New Clause 2 - Re-employment of armed forces pension recipients
Armed Forces
10:45 am
Mr Bill O'Brien (Normanton, Labour)
With this it will be convenient to discuss the following: New clause 9—Early departure payments—
'A system of Early Departure Payments (EDPs) for those serving 18 years and having reached age 40 (whichever is later) will be payable until the preserved pension comes into payment at age 65.The Secretary of State shall by order set out details of these payments.'.
New clause 26—Early departure payments (No.2)—
'Any Early Departure Payments (EDPs) established under section 1 of this Act as part of the Armed Forces Pension Scheme shall include the following provisions—
(a) there will be a qualifying period of service for the EDP, common for Officers and Other Ranks.
(b) the EDPs will be payable from age 40, but only on completion of 18 years of service (the 40/18 point);
(c) it will be paid to those leaving from that point and, as now, personnel will be eligible whether they leave for Service or personal reasons;
(d) from the 40/18 point, there will be immediate entitlement to a tax-free lump sum equivalent to three times the individual's accrued annual preserved pension value;
(e) in addition, at the 40/18 point, there will be an entitlement to an annual payment of 50% of the individual's accrued preserved pension entitlement. This payment will remain at the same level for those leaving at that point and, between the ages of 40 and 55, will not attract index-linking for inflation;
(f) for each year by which the individual's retirement is deferred after completing the 18 years of qualifying service, the value of the annual payments will increase by 1.66% up to age 55, at which age the annual payment will be 100% of the preserved pension entitlement. Until age 55, this payment will remain unchanged and will not attract index-linking for inflation;
(g) from age 55, the payments will be adjusted to take account of the changes in the Retail Price Index (RPI) since the point at which the EDP was originally taken and thereafter on an annual basis until the preserved pension comes into payment at age 60.
(h) existing policy on abatement will apply to Early Departure Payments if a recipient is subsequently reemployed in the public services.
(i) a preserved pension will be paid from age 60 onwards, with its value adjusted fully in line with RPI from the last day of service. At this point, a pension lump sum of three times the individual's preserved pension entitlement will also be paid.'.