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Advice & Guides

No. 9 Pension Enquiry TOP10

For Pensions Awareness Week - an example of the pension questions we receive, helping you better understand your pension. Here's one on timing of retirement.

Question:

I am thinking of PVR in the next year (ie I was thinking of submitting my PVR in Feb 2021, in order to leave the service in Feb 2022) and was hoping to get some advice regarding the best dates to PVR on my engagement?

Answer:

The optimum time to retire within the year is usually different for each scheme you are a member of.

We do recommend that members with accruals on the AFPS75 scheme who are planning on retiring early in a year, consider delaying until early April onwards. This is because 1 April sees the introduction of the new AFPS75 pension rates, generally uplifted to reflect the AFRB pay awards. Retiring between Jan- March therefore consigns you to a retirement built on the prior year’s pay rates. Essentially the pension code (rate table) increases annually on 1 April in line with any AFPRB award that year, so leaving after an AFPRB award would ensure that you benefit from that increase; for example, if we have two individuals with identical career histories and one retired in late March 2019 and the other in early April the same year – the individual that left in April would have received a 2.9% better pension than the other leaving in March. This is because  the AFPRB award for 2019 was 2.9%. The consideration should be tempered by the fact that in some years there are zero % increases to pensions and military salaries and you are taking a punt on the AFPRB award.

Colin Thomas, Pension Adviser

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