the Pensions Act 2004 (c. 35).

[^f00024]: The definition of “pensionable age” is inserted by paragraph 17 of Schedule 4 to the Pensions Act 1995 (c. 26).

[^f00025]: S.I. 1996/1172. Regulation 55(1) is amended by regulation 4(11) of S.I. 1997/786.

[^f00027]: 1980 c. 9.

[^f00028]: 1989 c. 24. Paragraphs 5A and 5B are inserted in Schedule 5 by section 265(1) of the Pensions Act 2004 (c. 35).

[^f00029]: 2004 c. 12.

[^f00030]: S.I. 2005/437.

[^f00031]: S.I. 2000/1054.

[^f00032]: Section 68A is inserted by section 36 of the Welfare Reform and Pensions Act 1999 (c. 30).

[^f00033]: 1993 c. 48.

[^f00034]: Subsections (2) to (2C) are substituted for subsection (2) of section 9 by section 136(3) of the Pensions Act 1995 (c. 26); section 9(2B) is amended by paragraph 35(2) of Schedule 1 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2).

[^f00035]: Chapter 5 (sections 101AA to 101AI) is inserted by section 264 of the Pensions Act 2004 (c. 35).

[^f00036]: 1826 c. 16.

[^f00037]: 1870 c. 23.

[^f00038]: 1948 c. 58.

[^f00039]: 1993 c. 48.

[^f00040]: S.I. 1996/1172. Regulation 20 was amended by regulation 2(3) of S.I. 2000/2975. Regulation 60 was amended by regulation 4(12) of S.I. 1997/786.

[^f00041]: S.I. 1997/785.

[^f00042]: S.I. 2000/1054.

[^f00043]: 2004 c. 12.

PART A — INTERPRETATION ETC.

Interpretation: general

A.1

(1) This Part applies for the interpretation of the Scheme.

(2) The rules of the Scheme are to be construed without reference to any other scheme applicable to the armed forces (except where they refer to the application of another such scheme).

(3) Without prejudice to section 23 of the Interpretation Act 1978[^f00006], that Act applies for the interpretation of the rules of the Scheme as it applies to an Act of Parliament.

(4) In the rules of the Scheme, unless the context otherwise requires, the following expressions have the following meanings—

“active member” has the meaning given in section 124(1) of the Pensions Act 1995 and, except where the context otherwise requires, refers to membership of the Scheme, (but see paragraphs (5) and (6));

“active membership period” is to be read in accordance with rule A.6;

“the AFPS 1975” means the occupational pension scheme arrangements, other than the Scheme, that are open to members of the armed forces and set out in—Orders in Council made under section 3 of the Naval and Marine Pay and Pensions Act 1865[^f00007],the Army Pensions Warrant 1977[^f00008], andOrders and regulations made under section 2 of the Air Force (Constitution) Act 1917[^f00009],

or any instrument amending or replacing any of those instruments;

“AFPS 1975 transferee” has the meaning given in rule K.1(2);

“AFPS 2015” means the scheme established by the Armed Forces Pension Regulations 2014;

“assumed pay” has the meaning given by rule A.3(1);

“contributions equivalent premium” has the same meaning as in the Pension Schemes Act 1993 (see section 55(2)[^f00010]);

“deferred member” has the meaning given in section 124(1) of the Pensions Act 1995 and, except where the context requires otherwise, refers to membership of the Scheme, (but see paragraph (5));

“eligible child” has the meaning given in rule E.9;

“employment” includes an office or appointment, and related expressions are to be read accordingly;

“final pensionable earnings” has the meaning given in rule A.4;

“fixed protection member” has the meaning given in rule B.6;

“flexible service” means one or both of the following types of service—part-time service;restricted separation service,and references to a member serving on flexible terms must be construed accordingly;

“gratuity-earning service” means service on a short service commission on terms providing that the person serving is not eligible to be a member of this Scheme or the AFPS 1975, but will be eligible for the payment of a gratuity on leaving service, subject to the satisfactory completion of that person’s service;

