Members should be advised that the McCloud remedy situation is continually moving whilst the policy is being developed, however here is the current sitrep.
Armed Forces personnel who were in service both on or before 31 March 2012 and on or after 1 April 2015 with any break in service of less than 5 years will have the option to elect whether they wish to receive legacy benefits or equivalent AFPS 15 benefits for the remedy period (1 April 2015 – 31 March 2022). On 1 April 2022 all serving personnel became members of AFPS15, and all legacy schemes closed on 31 March 2022.
The McCloud public sector pensions remedy will be delivered in two stages - the prospective and retrospective remedy. The prospective remedy saw all serving personnel move onto AFPS 15 on 1 April 2022. The retrospective remedy gives Service personnel an opportunity to choose, when they access their pension or Early Departure Payment (EDP), which pension benefits they wish to receive (legacy scheme, or the equivalent AFPS 15 benefits) for the remedy period. This is referred to as Deferred Choice Underpin (DCU).
Due to the complexities of the remedy, HM Treasury and Public Sector schemes are still working through outstanding policy and amending scheme legislation. Public Sector Pension Schemes require to complete this work, to implement the DCU, by 1 October 2023. Unfortunately, neither we nor Veterans UK are yet in a position to be able to provide "McCloud choice comparative figures”.
Eligible members who have already left the Armed Forces with a pension in payment (following normal or medical retirement), eligible dependants with a pension in payment in cases where a member has very sadly died, and members who retire from the military prior to being able to make their election for the remedy period (whilst the system works to catch up) will be contacted by Veterans UK after the implementation date (i.e. after 1 October 2023) and be provided with details of their election choice.
Eligible members who exit the Armed Forces before 1 October 2023 (and thereafter until the system catches up) should plan to leave on their current pension terms.
Once eligible members receive their election choice and have made their decision, their pension will be adjusted subsequently, if required, and retrospective payment action will be taken. In the meantime, we are asking all our members to “stand easy” until they receive the initial communication from MOD/Veterans UK, as it is not until you have this that we will be able to provide individual guidance.
Once the system has ‘caught up’, individuals leaving the military with entitlement to immediate benefits (i.e. EDP and Immediate Pension) will be invited to make their election towards the end of their service. Personnel who leave without entitlement to immediate benefits will be invited to make their election just prior to their preserved/deferred pension coming into payment.
From 1 October 2023, personnel who decide to leave the Armed Forces will receive pension forecasts which will include both their legacy pension and AFPS 15 equivalent benefits for the remedy period. In the meantime, communication releases will update members on progress and timetable the intended activity to regularise this policy.
The MoD has announced that the launch of the revised Armed Forces pensions calculator will be delayed. This is due to the complexity of the McCloud remedy and a number of cross-government issues that need to be finalised. Until they are resolved the changes to the calculator, unfortunately, cannot be completed. At this stage the MoD is unable to confirm when the calculator will become available but will keep members updated on its progress. You can see the full announcement here
To implement the prospective remedy for McCloud (i.e. to move everyone to AFPS15 from April 2022) ) the MOD undertook a public consultation regarding the changes to the Armed Forces Pension Scheme (AFPS) regulations and the effect on members. This consultation began on 22 November 2021 and concluded on 31 January 2022. You can read our response to the public consultation here
We expect a public consultation for the retrospective remedy will take place later this year.
We will of course, continue to refresh the Members area of our website with new reference information and guidance for our Members as it becomes available, including updating our McCloud FAQS. Meanwhile you can read our McCloud archive here
*Updates shown in red