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Our Top 10 Pension Q&A

Another topic making its way up the chart is Extension of Service in at No. 5

Q: I have been offered an extension of service from 22 to 24 years. If I accept the extension but decide to leave sooner and not serve 24 years, will this negatively affect my pension? I am a non-commissioned rank on AFPS 75/15

A: As a non-commissioned rank, there is no penalty to your pension scheme awards for accepting an extension of service and leaving prior to your new end of service

Q: I have been offered an extension of commission from 16 years to age 55. If I accept the new commission but decide to leave sooner than age 55, will this negatively affect my pension? I am a commissioned rank on AFPS 75/15.

Commissioned ranks on AFPS 75 are subject to Premature Voluntary Retirement (PVR) rates and Compulsory Retirement (CR) rates. If an individual were to leave service on any date other than their end of commission date, their AFPS 75 pension would be calculated using PVR rates. PVR rates are of a lower value than CR rates, however, the difference between PVR and CR rates reduce the longer an individual serves. PVR and CR rates eventually even out to the same value, the point at which this happens depends on the rank. Therefore, dependent on rank and length of service, an individual’s AFPS 75 award could be reduced if they accepted an extension of commission but left early on PVR rates.

AFPS 15 is a salary based scheme that accrues at a fixed annual rate, therefore it is not affected by PVR or CR rates. 

Join us again tomorrow with No. 4 - Divorce and No. 3 Commutation

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