“the guarantee date” has the meaning given in rule F.2(2);

“the guaranteed cash equivalent transfer value payment” has the meaning given in rule F.3(2);

“guaranteed minimum” means the guaranteed minimum as defined in sections 14 and 17 of the Pension Schemes Act 1993[^f00011] (minimum pensions for earners, widows and widowers)—as increased in accordance with the requirements of section 109 of that Act[^f00012] (annual increase of minimum pensions), andin a case where a reduction has been made under section 15A of that Act[^f00013] (reduction of guaranteed minimum in consequence of pension debit), as reduced in accordance with that section;

“Gurkha Pension Scheme transferee” has the meaning given in rule L.1(3);

“member”, in relation to the Scheme, means an active member, a deferred member, a fixed protection member, a pensioner member or a pension credit member;

“occupational pension scheme” has the meaning given in section 1 of the Pension Schemes Act 1993;

“ordinary adoption leave” means leave which, in the opinion of the Secretary of State, corresponds to ordinary adoption leave within the meaning of section 75A of the Employment Rights Act 1996[^f00014];

“ordinary maternity leave” means leave which, in the opinion of the Secretary of State, corresponds—in relation to any period before 22nd August 1996, to leave under section 33 of the Employment Protection (Consolidation) Act 1978[^f00015], andin relation to any period after 21st August 1996, to leave under section 71 of the Employment Rights Act 1996;

“part-time service” means—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;for members who are officers, a period of service on equivalent terms of service;

“... paternity leave” means leave which, in the opinion of the Secretary of State, corresponds to paternity leave within the meaning of regulation 4 or 8 of the Paternity and Adoption Leave Regulations 2002;

“pay period”, in relation to a person, means a period by reference to which the person’s earnings in the service by virtue of which he is eligible for membership of the Scheme are payable;

“pensionable earnings” has the meaning given in rule A.2;

“pension age” means the age of 55;

“pension benefit age” means the age of 65;

“pension credit” has the meaning given in section 124(1) of the Pensions Act 1995[^f00017];

“pension credit member” has the meaning given in section 124(1) of the Pensions Act 1995[^f00018];

“pension credit rights” has the meaning given in section 124(1) of the Pensions Act 1995[^f00019];

“pension debit” means a debit under section 29(1)(a) of the Welfare Reform and Pensions Act 1999[^f00020];

“pension debit member” means a member of the Scheme whose benefits or future benefits under the Scheme have been reduced under section 31 of the Welfare Reform and Pensions Act 1999 (reduction under pension sharing order following divorce or nullity of marriage), whether before or after he became a member of the Scheme;

“pensioner member” has the meaning given in section 124(1) of the Pensions Act 1995 and, except where the context otherwise requires, refers to membership of the Scheme (but see paragraphs (6) and (7));

“pension sharing order” means any provision or order specified in section 28 of the Welfare Reform and Pensions Act 1999;

“personal pension scheme” means a personal pension scheme within the meaning of section 1 of the Pension Schemes Act 1993 which is registered under section 153 of the Finance Act 2004 (registration of pension schemes);

“PSPJOA 2022” means the Public Service Pensions and Judicial Offices Act 2022;

“public sector transfer arrangements” means arrangements recognised by the Secretary of State as providing reciprocal arrangements for the payment and receipt of transfer values between the Scheme and other occupational pension schemes;

“qualifying service” is to be read in accordance with rule A.7;

“reckonable service” is to be read in accordance with rule A.8;

“re-employed active member” has the meaning given by rule G.1(3);

“remediable service” has the meaning given in section 1 of PSPJOA 2022, and refers to service in an employment or office that is pensionable service under the Scheme, whether or not by virtue of section 2(1) of PSPJOA 2022;

“remedy member” means a member with remediable service;

“the Reserve Forces Pension Scheme” means the occupational pension scheme established by regulations made by the Defence Council, in exercise of the powers conferred on them by sections 4(2) and 8(1)(a) of the Reserve Forces Act 1996[^f00022];

