Haven't seen this today but if you get out after 2015 looks like it will apply to you. ISSUE 1. An update on Public Service Pension Reform and its impact on the Army. TARGET AUDIENCE 2. All Regular and Reserve Forces personnel. KEY POINTS Lord Huttons Independent Public Services Pension Commission final report was published on 10 Mar 11 and the key recommendations as they affect the Armed Forces were: o Final Salary pension schemes, like the AFPS, which award a pension based on length of service and final salary on retirement, should be replaced with a system that provides a pension based on a percentage of the salary earned in each year throughout an entire career. This is known as a Career Average Revalued Earnings (CARE) pension. o That the Normal Pension Age for the Armed Forces should be increased from 55 to 60. This does not mean that everyone will have to serve until age 60, in the same way that, at present, very few personnel serve to 55. o That members of existing pension schemes will be automatically moved to the new scheme. o Importantly, pension benefits earned up to the implementation date of a new scheme will be protected. For the years you have already served and until reforms are made, you will keep all the pension benefits you have already earned. These benefits will be worked out in the same way, you will be able to draw them at the same age as now, and they will be based on your final salary at the date you retire. The Government has accepted Lord Huttons recommendations on public service pension reform as the basis for consultation and is expected to respond by the Autumn with direction for the way ahead. Once this direction is received, detailed development and design of new pension schemes is expected to begin. The Government has confirmed that public service pensions will remain among the best available. The MOD is committed to ensuring that the future AFPS remains amongst the best of these schemes and has made its position clear - that a new pension scheme must be: acceptable to Service personnel; highly competitive in relation to other schemes in recognition of the Armed Forces unique commitment and sacrifice; retention positive in pulling personnel through to key career points and aligned with the development of the New Employment Model. The Governments intent is to introduce new pension schemes in around 2015 but it may take longer for the Armed Forces because of the complexity of our current schemes. Additionally, the Government has agreed, in principle, that because the Armed Forces do not have Trade Unions to represent their views, the Government will consult on proposals alongside, but separately, from the other public services. A Future Armed Forces Pension Team has been established within the MOD to take forward this work. It is recognised that the current pension schemes are not well understood and therefore the implications of a Future Pension Scheme may be unclear to many personnel. Therefore, DSPS(A) has developed a presentation on the current pension schemes which will be delivered by RAO staff at unit level in the near future. A further presentation is being developed on the Future Pension Scheme. BACKGROUND 3. Public service pensions are increasingly unaffordable as people are living longer. The Independent Public Service Pensions Commission, chaired by Lord Hutton, was set up to conduct a review of public service pensions, (including the Armed Forces Pensions Schemes - AFPS 75, AFPS 05 and the Reserve Forces Pension Scheme) and to make recommendations to the Government that are sustainable and affordable in the long term, fair to both the public service workforce and the taxpayer and consistent with the financial challenges ahead. 4. The Commissions final report was published on 10 Mar 11 and the process to reform public sector pensions has begun. DIB 18/11 was published on the same date and AG wrote to the Chain of Command on 14 Mar 11. 5. The Government has confirmed that pension benefits that have been earned up to the introduction of the new scheme will be protected. Because of the complexity of the Armed Forces pension schemes, the precise detail is to be clarified with HM Treasury. As soon as more is known then you will be informed accordingly. It should be noted that these changes will have absolutely no impact on pensions already in payment by the time a new pension scheme is introduced. 6. A MOD Future Armed Forces Pension Team has been established, which will consist of 3 serving officers (one from each Service) and 2 civil servants. This team will be responsible for the development of the new pension scheme and will work closely with the New Employment Model programme which is developing sustainable, competitive, effective, fair and appropriately targeted financial Conditions of Service for Armed Forces personnel. 7. A further update will be given in the Autumn once more detailed information is available on the way ahead.