Not every Serviceman and woman puts themselves in harm’s way, but all need to consider how their spouse or partner would fare if they were to die in service – for whatever reason.
In this short article we wrote for the latest issue of RAF News, we look at what the three Armed Forces Pension Schemes (AFPSs) would provide should the worst happen.
First, the benefits paid under the rules of each of the three schemes as they apply to people who have only been members of one scheme.
AFPS 75: spouse or civil partner benefits comprise:
– a death-in-service lump sum worth three times the spot rate of pay for the member’s rank – not their actual salary, which is particularly relevant in the case of Medical & Dental Officers where the difference is very significant (to the detriment of the individual);
– a Short Term Family Pension (STFP) – this means the spouse or civil partner would receive the member’s pensionable pay for 91 days (182 days if there are eligible children); followed by
– a pension of 50% of the member’s pension entitlement based on Invaliding Rates, payable for life.
But do note that unmarried partners are not eligible under AFPS 75 rules unless the death is deemed to be attributable to service, in which case there may be an entitlement .
AFPS 05: spouse, civil partner or eligible partner* benefits comprise:
– a death-in-service lump sum worth four times pensionable pay; and
– a pension for life of 62.5% of the members pension entitlement based on their actual Reckonable Service (RS) plus ½ of the service he or she could have given to age 55.** If this totals more than 37.33 years service, the adult pension will be based on 37.33 years.
AFPS 15: spouse, civil partner or eligible partner* benefits comprise:
– a death-in-service lump sum worth four times pensionable pay; and
– a pension for life of 62.5% of the pension entitlement based on the member’s RS plus ½ of the service he or she could have given to age 60.**
* to be eligible both must be single, the partner must be cohabiting with the member and he or she must be financially dependent or interdependent with them
** this may be subject to reduction if the spouse, civil partner or eligible partner is more than 12 years younger than the member.
Personnel who were under the age of 45 on 1 April 2012 were transferred to AFPS 15 on 1 April 2015 and have protected benefits in their ‘old’ scheme. That means that there are potential entitlements under both their ‘new’ and ‘old’ schemes but any benefits paid by one scheme are taken into account when benefits are assessed under the other.
Time for an example!
Toby joined the RAF on 1 April 2004 – his 18th birthday. He was a married man who died on 31 March 2019 as a Sergeant. This gives him 11 years in his ‘old’ scheme (either AFPS 75 or AFPS 05) and 4 years in the ‘new’. His Final Pensionable Pay (FPP) is £40,000 and his AFPS 15 pension is £3,600pa.
From AFPS 15 his wife would receive:
– a lump sum worth four times pensionable pay (£160,000);
– Toby’s annual pension would have been £3,600. His enhancement is half of the 27 years he could have served until 60 multiplied by his average pension (13.5 x £900=£12,150) but he is entitled to only 4/15th of that (£3,240). Toby’s adjusted entitlement would have been £6,840 (£3,600+£3,240). His wife’s entitlement is 62.5% of his adjusted entitlement – so £4,275 pa.
Had his earlier service been as an AFPS 75 member, Toby’s entitlement would be based on his pension as if he had retired ‘normally’ with 11 years’ reckonable service (£5,319.77) plus 11/15 of the difference between the 15 year pension rate of pension for his rank (£7,254.30) and the 15 year invaliding rate for his rank (£9,232). His total entitlement would be £5,319.77 plus £1,448.85 (£1,975.70 x11/15) totalling £6,768.62, so his wife would receive £3,384.31pa in addition to her AFPS 15 pension. There would be no STFP payable because he was still serving – see below. These figures are arrived at using the 2018/19 Pension Code plus an assumed increase of 2%.
Had his earlier service been as an AFPS 05 member, Toby’s unadjusted pension enhancement would have been 11 years (half of the number of years he could have served to age 55) but he is only entitled to 11/15ths of this enhancement (8.0667 years). His pension entitlement would be based on his 11 years reckonable service plus the additional 8.0667 years (total of 19.0667 years), multiplied by his FPP, then divided by 70 (the pension scheme’s accrual rate (18.0667 x 40,000/70 =) £10,323.83. His wife would receive (£10,323.83 x 62.5% = ) £6,452.39 pa in addition to her AFPS 15 pension.
Finally, a word about the STFP where the member transferred to AFPS 15. STFP is paid if the member dies with a pension in payment but not if he or she dies in service or before drawing their preserved pension. So if Toby had already left the service when he died, his wife would have been eligible for a STFP by virtue of his AFPS 75 service.
Not easy!
Image: MoD – link
