Read all our updates on McCloud  – find out more

Articles & Guides

Armed Forces Pension Scheme: What Matters to Us

Despite assurances that public service pensions in payment remain safe, the top strategic issue facing the Society today remains the long-term affordability of Armed Forces pensions – and the potential for government to seek ways to reduce the future costs of public service pensions.
With that in mind, and looking to the long term, the FPS Council held a strategy session in late 2020 to discuss the purpose and facets of the AFPS they believe are important and, given the unique nature of military service, potentially enduring.
This was preceded by significant analysis by the Society’s senior leadership team plus external (pro bono) support from experts in commercial defined benefit pensions. The outcomes of this work will help the Society frame debate with the MOD and other stakeholders during any future review of the AFPS proposed by government. And this could happen even within the auspices of AFPS15, which despite having been declared to be ‘good for 25 years’ (to at least 2040), could always be subject to further review.
The distillation of this work is set out in the model above, which identifies the purpose, pillars and foundation of the AFPS – supporting the Services’ career structures.
Our Chief Executive explained the model to the Armed Forces Pay Review Body in late January as part of a pensions-focused session on the role of the Society, members’ concerns (including the impact of pension taxation) and the extent to which people understand the value and non-contributory nature of the AFPS.
The CE was able to offer a ‘here’s one we prepared earlier’ analysis and explain the framework in which one aspect such as ‘non-contributory’ sits.
There is always more that can be done to make serving personnel more aware of the true value of their pension – noting that AFPS benefits are taken into consideration in determining pay scales and that service personnel all contribute through their selfless commitment to the mission 24/7, 365 days a year.
That, it can be argued, much like death and ill health retirement benefits, is a reciprocal element of a non-contributory pension scheme.
Fundamental to any AFPS must be the ability to genuinely sustain operationally effective Armed Forces – so they can continue to operate worldwide, wholeheartedly committed to the cause, confident that their long-term financial wellbeing has not been compromised by their selfless service. If this trust were lost, the consequences could be severe.
As always, we welcome our Members comments ahead of any broader debate. Be rest assured, we have not been asked for our view yet – but if the call comes, you now know our starting position.

We use cookies to ensure you get the best experience on our website. To find out more read our Cookies Policy.