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). All serving personnel who continue in service after 1 April 2022 will do so as members of AFPS15 and all legacy schemes will close on 31 March 2022.
The Government’s decision to pursue the Deferred Choice Underpin (DCU) option to address the age discrimination ruling will allow individuals to make an informed decision based on known and actual pension benefits. Unfortunately, neither we nor Veterans UK are yet in a position to be able to provide "McCloud choice comparative figures”.
Due to the complexities of the remedy HMT and Public Sector schemes are still working through outstanding policy and working to amend scheme legislation. Public Sector Pension Schemes have to implement the DCU by October 2023.
Eligible members who have already left the Armed Forces with a pension in payment (following normal or medical retirement) and, eligible dependants with a pension in payment in cases where a person has very sadly died, will be contacted after the implementation date and will be provided with details of their election choice. If you retire from the military prior to being able to make your election for the remedy period (whilst the system works to catch-up) you will be contacted by Veterans UK after leaving the Services and asked to make your decision. Your pension will then 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. Early Departure Payments and Immediate Pensions) will be invited to make their election. 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
In the meantime, to implement the prospective remedy for McCloud (i.e. to move everyone to AFPS15 from April 2022) the MOD is undertaking a public consultation which details the changes that will be made to the Armed Forces Pension Scheme (AFPS) regulations and the effect on members. This consultation begins on 22 November 2021 and ends on 31 January 2022.
We have made a presentation to the MOD Armed Forces Pension Board setting out three key criteria against which we will judge the success of the implementation of the remedy.
- everyone affected by the remedy will be given sufficient time and information for them to make a fully informed decision;
- for serving personnel, timely and appropriate enhancements to the AFPS pension calculator will be made to help individuals forecast their likely benefits;
- those affected by the remedy who have so called ‘complicating factors’ including Pension Sharing Orders, Medical Discharge, Abatement, Death in Service or in Retirement, AVCs/Added Pension and Pension Taxation (Annual Allowance, Lifetime Allowance) should be able to access further information and guidance from the pension administrator, Veterans’ UK
This initiative is in line with the Society’s practice of holding governments to account on behalf of our Members and the wider Armed Forces Community.
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