This week we share the answer to a question about accrual of pension benefits if service is extended.
Question:
I joined the RN in 1989 and remained on AFPS 75 in April 2015. My current planned exit date means that I will have accrued 34.5 years’ service. I have been offered an extension of service until age 60; would I accrue further pension benefits under AFPS 15 or is total accrual capped at 34 years’ service?
Answer:
From 1 April 2022, everyone still in service is accruing benefits from AFPS 15, irrespective of whether they were able to remain on their legacy scheme (AFPS 75 or AFPS 05) in April 2015. The general principle with AFPS 15 is that the longer you serve, the better your benefits will be.
If you leave before age 60, any pension accrued from AFPS 15 is deferred until State Pension Age (SPA) but, if you serve until age 60, the AFPS 15 pension will be paid immediately on exit. If you do leave service before age 60, you will still benefit from Early Departure Payments (EDP) from AFPS 15 which comprise a tax free lump sum and a regular taxable monthly income. EDP income is a percentage of the accrued pension based on your length of service and will remain in payment until your SPA when it will stop and the deferred pension will start.
With AFPS 15 there is no limit on the amount of time you can accrue benefits, whereas this is capped at 34 years’ service for Officers on AFPS 75. The benefits you have accrued on your legacy scheme, AFPS 75, up until 31 March 2022 when you moved to AFPS 15, are secure and will also be paid to you on exit.
