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Understanding Your Pension Earnings

Pensions go some way to providing financial security and it is a good idea to keep an eye on pension savings as they grow.  One of the ways in which the Armed Forces Pension Scheme (AFPS) helps you with this is by issuing you with a Benefits Information Statement (BIS). 

Here we explain how the BIS works and what else is available to help you understand the value of your pension. 

All serving personnel should receive a fresh BIS annually, shortly after their birthday which, for those whose birthdays have occurred since 28 November 2023, can be accessed via JPA.

The BIS provides a concise statement of pension earnings up to the date of issue, offering the opportunity to identify and correct any errors found in the underpinning data used to produce the BIS (so, dates, rank etc). Non-receipt or data errors should be referred to Unit Admin staff.

The BIS is a snapshot of the pension/Early Departure Payment (EDP) benefits as if the member were leaving service on their birthday that year and the spouse/civil partner benefits which would become payable if they were to die in service at that point.  It separates the benefits so that it is clear which benefits result from which scheme, and when they are payable.  

It does NOT show benefits transferred in from other schemes, other deferred/preserved AFPS pensions, the value of any Added Years or Added Pension purchased, or the impact of divorce-related orders on the pension. 

Further, to keep the BIS simple, it does not mention the benefits payable for dependent children or unmarried partners.  To cover everything would make the document too complicated and discourage the owner from reading it!

Although welcome, the BIS does not provide the full picture and should not be used for financial planning.  So, what else is available? 

Well, there is the MOD on-line pension calculator (which now includes pension options under the 2015 remedy (McCloud) for those in scope) but its accuracy depends entirely on the data that is input and it, too, has some limitations.  For example, it will assume that the rank for pension is the rank that it has been told the member holds – which, of course, for AFPS 75 members may not be the same as ‘rank for pension’.  It is a useful tool but, remember, figures produced are for guidance purposes only.

Then there is the formal pension forecast.  This provides a forecast of benefits based on a given exit date using the actual data as held by DBS and the actual rules of the scheme(s) in which benefits have been accrued.  Everybody is entitled to one free formal pension forecast a year and it is obtained by submitting an AFPS Form 12 (while still serving) or an AFPS Form 14 (once discharged) to Veterans UK in Glasgow. Again, when you receive your forecast, check it!   

Watch the MoD’s AFPS15 Benefits Information Statement (BIS) video here

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