“restricted separation service” means—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;for members who are officers, a period of service on equivalent terms of service;

“the Scheme” means the Armed Forces Pension Scheme 2005;

“the Scheme actuary” means the actuary appointed by the Secretary of State for the time being to provide a consulting service on actuarial matters relevant to the Scheme;

“the Scheme administrator”, in relation to a member or a function, means the person responsible for the day to day administration of the Scheme in relation to the member or in respect of the function;

“Scheme manager” means the Secretary of State;

“the Scheme medical adviser” means the medical adviser appointed by the Secretary of State for the time being to provide a consulting service on medical matters relevant to the Scheme;

“service reduction percentage” has the meaning given in rule A.2A;

“shared parental leave” means leave under section 75E or 75G of the Employment Rights Act 1996 , or Articles 107E or 107G of the Employment Rights (Northern Ireland) Order 1996.;

“tax year” means a year of assessment for income tax purposes;

“these Rules” means the rules of the Scheme set out in this Schedule;

“stakeholder pension scheme” means a scheme which is a stakeholder pension scheme for the purposes of Part 1 of the Welfare Reform and Pensions Act 1999 (see section 1 of that Act[^f00023]);

“state pension age” means pensionable age, as defined in section 181(1) of the Pension Schemes Act 1993[^f00024];

“weekly rate”, in relation to a guaranteed minimum pension, has the same meaning as in regulation 55(1) of the Occupational Pension Schemes (Contracting-out) Regulations 1996[^f00025].

(5) In determining whether a person who is an active member or a pensioner member of the Scheme is also a deferred member of it, the fact that he is an active member or a pensioner member and his rights as such are to be disregarded.

(6) In determining whether a person who is an active member of the Scheme is also a pensioner member of it, the fact that he is an active member and his rights as such are to be disregarded.

(7) In determining whether a person is a pensioner member of the Scheme, the fact that he is not entitled to payment of pension because of Part H (abatement) is to be disregarded.

Meaning of “pensionable earnings”

A.2

(1) In these Rules “pensionable earnings”, in relation to a person who is a member, means—

(a) basic pay in the service by virtue of which the person is a member for a person of his rank and seniority, and

(b) any other amount if and to the extent that the Secretary of State has determined that it is to be treated as pensionable earnings.

Meaning of “assumed pay”

A.3

(1) In the circumstances specified in paragraph (2) a member is treated as receiving or as having received amounts equal to the pensionable earnings that the member would have received if those circumstances had not applied, with such increase, if any, as the Secretary of State considers appropriate; and in these Rules the amounts a member is treated as receiving or as having received under this paragraph are referred to as “assumed pay”.

(2) The circumstances are that the member is an active member who—

(a) is on secondment to a different employer under an arrangement providing for the member to continue to be an active member of the Scheme in respect of his service although the member is paid for the service by that employer,

(b) is receiving statutory maternity pay,

(d) is on ... paternity leave,

(dd) is on paid shared parental leave;

(e) is on ordinary adoption leave, or

(f) is on unpaid leave for a period which the Secretary of State has agreed can count as reckonable service.

Meaning of “final pensionable earnings”

A.4

(1) In these Rules “final pensionable earnings”, in relation to a member, means the greatest amount that is the member’s total pensionable earnings for 365 consecutive days falling within the period of 3 years ending with the last day of his reckonable service.

(1A) 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.

(2) If the person was not in service as a member of the armed forces during any period of 365 consecutive days falling within the period of 3 years mentioned in paragraph (1), that paragraph applies as if it referred to the person’s annualised pensionable earnings in the period of service ending with the last day of his reckonable service.

(3) The person’s annualised pensionable earnings in a period of service are the amount given by the formula—

$$PE×365N$where—PE is the person’s pensionable earnings for the period, andN is the number of days in the period for which pensionable earnings were received.$

(4) If at any time during the period of 3 years mentioned in paragraph (1) or the period mentioned in paragraph (2) the member is treated under rule A.3(1) as receiving assumed pay, or would be if he were a member of the Scheme throughout that period, for the purposes of those paragraphs his pensionable earnings for each day during that period when he is so treated include the assumed pay for that day.

