Change of rules to the AFPS 05 and AFPS 15 schemes
Back in 2017 we told you the story of Charlotte Hughes, a young widow whose husband had died. MOD honoured an old nomination form, paying the death-in-service lump sum of over £120K to his mate rather than his wife, even though there was strong evidence to show that that had not been his intention.
In this short article Mary Petley of the Forces Pension Society explains what happened next and looks at the rules as they stand now.
Charlotte’s plight was taken up by the Society and we helped her make her case to the Pensions Ombudsman. Unfortunately, the Pensions Ombudsman found that the MOD had behaved correctly as the wording of the rules meant that MOD had not got the discretion to ignore Sergeant Hughes’ original nomination form. However, recognising the unfairness of Charlotte’s position, MOD have changed the AFPS 05 and AFPS 15 scheme rules to avoid the same thing happening to another widow or widower in the future.
AFPS 75 did not need to be changed as it specifies exactly who is eligible to receive any death-in-service lump sum or pension lump sum in the event of the member’s death – so there is no ability to nominate.
Both AFPS 05 and AFPS 15 allow the member to nominate one or more people or organisations as recipients. Nominations must be made on an AFPS Form 2 and, if more than one person or organisation is nominated, it must be specified how the sum is to be divided. Veterans UK will comply with the wishes expressed in the nomination from unless one of the following applies, in which case the original nomination will lapse:
• The nominee dies before the member;
• The nominee is the member’s spouse or civil partner and the relationship is legally dissolved. The member may re-nominate the ‘ex’ after the decree absolute, should they so wish;
• The member married or entered into a civil partnership from 1 December 2018 – and this is Charlotte’s Rule. If your marriage pre-dates the change, it worth checking that any existing nomination reflect the family’s current needs.
• The nominee is convicted of the murder or manslaughter of the member (and potentially any other offences relating to the nominee killing or wounding of a member, depending on circumstances).
Nominations are intended to make the member’s wishes clear and, where one exists, a nomination means that Veterans UK can arrange swift payment to the nominee(s). Completion of an AFPS Form 2 is particularly useful in the case of unmarried partners, where Veterans UK will be looking for evidence of financial dependence or interdependence in order for the partner to qualify for a pension. A nomination provides some evidence of the member’s intention to provide for his or her partner’s financial wellbeing and, as such, can help Veterans UK reach a speedy conclusion. If there is no nomination, the lump sum will eventually go to the spouse or civil partner, or unmarried partner or, failing that, to the estate. Speed of payment is the obvious advantage but there is a danger that an old neglected nomination could result in the payment going speedily to the wrong person!
Once a member becomes a veteran, there may still be pension lump sums due in the event of their death. For example, AFPS 05 awards a pension and pension lump sum (worth three times the pension). If he or she leaves at age 55 or over, the lump sum is paid to the member but, if he or she leaves before that age with a preserved pension, and dies before drawing it, the pension lump sum is payable to the nominee(s). AFPS 15 awards a pension (but no automatic lump sum) to those who serve until age 60. If they leave before age 60 the pension is deferred and, if the member dies before claiming it, a lump sum of three times the pension is paid to the nominee(s).
AFPS Form 2 is available on the internet. It is simple to complete and there is nothing to prevent the scheme member from replacing an old nomination form with a new one at any time.
In principle it is good that AFPS 05 and AFPS 15 members have a vehicle for making their wishes known regarding who will receive what can be significant sums of money. The message from this article is that, no matter how much of a good idea it is to express any wishes the member might have, if they do so, they must, must keep their nomination up to date.
If you are a Member of the Forces Pension Society and have questions on this or any other pension issue, contact us at [email protected] If you are not a Member but would like to know more about us, visit us at forcespensionsociety.org
See also: Pensions
This news story is included in the Spring edition of Envoy magazine – the free magazine for RAF personnel and your families too. You can sign up online to have your own copy sent to your home (quarterly).