Armed Forces Pension Scheme 05

Am I eligible?

If you enlisted or were commissioned in the Regular Armed Forces after 6 April 2005 or accepted an offer to transfer from AFPS 75, you would have joined the AFPS 05. This scheme closed to new members on 31 March 2015, when it was replaced by AFPS 15. 

Following legal challenges, in December 2018 the Court of Appeal found that transitional protection arrangements applied to the judicial and firefighters pension schemes gave rise to unlawful discrimination as transitional protection was only offered to older scheme members. In July 2019, the government confirmed that they would remove discrimination in those schemes by introducing a remedy period.

As part of the remedy, serving members in legacy pension schemes (AFPS 05, AFPS 75, previous Reserves pension schemes) who were previously offered transitional protection, moved to the AFPS 15 scheme on 1 April 22.  Any benefits built up in legacy schemes are protected, and members will receive benefits earned under legacy schemes at the same time as they originally expected to receive them.

When an Armed Forces pension becomes payable, if you are affected by the 2015 remedy, you will be offered the choice of which scheme benefits you wish to receive (the 75 scheme or the reformed 15 scheme), for the remedy period 1 April 2015 – 31 March 2022.

More information can be found on Defence Connect at Group: 2015 Remedy (McCloud). 

How is AFPS 05 calculated?

AFPS 05 is a final salary pension scheme. Your AFPS 05 pension started accruing from your first day of paid service.

You need to have at least 2 years of paid Service to qualify for most pension benefits.

The pension is 1/70th of the final pensionable earnings multiplied by the years and days of reckonable service. You’ll also get a lump sum, which is three times the value of your annual pension.

What will my final pension be?

Every year around your birthday you will receive a Benefits Information Statement. This will inform you of the value of your pension benefits. A free pension forecast can be requested once a year from Veterans UK. The application form can be accessed MODNet or the Veterans website. You can also use the online pension calculator to estimate your final pension.

For example, if your final pensionable earnings were £40,000 and you completed 12 years of reckonable service, then your annual pension would be £6,857 (40,000 divided by 70 multiplied by 12). The tax-free lump sum would be £20,571 (£6,857 x 3).

When will I receive my pension?

Under this scheme, you are only eligible to receive an immediate pension if you retire from the age of 55. If you leave the Service before the age of 55 you are entitled to a deferred pension from the age of 65. However, you can ask for your pension to be paid from age 55, but the amount of pension will be actuarily reduced because it is paid before age 65 and therefore will be in payment for longer. 

Am I eligible for an Early Departure Payment?

You may qualify for an Early Departure Payment (EDP) if, when you leave the Service, you have:

- been in Regular Service;

- ceased to be in Regular Service on or after the age of 40, and before the age of 55;

- completed at least 18 years of relevant service in the Armed Forces.

The EDP 05 consists of periodical payments and a tax-free lump sum. The periodical payments are calculated by reference to the your final relevant earnings and length of service: effectively, it is 50% of the deferred pension until age 55, when it increases to 75% of the deferred pension.

The EDP 05 payments begin the day after you leave the Service, and end with the day before your 65th birthday. An additional amount is also paid for each year served beyond the 18-year point. A lump sum is also paid, which is effectively three times the EDP basic amount.

Do I get a Resettlement Grant?

Regular Service people who are eligible to be members of AFPS 05 may qualify for a Resettlement Grant if you have served for at least 12 years on discharge, and are not also entitled to an EDP, an immediate pension or ill-health benefit under AFPS 05, or any other Resettlement Grant.

The Resettlement Grant is a fixed tax-free lump sum (currently £12,088). It is paid to help you adjust to civilian life.

If I die, what pension benefits do my dependants get?

In the event of your death, your eligible dependants - surviving spouse, civil partner, eligible partner or eligible children – will receive benefits. These may consist of a tax-free lump sum and a taxable pension.

Spouse, civil partner or eligible partner

If you die in service, your spouse, civil partner or eligible partner will receive a pension for life worth 62.5% of a pension calculated in the same way as a Tier 3 enhanced ill-health pension or, if greater, your actual pensionable service up to 37 years. The lump sum is 4 times your final pensionable earnings. For more information about a Tier 3 pension read the AFPS 05 Guide.

If you die after leaving service and before your pension has come into payment, your spouse or partner will receive a pension for life worth 62.5% of your deferred pension and the deferred pension lump you would have received. Again, the maximum pension for a dependent is capped at 37 years of reckonable service.

If you die after your pension has come into payment, your spouse or partner will receive a pension for life worth 62.5% of your pension. For example, if your final pensionable earnings were £40,000 and you completed 12 years of reckonable service, then their pension would be £4,285 (£40,000 divided by 70, multiplied by 12 years of reckonable service, multiplied by 62.5%).

Eligible children

An eligible child will receive a pension for so long as they remain a child. The amount payable is normally the balance of the pension remaining after payment to an adult dependent. Where there is no adult dependent, all children will share equally 100% of the pension (up to 33% per child).

How do I claim?