Armed Forces Pension Seminar Insights and Tips
Unveil the complexities of Armed Forces pensions with valuable insights on basic themes, pension credit, member views, and handling income vs. pension issues. Explore pension age differences, EDP features, McCloud post-remedy applications, and the role of actuaries in income evaluations.
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Presentation Transcript
Armed Forces Pension Seminar M a r k H o o d G o u g h s S o l i c i t o r s W e n d y B a n d e i r a F o r c e s P e n s i o n S o c i e t y D a v i d L o c k e t t A c t u a r i e s f o r L a w y e r s R i c h a r d H a l l P u m p C o u r t
Covering Basic Themes McCloud Pension Credit Member view Thorny Issues Top Tips
B A S I C S AFPS are NON-Contributory No pension pot exists CETV link to benefits paid is tenuous
B A S I C S AFPS are NON-Contributory No pension pot exists CETV link to benefits paid is tenuous Pension ages differ among schemes AFPS 75 Immediate 22yrs/16yrs; deferred 60/65 AFPS 05 Immediate 55; deferred 65 AFPS 15 Immediate 60; deferred SPA
B A S I C S AFPS are NON-Contributory No pension pot exists CETV link to benefits paid is tenuous Pension ages differ among schemes AFPS 75 immediate 22yrs/16yrs; deferred 60/65 AFPS 05 Immediate 55; deferred 65 AFPS 15 Immediate 60; deferred SPA EDP a feature of 05/15 ONLY. 05 18yrs service and 40yrs old; 15 20yrs service and 40yrs old
B A S I C S 2 EDP It is INCOME it is NOT PENSION How should it best be dealt with?
B A S I C S 2 EDP It is INCOME it is NOT PENSION How should it best be dealt with? McCloud (post 1 Oct 23) Best value CETV used for divorce. Retrospective application of remedy to those PCM affected. Pension Credit Members Automatically given the best option.
B A S I C S 2 EDP It is INCOME it is NOT PENSION How should it best be dealt with? McCloud (post 1 Oct 23) Best value CETV used for divorce. Retrospective application of remedy to those PCM affected. Pension Credit Members Automatically given the best option. PSO against in payment AFPS 75 Question of the actuary explicit income drop will be what? Overpayments and clawback
Thorny Issues Be Alive to these
T H O R N Y I S S U E S EDP Tricky Do they arise? How dealt with?
T H O R N Y I S S U E S EDP Tricky Do they arise? How dealt with? Sharing AFPS 75 Immediate income drop AFPS 05/15 No immediate income drop
T H O R N Y I S S U E S Double dipping Share the pension AND the lump sum AFPS 75
T H O R N Y I S S U E S Double dipping Share the pension AND the lump sum AFPS 75 Commutation Give up pension for more lump sum (AFPS 75) Pension is restored at age 55 Give up EDP lump sum (AFPS 15) for more EDP income (inverse commutation) Give up AFPS 15 Pension to create a lump sum. No restoration.
T H O R N Y I S S U E S Double dipping Share the pension AND the lump sum AFPS 75 Commutation Give up pension for more lump sum (AFPS 75) Pension is restored at age 55 Give up EDP lump sum (AFPS 15) for more EDP income (inverse commutation) Give up AFPS 15 Pension to create a lump sum. No restoration. Service past Immediate Pension Point; Causes CETVs to be inflated in value.
TOP TIPS Form P1 for each scheme to be shared Sharing percentages may be different in each scheme Show percentages to 2 decimal places 26.00% not 26% Internal transfer only KNOW the pension payment ages and DEFERRED pension ages KNOW if you have actual pension or EDP AND pension Caution Think ACTUARY with these pensions Use trusted Actuaries who truly understand the schemes Remember this if NOTHING else
FINAL POINT DO NOT (generally) deal with Armed Forces Pensions with reference to the CETV An agreed pension share of 50% each of the CETV is NOT equality of income. (But it could be a negligence claim if you agreed this!)
Mark Hood Associate Solicitor & Head of Armed Forces Sector 01225 781 925 markhood@goughs.co.uk www.goughs.co.uk
