Armed Forces: Redundancy

Defence written question – answered on 4th July 2012.

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Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

To ask the Secretary of State for Defence how many members of HM Armed Forces who have been issued with compulsory redundant notes for discharge are within one year of reaching the full qualifying date for an immediate Ministry of Defence pension.

Photo of Andrew Robathan Andrew Robathan The Parliamentary Under-Secretary of State for Defence

Because of the complexity of pensions calculations, the exact number of service personnel within one year of reaching the full qualifying date for an immediate pension could be determined only by a manual analysis of the records of those selected for redundancy, which could be provided only at disproportionate cost. However early analysis indicates approximately 80 (roughly 1.2%) of the 6,660 armed forces personnel selected for redundancy in tranches 1 and 2 are non-applicants who will now, following a reduction in the qualifying period, be within one year of qualifying for an immediate pension or equivalent on their redundancy exit date. Selection for redundancy was based on clearly defined criteria; proximity to pension point was not one of these.

The Armed Forces Redundancy schemes pay significantly larger tax free redundancy compensation lump sums to those who narrowly miss out on immediate incomes. Any pension rights that have been earned will also be preserved, meaning that an index linked pension and a further tax-free lump sum will become payable at age 60 or 65, depending on pension scheme.

Whereas the majority of other ranks normally have to serve for 22 years before receiving an immediate income, the Armed Forces Redundancy schemes reduce this requirement to 18 years. This is a concession of four years, which will enable many redundees to receive an immediate income for which they would otherwise not have qualified.

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