Early Departure Point (EDP) Clarification

Discussion in 'Army Pay, Claims & JPA' started by Happy_Sapper, Oct 3, 2010.

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  1. I re-enlisted after originally serving 12 years & am due to hit my 17 year point (and already turned 40) next year. I transferred my original 12 years service onto AFPS 05 on re-enlistment & have written confirmation of this.

    However JPA still shows me as having 2 separate "pension pots" my original 12 years on AFPS 75 & my current service on AFPS 05. I wrote to Pensions Dept at Glasgow & have been told that the "combining" of the "2 pots" will not happen until I terminate my service again?? This seems strange to me, however they have sent me a letter that states this in black & white & to retain the letter for my own "peace of mind".

    I received my resettlement grant of £7K(ish) when I left at my 12 year point.

    My questions are:

    1. Does anyone have clarification on how the EDP thing works if I was to sign off next year at my 17 year point.

    2. Does the £7k(ish) resettlement grant I got paid out at 12 year point get deducted from my EDP payout?

    Thanks in advance.
  2. vauxhall

    vauxhall Sponsor

    On your first point, if you aggregated your earlier service with your new service it should all count for EDP. That means that you must, in total, have 18 years reckonable service and be at least age 40. You talk about leaving at the 17 year point - if you do you will miss out on EDP as you need 18 years, irrespective of the fact that you are 40.

    I understand that JPA has not caught up with your aggregation. Contact SPVA and get the reassurance you need. If you don't get it join the Forces Pension Society and we will help you.

    On your second point, your earlier resettlement grant does not get clawed back from your EDP. If you had returned within 121 days of receiving it you would have had to repay on re-entry.

    I hope this helps.
  3. Thanks for the swift reply & just to clarify, when I said hit my 17 year point next year, I meant my intention was to then sign off at that point & so would have the full 18 years service on discharge (or do I have to wait until my 18 year point to terminate?).

    I am led to believe that under the EDP I will then get an immediate "pay out & monthly pension" same as if I had completed my full 22 years (but obviously at a reduced percentage of full service), am I correct in my interpretation of the EDP?

    Thanks again in advance.
  4. vauxhall

    vauxhall Sponsor

    Sorry for my misunderstanding. I didn't realise that you were giving a year's notice at the 17 yr point. Just to clarify, as long as you have 18 yrs paid service and are at least 40 you are entitled to EDP. Only MODOs aren't eligible.

    The EDP lump sum is normally the same as your preserved lump sum. It is tax-free and paid within 30 days of your discharge. In your case (having served 18 yrs) the EDP income will be 50% of your preserved pension until you are 55 and 75%+CPI until you are 65, when your preserved benefits become payable.
  5. Thanks once again vauxhall, you have been most helpful.

    One last thing, I am of the understanding I will get another tax free lump sum at 65? Are all of the payments done automatically, or will there be a requirement to apply for them at 65?

  6. vauxhall

    vauxhall Sponsor

    Yes. When you draw your preserved pension there is a lump sum with it. Preserved pension age is 65 but you can draw it early, with actuarial reduction, as early as age 55. You can receive pension and the EDP income stream at the same time but you need to consider that your pension is reduced and, from age 65 when the EDP income stream stops, that could put you in financial difficulty.

    Have you booked to do a Financial Aspects of Retirement course? All this will be covered then. The Forces Pension Society deliver this course on behalf of the MOD. Contact your Resettlement Centre for further information.
  7. Most helpful Vauxhall, I am not 100% committed to terminating next year (have a few irons in the fire so to speak), but this information will be most helpful in making a decision when I am ready.

    The Financial Aspects of Retirement course is not something I was aware of, so thank you for bringing it to my attention.