Pension contributions for LEOs

I am puzzled as to the reasoning behind one of the Army's more arcane practices.


When I leave the Army I will receive an annual pension based on the following formula:

(nn/37) x 49% of qualifying salary. (nn= Number of qualifying years served)

Happy with that, not a bad deal.

If I enlist as a soldier the clock starts ticking at 18 years old, and 21st birthday for ruperts.


As a soldier who is to be commissioned at the age of 40, why do I now have to work for three years without increasing my accrued pension, but receive no compensation in my salary?


This is to make up for the three year difference between soldiers and officers.  What a load of rot. Anyone commissioned after their 21st birthday accrues pension rights from day one.  I am being commissioned after this time so why the difference?

It is not that I am being promoted, as it has been made exquisitely clear to me that I leave the army as a warrant officer one day, and join the army as an officer the next.  Not a promotion, a second career.

If the second career theory is to hold water, then why can I not draw my WO1 pension from the day I leave as a soldier, and start a second, officer's, pension from the first day of my new career.  That would be a few extra quid in the back pocket, I can tell you.


Is the MOD policy in this regard legal?

Are there tax implications for not making pension contributions for three years? (Something I heard about earnings that do not qualify for pension calculations not being taxable)

Who thought up this bloody stupid system in the first place?

Any answers gratefully received.

F_S, this is a top board.




War Hero
A WO1 on commission gets paid as much as a Maj +3 years (approx) I think you get plenty of compensation...As for a regular officer who joined straight from school workd for free for 3 years...
Shuddup Bowman, you dork! Don't let the system off the hook! The brother's got a point. They're being shafted. We all are! I think the salty old sweats deserve every penny they get, as we all do. It's only by identifying these gaps that proper representations can be made.


War Hero
Good quality argument Grown Ups...only what I would expect though...
Baggy has laid out a reasasonable argument, although only showing one side of the coin (late entry perspective, not showing any of the compensatory measures)..I have tried to add a further perspective showing some (although no expert in this area) of the benefits LE officers to get in order to compensate for this ommission (although I do know this is used as a pay incentive primarily, it does have a direct effect on pension) and have aded to the debate by saying their are a number of regular officers that serve from 19 for two years until 21 without getting any pension rights...

you on the other hand have added nothing to the debate except guff.....
Hi Baggy...

I have passed your question onto a tax expert for a formal answer on the legal point.  Depending on what he comes back with, I also have a pensions expert at my disposal who could perhaps look at the wider issues.  Please bear with me while the tax bod mulls this over and I will report back soon.


PS Many thanks for your kind compliment.  Finance is horribly dull but affects every one of us so I hope I can be of some help as a mere civvy!
OK - my tax expert says this does not ring true with him and suspects there may be some dud info flying around on this subject.

But the basis of all this is pensions rather than tax related and so I will see whether the pensions expert can help.   More soon.
With thanks to Stuart Hermelin at the Forces' Pension Society:

Ok, here goes...

Yes, it is an arcane practice and may be addressed in the 'new' Armed Forces Pension Scheme as and when it is finalised; we will be watching it with interest.

You lose three years pensionable service because that is part of the terms and conditions of becoming a commissioned officer. A better way to look at it though would be that you are moving from one pension scale to another. What matters ultimately is the pension rate that is against the length of service, and that is significantly more on the officer scale regardless of the three years. What it comes down to is that if you are convinced that your future lies in being commissioned, then that's all that matters.

I liked your comment on drawing your 22 year WO1 pension and commencing your officer pension from year one. I had to stop and think about that one. However, Inland Revenue rules prohibit the same employer from paying both a pension and a salary to an employee simultaneously. Good idea though, you must have been an RSM...?

Lastly, you asked if the MoD practice was illegal. Maybe if they forced you to accept the commission and with it the loss of three years pensionable service - but they didn't, it was entirely voluntary.

Thanks for looking into this for me.  It is obviously unfortunate that I cannot pocket a bit more cash, but that's the way it seems to be.

I am not slighted that you think I may have been an RSM, although in my corps that would normally be construed an insult, as they are the bottom of the evolutionary pile.

Thanks again for your efforts and I look forward to some more interesting reading.

For instance what do you think of New Star and their policy of cramming the office with poached fund managers?


Bad CO

I'd just like to add my thanks to F_S for all her hard work on this topic, and in fact this whole board.   For those who don't know F_S is not in the Army and only does this because she is a thoroughly good egg.

Oh yeah - I was commissioned just after my 19th birthday so am in the '2 lost years' trap.  As for those who believe that the new scheme will be better the only think I can think of is that song.....

'Dream, dream, dream'
Aw - thanks guys.  It's a pleasure.

Baggy.....  Not me who thought you might be an RSM but the chap at the Forces' Pension Soc who provided that answer (no names, no pack drill of course).   Being a divvy civvy, any cheek on his part was lost on me!  

As for New Star... they are very popular right now and you are right about the poaching but the whole industry is poaching fund managers all the time.  I am putting the finishing touches to a piece on the value of fund managers and whether investors should put faith in them/follow them.  Watch this space!

I take into consideration your comment that it is illegal for an employer to pay a salary and a pension, simultaneously, to the same person.

How does that cover the use of ROs by the services?  An RO, or retired officer, is someone who after a longish period in the military takes up a post in an admin job.  Sometimes these people only move one desk along from when they served, and are now being paid both  salary and pension.  

I accept that they are now on a different contract, and on different tems of employment, but the same is true of late entry officers.

Do you, dear F-S, have any idea why ROs are allowed to have both, when everbody else is forbidden?

kindest regards,

The plot thickens....

I sent your last question off to the Forces Pension Society again and this is the reply.....

"I didn't get the business about employers not being able to employ someone and at the same time pay them quite right, in fact I got it totally wrong! An employer may re-engage an employee who has retired and pay him or her a salary in addition to their pension.
However, that said, the total of the pension in issue and the salary paid cannot exceed the salary level in issue on the day of retirement. I think you'll agree that it makes no real difference to my original answer, but does serve to answer the question about ROs. They receive a 'salary' that when added to their pension equates to their salary when they were serving. I know my answer is a little clumsy, but I think you should get the gist.

Clear as mud?  Let me know if you want me to get back to him and apologies on his behalf for earlier confusion.

Sloppy Link

Dear F-S
  Interesting to say the least.   Two questions for your obviously well educated friends in all matters finance;

1.   I joined as an extremely youthful 16 year old, does this fall in to the same bracket as the 19 year old rupert?

2.   What about Non Regular Permanent Staff then?   They end up better off than when they were in as they get paid NRPS rates and draw their pension.

It strikes me that with a little digging all these little rules and regulations could be taken to the cleaners but as we are always fighting the various finance departments as an army of one, we will never win.   Who is supposed to look after us in this area?   It is pointless going to your Pay Office as they (not their fault) are as much in the dark as I am, the only answer is to resort to this top dog forum or shell out your own wonga and get your own financial wizard.

Hurumph over.
I realise that this is a long dormant thread, but i heard something today that made me stop and wonder.

We all know that ROs (Or M?Gs as they are now known) have their pay abated to take into account their pensions. Based I assume on the rules F_S quoted before. Also that LEs cannot have their current pay and their WO1's pension for the same reason, even though they are two separate engagements. Why then, if a soldier or officer leaves the service, and becomes a regular civil servant, do they get full civil service pay and full pension even if they are employed by the MOD?

Something smells a bit fishy here.

Any ideas?