Adjustments for inflation in determining final pensionable earnings

A.5

(1) For the purpose of determining which is the greatest amount mentioned in rule A.4(1), the amount of pensionable earnings, as determined in accordance with rule A.4, for that part of the period of 365 days that falls 365 days or more before the last day of service is adjusted for inflation.

(2) Any adjustment made for the purpose of determining final pensionable earnings shall be disregarded for all other purposes of the Scheme.

(3) The reference in paragraph (1) to adjusting for inflation the amount of pensionable earnings for part of a period is a reference to increasing it by the same amount as that by which an annual pension of an amount equal to those earnings would have been increased under the Pensions (Increase) Act 1971 on the day following the last day of reckonable service if the pension—

(a) were eligible to be so increased, and

(b) had come into payment on the day following the last day of that period.

Active membership period

A.6

In these Rules references to a person’s active membership period, in relation to the Scheme or to another scheme, are to—the period during which the person has been an active member of the Scheme or, as the case may be, that scheme, orin the case of a person whose active membership has not been continuous, the aggregate period during which the person has been such a member.

Qualifying service

A.7

(1) In these Rules references to a member’s qualifying service, in relation to the Scheme, are references to the aggregate of the following periods—

(a) the period during which the member is in service in respect of which he—

(i) receives earnings that are pensionable earnings for the purposes of the Scheme, or

(ii) is treated under rule A.3 as receiving assumed pay,

(b) any period for which the member is in service to which rule C.6 applies (secondment to NATO or the UN etc.),

(c) in the case of a member who exercises an option under rule G.3 or G.4 for an earlier period of service to be aggregated, the qualifying service he is entitled to count as a result, ...

(d) in the case of an AFPS 1975 transferee, the qualifying service he is entitled to count under the Scheme under rules K.3 to K.5. ...

(e) in the case of a Gurkha Pension Scheme transferee, the qualifying service the member is entitled to count under the Scheme under rule L.4 or L.5,

(f) in the case of a person whose service was gratuity-earning service before its terms were changed and who meets the condition in paragraph (1A), that period of gratuity-earning service, and

(g) in the case of a person who was paid a gratuity on the satisfactory completion of gratuity-earning service and has repaid that gratuity together with interest at the Bank of England base rate, calculated on a monthly basis, from the day after the last day of service in respect of which the gratuity was awarded to the day before the date of re-entry within the period of one year of becoming an active member of this Scheme, that completed service.

(1A) The condition referred to in paragraph (1)(f) and rule A.8(1)(h) is that the person has surrendered all rights to a gratuity in respect of the gratuity-earning service in consideration for which the person becomes eligible for membership of this Scheme.

(2) In the case of a person in respect of whom a transfer value in respect of his rights under another occupational pension scheme has been accepted under Part F (transfers), any period during which the person was an active member in any scheme in respect of which those rights accrued counts as qualifying service for the purposes of rules D.2(1)(a), D.5(1)(b), D.6(1)(b) and D.7(1)(b) (entitlement to pensions).

Reckonable service

A.8

(1) In these Rules references to a member’s reckonable service or the period of reckonable service that a member can count are references to the aggregate of the following periods—

(a) the period during which the member is in service in respect of which he—

(i) receives earnings that are pensionable earnings for the purposes of the Scheme, or

(ii) is treated under rule A.3 as receiving assumed pay,

(b) any additional period the member is entitled to count as reckonable service under rule C.3 (effect of making contributions),

(c) any additional period the member is entitled to count under rule C.6 (purchase of added years for members seconded to NATO or the UN etc.),

(d) in the case of a person in respect of whom a transfer value in respect of his rights under another pension arrangement has been accepted under Part F (transfers), the reckonable service he is entitled to count as a result of the transfer,

(e) in the case of a member who exercises an option under rule G.3 or G.4 for an earlier period of service to be aggregated, the reckonable service he is entitled to count as a result, ...

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